20-F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)

o	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
	OR
x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2014
	OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _________________ to _________________
	OR
o	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	Date of event requiring this shell company report _________________

Commission file number: 001-36231 

SCORPIO BULKERS INC.

(Exact name of Registrant as specified in its charter)

(Translation of Registrant’s name into English)

Republic of the Marshall Islands

(Jurisdiction of incorporation or organization)

9, Boulevard Charles III Monaco 98000

(Address of principal executive offices)

Mr. Emanuele Lauro

377-9798-5716

info@scorpiobulkers.com

9, Boulevard Charles III Monaco 98000

(Name, Telephone, E-mail and/or Facsimile, and address of Company Contact Person)

Securities registered or to be registered pursuant to section 12(b) of the Act.

Title of each class	Name of each exchange on which registered
Common stock, par value $0.01 per share	New York Stock Exchange
7.50% Senior Notes due 2019	New York Stock Exchange

Securities registered or to be registered pursuant to section 12(g) of the Act.

NONE

(Title of class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

NONE

(Title of class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

As of December 31, 2014, there were 180,299,695 outstanding shares of common stock, par value $0.01 per share.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes No x

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes No x

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 

Yes x No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See the definitions of “large accelerated filer” and “accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  x Accelerated filer  o Non-accelerated filer  o

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: 

x	U.S. GAAP
	International Financial Reporting Standards as issued by the international Accounting Standards Board
	Other

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:

 Item 17  Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes No x

TABLE OF CONTENTS

PART I			1
	ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	1
	ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	1
	ITEM 3.	KEY INFORMATION	1
	ITEM 4.	INFORMATION ON THE COMPANY	21
	ITEM 4A.	UNRESOLVED STAFF COMMENTS	53
	ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	53
	ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	68
	ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	72
	ITEM 8.	FINANCIAL INFORMATION	76
	ITEM 9.	OFFER AND THE LISTING	77
	ITEM 10.	ADDITIONAL INFORMATION	78
	ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	86
	ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	86
PART II			86
	ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	86
	ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	86
	ITEM 15.	CONTROLS AND PROCEDURES	86
	ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT	87
	ITEM 16B.	CODE OF ETHICS	87
	ITEM 16C.	PRINCIPAL ACCOUNTING FEES AND SERVICES	87
	ITEM 16D.	EXEMPTIONS FROM LISTING STANDARDS FOR AUDIT COMMITTEES	88
	ITEM 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	88
	ITEM 16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	88
	ITEM 16G.	CORPORATE GOVERNANCE	88
	ITEM 16H.	MINE SAFETY DISCLOSURE	89
PART III			89
	ITEM 17.	FINANCIAL STATEMENTS	89
	ITEM 18.	FINANCIAL STATEMENTS	89
	ITEM 19.	EXHIBITS	89

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Scorpio Bulkers Inc. desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection therewith. This document and any other written or oral statements made by the Company or on its behalf may include forward-looking statements, which reflect its current views with respect to future events and financial performance. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. This document includes assumptions, expectations, projections, intentions and beliefs about future events. These statements are intended as “forward-looking statements.” We caution that assumptions, expectations, projections, intentions and beliefs about future events may and often do vary from actual results and the differences can be material. When used in this document, the words “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “projects,” “likely,” “will,” “would,” “could” and similar expressions or phrases may identify forward-looking statements.

All statements in this document that are not statements of historical fact are forward-looking statements. Forward-looking statements include, but are not limited to, such matters as:

• our future operating or financial results;

• statements about planned, pending or recent acquisitions, business strategy and expected capital spending or operating expenses, including drydocking, surveys, upgrades and insurance costs;

• the strength of world economies;

• stability of Europe and the Euro;

• fluctuations in interest rates and foreign exchange rates;

• general drybulk shipping market conditions, including fluctuations in charter hire rates and vessel values;

• changes in demand in the drybulk shipping industry, including the market for our vessels;

• changes in our operating expenses, including bunker prices, dry docking and insurance costs;

• changes in governmental rules and regulations or actions taken by regulatory authorities;

• potential liability from pending or future litigation;

• general domestic and international political conditions;

• potential disruption of shipping routes due to accidents or political events;

• our ability to procure or have access to financing, our liquidity and the adequacy of cash flows for our operations;

• our continued borrowing availability under our debt agreements and compliance with the covenants contained therein;

• our ability to successfully employ our existing and newbuilding drybulk vessels;

• our ability to fund future capital expenditures and investments in the construction, acquisition and refurbishment of our vessels (including the amount and nature thereof and the timing of completion thereof, the delivery and commencement of operations dates, expected downtime and lost revenue);

• risks associated with vessel construction;

• potential exposure or loss from investment in derivative instruments;

• potential conflicts of interest involving members of our board and senior management;

• our expectations regarding the availability of vessel acquisitions and our ability to complete acquisition transactions planned;

• vessel breakdowns and instances of off-hire; and

• statements about drybulk shipping market trends, charter rates and factors affecting supply and demand.

We have based these statements on assumptions and analyses formed by applying our experience and perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate in the circumstances. All future written and verbal forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We undertake no obligation, and specifically decline any obligation, except as required by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this annual report might not occur.

See “Item 3. Key Information—D. Risk Factors” for a more complete discussion of these risks and uncertainties and for other risks and uncertainties. These factors and the other risk factors described in this annual report are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could harm our results. Consequently, there can be no assurance that actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

Unless otherwise indicated, references to “Scorpio Bulkers,” the “Company,” “we,” “our,” “us” or similar terms refer to the registrant, Scorpio Bulkers Inc., and its subsidiaries, except where the context otherwise requires. We use the term deadweight tons, or dwt, expressed in metric tons, each of which is equivalent to 1,000 kilograms, in describing the size of our vessels. Unless otherwise indicated, all references to “U.S. dollars,” “dollars,” “U.S. $” and “$” in this annual report are to the lawful currency of the United States of America.

As used in this annual report “Dacks” refers to Dalian COSCO KHI Ship Engineering Co. Ltd., “Daehan” refers to Daehan Shipbuilding Co., Ltd., “Daewoo” refers to Daewoo Mangalia Heavy Industries S.A.,“Chengxi” refers to Chengxi Shipyard Co., Ltd., “Hudong” refers to Hudong-Zhonghua Shipbuilding (Group) Co., Inc., “Imabari” refers to Imabari Shipbuilding Co. Ltd., “Mitsui” refers to Mitsui Engineering & Shipbuilding Co. Ltd., “Nacks” refers to Nantong COSCO KHI Ship Engineering Co., Ltd., “Tsuneishi” refers to Tsuneishi Group (Zhoushan) Shipbuilding Inc., “Waigaoqiao” refers to Shanghai Waigaoqiao Shipbuilding Co., Ltd., and “Yangzijiang” refers to Jiangsu Yangzijiang Shipbuilding Co. Ltd.

A. Selected Financial Data

The following table summarizes our selected consolidated financial and other operating data as of the dates and for the periods indicated. The selected consolidated financial data in the table as of and for the periods presented are derived from our audited consolidated financial statements and notes thereto for the year ended December 31, 2014 and the period from March 20, 2013 (date of inception) to December 31, 2013, included elsewhere in this annual report, which have been prepared in accordance with accounting principle generally accepted in the United States of America, or U.S. GAAP.

The following data should be read in conjunction with “Item 5. Operating and Financial Review and Prospects,” and the consolidated financial statements and related notes thereto, and other financial information included elsewhere in this annual report.

	For the year ended		For the period from March 20, 2013 (date of inception) to
	December 31, 2014		December 31, 2013
In thousands of U.S. dollars, except per share and share data
Consolidated Statement of Operations Data
Revenue:
Vessel revenue	$	3,774	$	—
Vessel revenue - related party pools	45,213		—
Total vessel revenue	48,987		—
Operating expenses:
Voyage expenses	3,579		—
Vessel operating costs	1,478		—
Vessel operating costs - related party	122		—
Charterhire expense	73,214		—
Vessel deprecation	686		—

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General and administrative expenses	30,937			5,505
General and administrative expenses-related party	972			—
Write down on assets held for sale	55,487			—
Total operating expenses	166,475			5,505
Operating loss	(117,488		)	(5,505		)
Other income (expense):
Interest income	1,052			341
Foreign exchange gain (loss)	43			(1,135		)
Financial expense, net	(172		)	(8		)
Total other loss	923			(802		)
Net loss	$	(116,565	)	$	(6,307	)
Weighted-average shares outstanding:
Basic	137,592,861			39,925,160
Diluted	137,592,861			39,925,160
Loss per common share:
Basic	$	(0.85	)	$	(0.16	)
Diluted	$	(0.85	)	$	(0.16	)
	As of December 31,
	2014			2013
Balance Sheet Data
Cash and cash equivalents	$	272,673		$	733,896
Assets held for sale	43,781			—
Vessels, net	66,633			—
Vessels under construction	866,844			371,692
Total assets	1,324,205			1,105,684
Current liabilities	20,342			1,472
Bank loans	30,250			—
Senior Notes	73,625			—
Total liabilities	124,217			1,472
Shareholders’ equity	1,199,988			1,104,212
	For the year ended			For the period from March 20, 2013 (date of inception) to
	December 31, 2014			December 31, 2013
Cash Flow Data
Net cash used in operating activities	$	(50,340	)	$	(2,237	)
Net cash used in investing activities	(682,782		)	(371,692		)
Net cash provided by financing activities	271,899			1,107,825

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	For the Year Ended December 31, 2014		For the period from March 20, 2013 (date of inception) to December 31, 2013
Time Charter Equivalent (TCE) Revenue (1):
Vessel revenue	$	48,987	$	—
Voyage expenses	3,579		—
Time charter equivalent (TCE) revenue	$	45,408	$	—
Time Charter Equivalent(TCE) Revenue attributable to:
Kamsarmax	$	35,265	$	—
Ultramax	10,143		—
	$	45,408	$	—
Revenue days (1):
Kamsarmax	4,527		—
Ultramax	1,180		—
Combined	5,707		—
Time Charter Equivalent Revenue (TCE) per revenue day (1):
Kamsarmax	$	7,790	$	—
Ultramax	$	8,599	$	—
Combined	$	7,957	$	—

(1) We define Time Charter Equivalent (TCE) revenue as voyage revenues less voyage expenses.  Such TCE revenue, divided by the number of our available days during the period, or revenue days, is TCE per revenue day, which we believe is consistent with industry standards.  TCE per revenue day is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charter hire rates for vessels on voyage charters are generally not expressed in per-day amounts while charter hire rates for vessels on time charters generally are expressed in such amounts.

We report TCE revenue, a non-GAAP measure, because (i) we believe it provides additional meaningful information in conjunction with voyage revenues and voyage expenses, the most directly comparable U.S.-GAAP measure, (ii) it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance, (iii) it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company’s performance irrespective of changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods, and (iv) we believe that it presents useful information to investors. For further information concerning our calculation of TCE revenue and our reconciliation of TCE revenue to voyage revenue, please see “Item 5. Operating and Financial Review and Prospects – A. Operating Results.”

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

The following risks relate principally to the industry in which we operate and our business in general. Other risks relate principally to the securities market and ownership of our common shares and our 7.50% Senior Notes due 2019, which we refer to as our Notes. The occurrence of any of the events described in this section could significantly and negatively affect our business, financial condition, operating results or cash available for the payment of dividends on our common shares and interest on our Notes, or the trading price of our securities.

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INDUSTRY SPECIFIC RISK FACTORS

Charter hire rates for drybulk vessels are volatile and have declined significantly since their historic highs and may remain at low levels or decrease in the future, which may adversely affect our earnings, revenue and profitability and our ability to comply with our loan covenants.

The drybulk shipping industry is cyclical with high volatility in charter hire rates and profitability. The degree of charter hire rate volatility among different types of drybulk vessels has varied widely; however, the continued downturn in the drybulk charter market has severely affected the entire drybulk shipping industry and charter hire rates for drybulk vessels have declined significantly from historically high levels. In the past, time charter and spot market charter rates for drybulk carriers have declined below operating costs of vessels. The Baltic Dry Index, or the BDI, a daily average of charter rates for key drybulk routes published by the Baltic Exchange Limited, which has long been viewed as the main benchmark to monitor the movements of the drybulk vessel charter market and the performance of the entire drybulk shipping market, declined 94% in 2008 from a peak of 11,793 in May 2008 to a low of 663 in December 2008 and has remained volatile since then. While the BDI has since increased from these low levels, it has fluctuated in a range between 698 and 2,337 from December 2012 through and including December 2014, due to recent downward volatility. The BDI has ranged from 509 to 771 during January and February 2015, and the drybulk market remains volatile.

Fluctuations in charter rates result from changes in the supply of and demand for vessel capacity and changes in the supply of and demand for the major commodities carried by water internationally. Because the factors affecting the supply of and demand for vessels are outside of our control and are unpredictable, the nature, timing, direction and degree of changes in industry conditions are also unpredictable. Since we intend to charter all our vessels principally in the spot market we will be exposed to the cyclicality and volatility of the spot market. Spot market charterhire rates may fluctuate significantly based upon available charters and the supply of and demand for seaborne shipping capacity, and we may be unable to keep our vessels fully employed in these short-term markets. Alternatively, charter rates available in the spot market may be insufficient to enable our vessels to operate profitably. A significant decrease in charter rates would also affect asset values and adversely affect our profitability, cash flows and our ability to pay dividends, if any. A significant decrease in charter rates would affect asset values and adversely affect our profitability, cash flows and ability to pay dividends, if any, in the future, on our common shares, and interest on our Notes.

Factors that influence demand for drybulk vessel capacity include:

• supply of and demand for energy resources, commodities and industrial products;

• changes in the exploration or production of energy resources, commodities, consumer and industrial products;

• the location of regional and global exploration, production and manufacturing facilities;

• the location of consuming regions for energy resources, commodities, consumer and industrial products;

• the globalization of production and manufacturing;

• global and regional economic and political conditions, including armed conflicts and terrorist activities; embargoes and strikes;

• natural disasters;

• disruptions and developments in international trade;

• changes in seaborne and other transportation patterns, including the distance cargo is transported by sea;

• environmental and other regulatory developments;

• currency exchange rates; and

• weather.

Factors that influence the supply of drybulk vessel capacity include:

• the number of newbuilding orders and deliveries, including slippage in deliveries;

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• the number of shipyards and ability of shipyards to deliver vessels

• port and canal congestion;

• the scrapping rate of older vessels;

• speed of vessel operation;

• vessel casualties; and

• the number of vessels that are out of service, namely those that are laid-up, drydocked, awaiting repairs or otherwise not available for hire.

In addition to the prevailing and anticipated freight rates, factors that affect the rate of newbuilding, scrapping and laying-up include newbuilding prices, secondhand vessel values in relation to scrap prices, costs of bunkers and other operating costs, costs associated with classification society surveys, normal maintenance and insurance coverage costs, the efficiency and age profile of the existing drybulk fleet in the market and government and industry regulation of maritime transportation practices, particularly environmental protection laws and regulations. These factors influencing the supply of and demand for shipping capacity are outside of our control, and we may not be able to correctly assess the nature, timing and degree of changes in industry conditions.

We anticipate that the future demand for our drybulk vessels will be dependent upon economic growth in the world’s economies, including China and India, seasonal and regional changes in demand, changes in the capacity of the global drybulk fleet and the sources and supply of drybulk cargo to be transported by sea. Given the number of new drybulk carriers currently on order with the shipyards, the capacity of the global drybulk carrier fleet seems likely to increase and there can be no assurance as to the timing or extent of future economic growth. Adverse economic, political, social or other developments could have a material adverse effect on our business and operating results.

Global economic conditions may continue to negatively impact the drybulk shipping industry.

In the current global economy, operating businesses have recently faced tightening credit, weakening demand for goods and services, weak international liquidity conditions, and declining markets. Lower demand for drybulk cargoes as well as diminished trade credit available for the delivery of such cargoes have led to decreased demand for drybulk carriers, creating downward pressure on charter rates and vessel values. The relatively weak global economic conditions have and may continue to have a number of adverse consequences for drybulk and other shipping sectors, including, among other things:

• low charter rates, particularly for vessels employed on short-term time charters or in the spot market;

• decreases in the market value of drybulk vessels and limited second-hand market for the sale of vessels;

• limited financing for vessels;

• widespread loan covenant defaults; and

• declaration of bankruptcy by certain vessel operators, vessel owners, shipyards and charterers.

The occurrence of one or more of these events could have a material adverse effect on our business, results of operations, cash flows and financial condition.

The current state of global financial markets and current economic conditions may adversely impact our ability to obtain financing or refinance our future credit facilities on acceptable terms, which may hinder or prevent us from operating or expanding our business.

Global financial markets and economic conditions have been, and continue to be, volatile. These issues, along with significant write-offs in the financial services sector, the re-pricing of credit risk and the current weak economic conditions, have made, and will likely continue to make, it difficult to obtain additional financing. The current state of global financial markets and current economic conditions might adversely impact our ability to issue additional equity at prices which will not be dilutive to our existing shareholders or preclude us from issuing equity at all.

Also, as a result of concerns about the stability of financial markets generally and the solvency of counterparties specifically, the cost of obtaining money from the credit markets has increased as many lenders have increased interest rates,

5

enacted tighter lending standards, refused to refinance existing debt at all or on terms similar to current debt and reduced, and in some cases ceased, to provide funding to borrowers. Due to these factors, we cannot be certain that financing will be available to the extent required, or that we will be able to refinance our future credit facilities, on acceptable terms or at all. If financing or refinancing is not available when needed, or is available only on unfavorable terms, we may be unable to meet our obligations as they come due or we may be unable to enhance our existing business, complete the acquisition of our newbuildings and additional vessel acquisitions or otherwise take advantage of business opportunities as they arise.

If economic conditions throughout the world do not improve, it may negatively affect our results of operations, financial condition and cash flows, and may adversely affect the market price of our common shares.

Negative trends in the global economy that emerged in 2008 continue to adversely affect global economic conditions. In addition, the world economy is currently facing a number of new challenges, recent turmoil and hostilities in various regions, including Russia, Syria, Iraq, North Korea, North Africa and Ukraine. The weakness in the global economy has caused, and may continue to cause, a decrease in worldwide demand for certain goods, and, thus, shipping. Continuing economic instability could have a material adverse effect on our ability to implement our business strategy.

The United States, the European Union and other parts of the world have recently been or are currently in a recession and continue to exhibit weak economic trends. The credit markets in the United States and Europe have experienced significant contraction, deleveraging and reduced liquidity, and the U.S. federal and state governments and European authorities have implemented and are considering a broad variety of governmental action and/or new regulation of the financial markets and may implement additional regulations in the future. Securities and futures markets and the credit markets are subject to comprehensive statutes, regulations and other requirements. The SEC, other regulators, self-regulatory organizations and exchanges are authorized to take extraordinary actions in the event of market emergencies, and may effect changes in law or interpretations of existing laws. Global financial markets and economic conditions have been, and continue to be volatile. Credit markets and the debt and equity capital markets have been distressed and the uncertainty surrounding the future of the global credit markets has resulted in reduced access to credit worldwide.

We face risks attendant to changes in economic environments, changes in interest rates, and instability in the banking and securities markets around the world, among other factors. Major market disruptions and the current adverse changes in market conditions and regulatory climate in the United States and worldwide may adversely affect our business or impair our ability to borrow amounts under credit facilities or any future financial arrangements. The recent and developing economic and governmental factors, together with possible further declines in charter rates and vessel values, may have a material adverse effect on our results of operations, financial condition or cash flows, or the trading price of our common shares.

Continued economic slowdown in the Asia Pacific region, particularly in China, may exacerbate the effect on us, as we anticipate a significant number of the port calls made by our vessels will continue to involve the loading or discharging of drybulk commodities in ports in the Asia Pacific region. Before the global economic financial crisis that began in 2008, China had one of the world’s fastest growing economies in terms of GDP, which had a significant impact on shipping demand. The growth rate of China’s GDP is estimated to have decreased to approximately 7.4% for the year ended December 31, 2014, which is China’s lowest growth rate for the past five years, and continues to remain below pre-2008 levels. China has recently imposed measures to restrain lending, which may further contribute to a slowdown in its economic growth. It is possible that China and other countries in the Asia Pacific region will continue to experience slowed or even negative economic growth in the near future. Moreover, the current economic slowdown in the economies of the United States, the European Union and other Asian countries may further adversely affect economic growth in China and elsewhere. Our business, financial condition and results of operations, ability to pay dividends, if any, as well as our future prospects, will likely be materially and adversely affected by a further economic downturn in any of these countries.

The fair market values of our vessels have declined and may decline further, which could limit the amount of funds that we can borrow, cause us to breach certain financial covenants in our credit facilities, or result in an impairment charge, and we may incur a loss if we sell vessels following a decline in their market value.

The fair market values of drybulk vessels, including our vessels. have generally experienced high volatility and have recently declined significantly. The fair market value of our vessels may continue to fluctuate depending on a number of factors, including:

• prevailing level of charter rates;

• general economic and market conditions affecting the shipping industry;

• types, sizes and ages of vessels;

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• supply of and demand for vessels;

• other modes of transportation;

• cost of newbuildings;

• governmental or other regulations;

• the need to upgrade vessels as a result of charterer requirements, technological advances in vessel design or equipment or otherwise;

• technological advances; and

• competition from other shipping companies and other modes of transportation.

If the fair market values of our vessels decline, or decline further, the amount of funds we may draw down under our secured credit facilities may be limited and we may not be in compliance with certain covenants contained in our secured credit facilities, which may result in an event of default. In such circumstances, we may not be able to refinance our debt or obtain additional financing. If we are not able to comply with the covenants in our secured credit facilities, and are unable to remedy the relevant breach, our lenders could accelerate our debt and foreclose on our fleet. In addition, if we sell one or more of our vessels at a time when vessel prices have fallen and before we have recorded an impairment adjustment to our consolidated financial statements, the sale may be less than the vessel’s carrying value on our consolidated financial statements, resulting in a loss and a reduction in earnings. Furthermore, if the market value of our vessels decline, or decline further, we may have to record an impairment charge in our consolidated financial statements which could adversely affect our financial results.

Conversely, if vessel values are elevated at a time when we wish to acquire additional vessels, the cost of such acquisitions may increase and this could adversely affect our business, results of operations, cash flow and financial condition.

Compliance with safety and other vessel requirements imposed by classification societies may be very costly and may adversely affect our business.

The hull and machinery of every commercial vessel must be classed by a classification society authorized by its country of registry. The classification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and the Safety of Life at Sea Convention.

A vessel must undergo annual surveys, intermediate surveys and special surveys. In lieu of a special survey, a vessel’s machinery may be on a continuous survey cycle under which the machinery would be surveyed periodically over a five-year period. Every vessel is also required to be drydocked every two and a half to five years for inspection of its underwater parts.

Compliance with the above requirements following the delivery of vessels may result in significant expense. If any vessel does not maintain its class or fails any annual, intermediate or special survey, the vessel will be unable to trade between ports and will be unemployable and uninsurable, which could negatively impact our results of operations and financial condition.

We are subject to complex laws and regulations, including environmental regulations that can adversely affect the cost, manner or feasibility of doing business.

Our operations are subject to numerous international, national, state and local laws, regulations, treaties and conventions in force in international waters and the jurisdictions in which our vessels operate or are registered, which can significantly affect the ownership and operation of our vessels. These laws and regulations include, but are not limited to, the U.S. Oil Pollution Act of 1990, or OPA, the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, the U.S. Clean Air Act, the U.S. Clean Water Act, or the CWA, and the U.S. Maritime Transportation Security Act of 2002, or the MTSA, and regulations of the International Maritime Organization, or IMO, including the International Convention for the Prevention of Pollution from Ships of 1973 (as from time to time amended and generally referred to as MARPOL), the International Convention for the Safety of Life at Sea of 1974 (as from time to time amended and generally referred to as SOLAS), the International Convention on Civil Liability for Bunker Oil Pollution Damage, and the International Convention on Load Lines of 1966 (as from time to time amended), or the LL Convention.

Compliance with such laws, regulations and standards, where applicable, may require installation of costly equipment or implementation of operational changes and may affect the resale value or useful lives of our vessels. These costs could have a material adverse effect on our business, results of operations, cash flows and financial condition. A failure to comply with applicable laws and regulations may result in administrative and civil penalties, criminal sanctions or the suspension or termination of our

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operations. Because such conventions, laws, and regulations are often revised, we cannot predict the ultimate cost of complying with them or the impact thereof on the resale prices or useful lives of our vessels. Additional conventions, laws and regulations may be adopted which could limit our ability to do business or increase the cost of our doing business and which may materially adversely affect our operations. For example, the International Convention for the Control and Management of Ships’ Ballast Water and Sediments, or the BWM Convention, adopted by the UN International Maritime Organization in February 2004, calls for the phased introduction of mandatory reducing living organism limits in ballast water over time. In order to comply with these living organism limits, vessel owners may have to install expensive ballast water treatment systems or make port facility disposal arrangements and modify existing vessels to accommodate those systems. Adoption of the BWM Convention standards could have an adverse material impact on our business, financial condition and results of operations depending on the available ballast water treatment systems and the extent to which existing vessels must be modified to accommodate such systems.

Environmental laws often impose strict liability for remediation of spills and releases of oil and hazardous substances, which could subject us to liability without regard to whether we were negligent or at fault. Under OPA, for example, owners, operators and bareboat charterers are jointly and severally strictly liable for the discharge of oil within the 200-mile exclusive economic zone around the United States. Furthermore, the 2010 explosion of theDeepwater Horizon well and the subsequent release of oil into the Gulf of Mexico, or other similar events, may result in further regulation of the shipping industry, and modifications to statutory liability schemes, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. An oil spill could result in significant liability, including fines, penalties and criminal liability and remediation costs for natural resource damages under other federal, state and local laws, as well as third-party damages.

We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses, and certificates with respect to our operations, and satisfy insurance and financial responsibility requirements for potential oil (including marine fuel) spills and other pollution incidents. Although we have insurance to cover certain environmental risks, there can be no assurance that such insurance will be sufficient to cover all such risks or that any claims will not have a material adverse effect on our business, results of operations, cash flows and financial condition and our ability to pay dividends, if any, in the future, on our common shares, and interest on our Notes.

An over-supply of drybulk carrier capacity may prolong or further depress the current low charter rates, which may limit our ability to operate our drybulk carriers profitably.

The supply of drybulk vessels has increased significantly since the beginning of 2006. As of mid-March 2015, newbuilding orders have been placed for approximately 19% of the existing fleet capacity. Vessel supply growth has been outpacing vessel demand growth over the past few years causing downward pressure on charter rates. Until the new supply is fully absorbed by the market, charter rates may continue to be under pressure due to vessel supply in the near to medium term

World events could affect our results of operations and financial condition.

Past terrorist attacks, as well as the threat of future terrorist attacks around the world, continue to cause uncertainty in the world’s financial markets and may affect our business, operating results and financial condition. Continuing conflicts and recent developments in Russia, Ukraine, the Korean Peninsula, the Middle East, including Egypt and North Africa, and the presence of U.S. or other armed forces in the Middle East, may lead to additional acts of terrorism and armed conflict around the world, which may contribute to further economic instability in the global financial markets. These uncertainties could also adversely affect our ability to obtain additional financing on terms acceptable to us or at all. In the past, political conflicts have also resulted in attacks on vessels, mining of waterways and other efforts to disrupt international shipping, particularly in the Arabian Gulf region. Acts of terrorism and piracy have also affected vessels trading in regions such as the South China Sea and the Gulf of Aden off the coast of Somalia. Any of these occurrences could have a material adverse impact on our operating results, revenues and costs.

Acts of piracy on ocean-going vessels have had and may continue to have an adverse effect on our business.

Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as the South China Sea, the Indian Ocean and in the Gulf of Aden off the coast of Somalia. Although the frequency of sea piracy worldwide decreased during 2014 to its lowest level since 2010, sea piracy incidents continue to occur, particularly in the Gulf of Aden off the coast of Somalia, in the Gulf of Guinea and the West Coast of Africa, with drybulk vessels particularly vulnerable to such attacks. If these piracy attacks result in regions in which our vessels are deployed being characterized as “war risk” zones by insurers, as the Gulf of Aden temporarily was in May 2008, or Joint War Committee “war and strikes” listed areas, premiums payable for such coverage could increase significantly and such insurance coverage may be more difficult to obtain. In addition, crew costs, including due to employing onboard security guards, could increase in such circumstances. Furthermore, while we believe the charterer remains liable for charter payments when a vessel is seized by pirates, the charterer may dispute this and withhold charter hire until the vessel is released. A charterer may also claim that a vessel seized by pirates was not “on-hire” for a certain number of days and

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is therefore entitled to cancel the charter party, a claim that we would dispute. We may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on us. In addition, any detention hijacking as a result of an act of piracy against our vessels, or an increase in cost, or unavailability, of insurance for our vessels, could have a material adverse impact on our business, financial condition and results of operations.

Our vessels may call on ports located in countries that are subject to restrictions imposed by the U.S. or other governments, that could adversely affect our reputation and the market for our common shares.

Although we do not expect our vessels will call on ports located in countries subject to sanctions and embargoes imposed by the U.S. government and other authorities or countries identified by the U.S. government or other authorities as state sponsors of terrorism, such as Cuba, Iran, Sudan and Syria, from time to time on charterers’ instructions, our vessels may call on ports located in such countries in the future. The U.S. sanctions and embargo laws and regulations vary in their application, as they do not all apply to the same covered persons or proscribe the same activities, and such sanctions and embargo laws and regulations may be amended or strengthened over time. In 2010, the U.S. enacted the Comprehensive Iran Sanctions Accountability and Divestment Act, or CISADA, which amended the Iran Sanctions Act. Among other things, CISADA introduced limits on the ability of companies and persons to do business or trade with Iran when such activities relate to the investment, supply or export of refined petroleum or petroleum products. In 2012, President Obama signed Executive Order 13608 which prohibits foreign persons from violating or attempting to violate, or causing a violation of any sanctions in effect against Iran or facilitating any deceptive transactions for or on behalf of any person subject to U.S. sanctions. Any persons found to be in violation of Executive Order 13608 will be deemed a foreign sanctions evader and will be banned from all contacts with the United States, including conducting business in U.S. dollars. Also in 2012, President Obama signed into law the Iran Threat Reduction and Syria Human Rights Act of 2012, or the Iran Threat Reduction Act, which created new sanctions and strengthened existing sanctions. Among other things, the Iran Threat Reduction Act intensifies existing sanctions regarding the provision of goods, services, infrastructure or technology to Iran’s petroleum or petrochemical sector. The Iran Threat Reduction Act also includes a provision requiring the President of the United States to impose five or more sanctions from Section 6(a) of the Iran Sanctions Act, as amended, on a person the President determines is a controlling beneficial owner of, or otherwise owns, operates, or controls or insures a vessel that was used to transport crude oil from Iran to another country and (1) if the person is a controlling beneficial owner of the vessel, the person had actual knowledge the vessel was so used or (2) if the person otherwise owns, operates, or controls, or insures the vessel, the person knew or should have known the vessel was so used. Such a person could be subject to a variety of sanctions, including exclusion from U.S. capital markets, exclusion from financial transactions subject to U.S. jurisdiction, and exclusion of that person’s vessels from U.S. ports for up to two years.

On November 24, 2013, the P5+1 (the United States, United Kingdom, Germany, France, Russia and China) entered into an interim agreement with Iran entitled the “Joint Plan of Action”, or the JPOA. Under the JPOA it was agreed that, in exchange for Iran taking certain voluntary measures to ensure that its nuclear program is used only for peaceful purposes, the U.S. and EU would voluntarily suspend certain sanctions for a period of six months. On January 20, 2014, the U.S. and E.U. indicated that they would begin implementing the temporary relief measures provided for under the JPOA. These measures include, among other things, the suspension of certain sanctions on the Iranian petrochemicals, precious metals, and automotive industries from January 20, 2014 until July 20, 2014. The P5+1 and Iran have since extended the JPOA until November 24, 2014. At that time, the P5+1 and Iran agreed to a further extension of these measures until July 1, 2015. Although it is our intention to comply with the provisions of the JPOA, there can be no assurance that we will be in compliance in the future as such regulations and U.S. sanctions may be amended over time, and the U.S. retains the authority to revoke the aforementioned relief if Iran fails to meet its commitments under the JPOA.

Although we believe that we are in compliance with all applicable sanctions and embargo laws and regulations, and intend to maintain such compliance, there can be no assurance that we will be in compliance in the future, particularly as the scope of certain laws may be unclear and may be subject to changing interpretations. Any such violation could result in fines or other penalties and could severely impact our ability to access U.S. capital markets and conduct our business, and could result in some investors deciding, or being required, to divest their interest, or not to invest, in us. In addition, certain institutional investors may have investment policies or restrictions that prevent them from holding securities of companies that have contracts with countries identified by the U.S. government as state sponsors of terrorism. The determination by these investors not to invest in, or to divest from, our securities may adversely affect the price at which our securities trade. Moreover, our charterers may violate applicable sanctions and embargo laws and regulations as a result of actions that do not involve us or our vessels, and those violations could in turn negatively affect our reputation. In addition, our reputation and the market for our securities may be adversely affected if we engage in certain other activities, such as entering into charters with individuals or entities in countries subject to U.S. sanctions and embargo laws that are not controlled by the governments of those countries, or engaging in operations associated with those countries pursuant to contracts with third parties that are unrelated to those countries or entities controlled by their governments. Investor perception of the value of our securities may be adversely affected by the consequences of war, the effects of terrorism, civil unrest and governmental actions in these and surrounding countries.

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Our operating results will be subject to seasonal fluctuations, which could affect our operating results.

We operate our vessels in markets that have historically exhibited seasonal variations in demand and, as a result, in charter hire rates. This seasonality may result in volatility in our operating results to the extent that we enter into new charter agreements or renew existing agreements during a time when charter rates are weaker or we operate our vessels on the spot market or index based time charters, which may result in quarter-to-quarter volatility in our operating results. The drybulk sector is typically stronger in the fall and winter months in anticipation of increased consumption of coal and other raw materials in the northern hemisphere. In addition, unpredictable weather patterns in these months tend to disrupt vessel scheduling and supplies of certain commodities. As a result, our revenues from our drybulk carriers may be weaker during the fiscal quarters ended June 30 and September 30, and, conversely, our revenues from our drybulk carriers may be stronger in fiscal quarters ended December 31 and March 31.

We are subject to international safety regulations and the failure to comply with these regulations may subject us to increased liability, may adversely affect our insurance coverage and may result in a denial of access to, or detention in, certain ports.

The operation of our vessels is affected by the requirements set forth in the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention, or the ISM Code. The ISM Code requires ship owners, ship managers and bareboat charterers to develop and maintain an extensive “Safety Management System” that includes the adoption of a safety and environmental protection policy setting forth instructions and procedures for safe operation of vessels and describing procedures for dealing with emergencies. In addition, vessel classification societies impose significant safety and other requirements on our vessels.

The failure of a shipowner or bareboat charterer to comply with the ISM Code may subject it to increased liability, may invalidate existing insurance or decrease available insurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports. Each of the vessels that we have agreed to acquire will be ISM Code-certified when delivered to us. However, if we are subject to increased liability for non-compliance or if our insurance coverage is adversely impacted as a result of non-compliance, it may negatively affect our ability to pay dividends, if any, in the future, on our common shares and interest on our Notes. If any of our vessels are denied access to, or are detained in, certain ports as a result of non-compliance with the ISM Code, our revenues may be adversely impacted.

Increased inspection procedures and tighter import and export controls could increase costs and disrupt our business.

International shipping is subject to various security and customs inspection and related procedures in countries of origin and destination and trans-shipment points. Inspection procedures may result in the seizure of contents of our vessels, delays in the loading, offloading, trans-shipment or delivery and the levying of customs duties, fines or other penalties against us.

It is possible that changes to inspection procedures could impose additional financial and legal obligations on us. Changes to inspection procedures could also impose additional costs and obligations on our customers and may, in certain cases, render the shipment of certain types of cargo uneconomical or impractical. Any such changes or developments may have a material adverse effect on our business, financial condition and results of operations.

The operation of drybulk carriers has certain unique operational risks which could affect our earnings and cash flow.

The operation of certain vessel types, such as drybulk carriers, has certain unique risks. With a drybulk carrier, the cargo itself and its interaction with the vessel can be an operational risk. By their nature, drybulk cargoes are often heavy, dense, easily shifted, and react badly to water exposure. In addition, drybulk carriers are often subjected to battering treatment during unloading operations with grabs, jackhammers (to pry encrusted cargoes out of the hold) and small bulldozers. This treatment may cause damage to the vessel. Vessels damaged due to treatment during unloading procedures may be more susceptible to breach at sea. Hull breaches in drybulk carriers may lead to the flooding of the vessels’ holds. If a drybulk carrier suffers flooding in its forward holds, the bulk cargo may become so dense and waterlogged that its pressure may buckle the vessel’s bulkheads, leading to the loss of a vessel. If we are unable to adequately maintain our vessels, we may be unable to prevent these events. Any of these circumstances or events may have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends, if any, in the future, on our common shares, and interest on our Notes. In addition, the loss of any of our vessels could harm our reputation as a safe and reliable vessel owner and operator.

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Rising fuel, or bunker, prices may adversely affect our profits.

Since we primarily employ our vessels in the spot market or in spot market-oriented pools, we expect that fuel, or bunkers, will be typically the largest expense in our shipping operations for our vessels. While we believe that we will experience a competitive advantage as a result of increased bunker prices due to the greater fuel efficiency of our vessels compared to the average global fleet, changes in the price of fuel may adversely affect our profitability. The price and supply of fuel is unpredictable and fluctuates based on events outside our control, including geopolitical developments, supply and demand for oil and gas, actions by the Organization of the Petroleum Exporting Countries, or OPEC, and other oil and gas producers, war and unrest in oil producing countries and regions, regional production patterns and environmental concerns. Further, fuel may become much more expensive in the future, which may reduce our profitability.

Our business has inherent operational risks, which may not be adequately covered by insurance.

Our vessels and their cargoes are at risk of being damaged or lost because of events such as marine disasters, bad weather, mechanical failures, human error, environmental accidents, war, terrorism, piracy and other circumstances or events. In addition, transporting cargoes across a wide variety of international jurisdictions creates a risk of business interruptions due to political circumstances in foreign countries, hostilities, labor strikes and boycotts, the potential for changes in tax rates or policies, and the potential for government expropriation of our vessels. Any of these events may result in loss of revenues, increased costs and decreased cash flows to our customers, which could impair their ability to make payments to us under our charters.

In the event of a casualty to a vessel or other catastrophic event, we will rely on our insurance to pay the insured value of the vessel or the damages incurred. We procure insurance for the vessels in our fleet against those risks that we believe the shipping industry commonly insures against. These insurances include marine hull and machinery insurance, protection and indemnity insurance, which include pollution risks and crew insurances, and war risk insurance. Currently, the amount of coverage for liability for pollution, spillage and leakage available to us on commercially reasonable terms through protection and indemnity associations and providers of excess coverage is $1 billion per vessel per occurrence.

We will procure hull and machinery insurance, protection and indemnity insurance, which includes environmental damage and pollution insurance coverage, and war risk insurance for our fleet. We do not maintain for our vessels insurance against loss of hire, which covers business interruptions that result from the loss of use of a vessel. We may not be adequately insured against all risks. We may not be able to obtain adequate insurance coverage for our fleet in the future, and we may not be able to obtain certain insurance coverages. The insurers may not pay particular claims. Our insurance policies may contain deductibles for which we will be responsible and limitations and exclusions which may increase our costs or lower our revenue. Moreover, insurers may default on claims they are required to pay.

We cannot assure you that we will be adequately insured against all risks or that we will be able to obtain adequate insurance coverage at reasonable rates for our vessels in the future. For example, in the past more stringent environmental regulations have led to increased costs for, and in the future may result in the lack of availability of, insurance against risks of environmental damage or pollution. Additionally, our insurers may refuse to pay particular claims. Any significant loss or liability for which we are not insured could have a material adverse effect on our financial condition.

Maritime claimants could arrest one or more of our vessels, which could interrupt our cash flow.

Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime lien against a vessel for unsatisfied debts, claims or damages. In many jurisdictions, a claimant may seek to obtain security for its claim by arresting a vessel through foreclosure proceedings. The arrest or attachment of one or more of our vessels could interrupt our cash flow and require us to pay large sums of money to have the arrest or attachment lifted. In addition, in some jurisdictions, such as South Africa, under the “sister ship” theory of liability, a claimant may arrest both the vessel which is subject to the claimant’s maritime lien and any “associated” vessel, which is any vessel owned or controlled by the same owner. Claimants could attempt to assert “sister ship” liability against one vessel in our fleet for claims relating to another of our vessels.

Governments could requisition our vessels during a period of war or emergency, resulting in a loss of earnings.

A government could requisition one or more of our vessels for title or for hire. Requisition for title occurs when a government takes control of a vessel and becomes her owner, while requisition for hire occurs when a government takes control of a vessel and effectively becomes her charterer at dictated charter rates. Generally, requisitions occur during periods of war or emergency, although governments may elect to requisition vessels in other circumstances. Although we would be entitled to compensation in the event of a requisition of one or more of our vessels, the amount and timing of payment would be uncertain. Government requisition of one or more of our vessels may negatively impact our revenues.

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Failure to comply with the U.S. Foreign Corrupt Practices Act could result in fines, criminal penalties, charter terminations and an adverse effect on our business.

We may operate in a number of countries throughout the world, including countries known to have a reputation for corruption. We are committed to doing business in accordance with applicable anti-corruption laws and have adopted a code of business conduct and ethics which is consistent and in full compliance with the U.S. Foreign Corrupt Practices Act of 1977, or the FCPA. We are subject, however, to the risk that we, our affiliated entities or our or their respective officers, directors, employees and agents may take actions determined to be in violation of such anti-corruption laws, including the FCPA. Any such violation could result in substantial fines, sanctions, civil and/or criminal penalties and curtailment of operations in certain jurisdictions, and might adversely affect our business, results of operations or financial condition. In addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore, detecting, investigating, and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management.

COMPANY SPECIFIC RISK FACTORS

We are a recently formed company with a limited history of operations.

We are a recently formed company and have a limited performance record, operating history and historical financial statements upon which you can evaluate our operations or our ability to implement and achieve our business strategy. We cannot assure you that we will be successful in implementing our business strategy. In addition, while our Chief Executive Officer and the management teams of our commercial and technical managers have experience operating drybulk carriers, other members of our senior management, who have experience operating tanker and other classes of vessels, have limited experience operating drybulk carriers. We believe that the experience of our senior management in the ownership and operation of tanker vessels, which require significant technical expertise to operate and are subject to heightened regulatory oversight and more rigorous vetting procedures from charterers than drybulk carriers, provides our management team with the expertise and qualifications to manage drybulk carriers, however we cannot assure you that they will be able to successfully operate our fleet.

The Scorpio Group Pools in which our vessels operate, or are expected to operate, are or will be newly formed and will have limited or no prior operating history. We cannot assure you that these pools will be successful in finding employment for all of our vessels.

The Scorpio Group pools in which our vessels operate, or are expected to operate, are or will be newly formed and will have limited or no prior operating history. We will own a large number of vessels that will enter these pools in a relatively short period of time without having previously secured employment. We cannot assure you that these pools will be successful in finding employment for all such vessels in the volatile spot market immediately upon their deliveries to us or whether any such employment will be at profitable rates. We cannot assure you that our vessels will be profitably operated by such pools. In addition, vessels owned by our affiliates, including members of the Scorpio Group, which includes Scorpio Ship Management S.A.M., or SSM, which provides us with vessel technical management services, Scorpio Commercial Management S.A.M., or SCM, which provides us with vessel commercial management services, and Scorpio Services Holding Limited, or SSH, which provides us and other related entities with administrative services and services related to the acquisition of vessels, as well as by unaffiliated third-parties, may participate in such pools. Such vessels may not be of the comparable design or quality to our vessels, negatively impacting the profitability of such pools, while diluting our interest in such profits.

Newbuilding projects are subject to risks that could cause delays, cost overruns or cancellation of our newbuilding contracts.

We are currently party to shipbuilding contracts, with established shipyards in Japan, China, South Korea and Romania for the construction of 72 newbuilding vessels, of which 63 are for drybulk carriers and nine are for product tankers, for an aggregate purchase price of $2,824.5 million. These vessels are expected to be delivered to us between the second quarter of 2015 and the third quarter of 2017. These construction projects are subject to risks of delay or cost overruns inherent in any large construction project from numerous factors, including shortages of equipment, materials or skilled labor, unscheduled delays in the delivery of ordered materials and equipment or shipyard construction, failure of equipment to meet quality and/or performance standards, financial or operating difficulties experienced by equipment vendors or the shipyard, unanticipated actual or purported change orders, inability to obtain required permits or approvals, unanticipated cost increases between order and delivery, design or engineering changes and work stoppages and other labor disputes, adverse weather conditions or any other events of force majeure. Significant cost overruns or delays could adversely affect our financial position, results of operations and cash flows. Additionally, failure to complete a project on time may result in the delay of revenue from that vessel.

As of December 31, 2014 we had made total yard payments in the amount of $945.0 million and we have remaining yard installments relating to the 78 newbuilding vessels we had as of that date, including the six drybulk vessels we have taken delivery

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of in 2015 and the seven newbuilding vessels we have classified as assets held for sale, in the amount of $2,109.7 million before we take possession of the vessels. In order to reduce our newbuilding commitments, we have agreed to sell one Kamsarmax newbuilding vessel and have converted nine of our drybulk construction contracts to construction contracts for product tankers, of which Scorpio Tankers Inc. (NYSE:STNG), or Scorpio Tankers, a member of the Scorpio Group of companies, has agreed to purchase four and has the option to purchase an additional two. We had, as of December 31, 2014, a cash balance of $272.7 million and we currently have available debt financing in the amount of $1,370.9 million (including a commitment for a $230.3 million credit facility that is expected to be secured by seven of the vessels in our Newbuilding Program and which is subject to important conditions, including the negotiation and execution of definitive documentation, and excluding a $26.0 million credit facility that is expected to be repaid once the $230.3 million credit facility is drawn) to fund future newbuilding commitments, of which $1,231.9 million is currently available to us to be drawn; however, a significant portion of our remaining commitments are currently unfunded. If we are not able to borrow additional funds, enter into expected credit facilities, raise other capital or utilize available cash on hand, we may not be able to acquire these newbuilding vessels, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. If for any reason we fail to make a payment when due, which may result in a default under our newbuilding contracts, or otherwise fail to take delivery of our newbuilding vessels, we would be prevented from realizing potential revenues from these vessels, we could also lose all or a portion of our yard payments that were paid by us and we could be liable for penalties and damages under such contracts.

In addition, in the event the shipyards do not perform under their contracts and we are unable to enforce certain refund guarantees with third party banks for any reason, we may lose all or part of our investment, which would have a material adverse effect on our results of operations, financial condition and cash flows.

We are subject to certain risks with respect to our counterparties on contracts, and failure of such counterparties to meet their obligations could cause us to suffer losses or negatively impact our results of operations and cash flows.

We have entered into, and may enter into the future, various contracts, including pooling arrangements, charter agreements, shipbuilding contracts and credit facilities. Such agreements subject us to counterparty risks. The ability of each of our counterparties to perform its obligations under a contract with us will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the maritime and offshore industries, the overall financial condition of the counterparty, charter rates received for specific types of vessels, and various expenses. For example, the combination of a reduction of cash flow resulting from declines in world trade, a reduction in borrowing bases under reserve-based credit facilities and the lack of availability of debt or equity financing may result in a significant reduction in the ability of our charterers to make charter payments to us. In addition, in depressed market conditions, our charterers and customers may no longer need a vessel that is then under charter or contract or may be able to obtain a comparable vessel at lower rates. As a result, charterers and customers may seek to renegotiate the terms of their existing charter agreements or avoid their obligations under those contracts. Should a counterparty fail to honor its obligations under agreements with us, we could sustain significant losses which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We are, and expect to continue to be, dependent on spot market-oriented pools and spot charters and any decrease in spot charter rates in the future may adversely affect our earnings.

The Scorpio Group Pools, in which our vessels operate, or are expected to operate, are spot market-oriented commercial pools managed by our commercial manager, which expose fluctuations in spot market charter rates. The spot charter market may fluctuate significantly based upon drybulk carrier supply and demand. The successful operation of our vessels in the competitive spot charter market, including within the Scorpio Group Pools, depends on, among other things, obtaining profitable spot charters and minimizing, to the extent possible, time spent waiting for charters and time spent traveling unladen to pick up cargo. The spot market is very volatile, and, in the recent past, there have been periods when spot charter rates have declined below the operating cost of vessels and for some vessel classes are currently only slightly above operating costs. If future spot charter rates decline, then we may be unable to operate our vessels trading in the spot market profitably, meet our obligations, including payments on indebtedness, or pay dividends in the future. Furthermore, as charter rates for spot charters are fixed for a single voyage which may last up to several weeks, during periods in which spot charter rates are rising, we will generally experience delays in realizing the benefits from such increases.

Our ability to renew expiring charters or obtain new charters will depend on the prevailing market conditions at the time. If we are not able to obtain new charters in direct continuation with previous charters, or if new charters are entered into at charter rates substantially below the existing charter rates or on terms otherwise less favorable compared to previous charter terms, our revenues and profitability could be adversely affected.

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The failure of our charterers to meet their obligations under our charter agreements, on which we depend for our revenues, could cause us to suffer losses or otherwise adversely affect our business.

We do not expect to employ any of our vessels under a long-term time charter agreement but we may enter into such agreements in the future. The ability and willingness of each of our counterparties to perform their obligations under a time charter, spot voyage or other agreement with us, directly or through our pooling arrangements, will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the drybulk shipping industry and the overall financial condition of the counterparties. In addition, in depressed market conditions, there have been reports of charterers renegotiating their charters or defaulting on their obligations under charters. Our customers may fail to pay charterhire or attempt to renegotiate charter rates. Should a counterparty fail to honor its obligations under agreements with us, it may be difficult to secure substitute employment for such vessel, and any new charter arrangements we secure in the spot market or on time charters may be at lower rates given currently decreased drybulk carrier charter rate levels. When we employ a vessel in the spot charter market, we intend to place such vessel in a drybulk carrier pool managed by our commercial manager that pertains to that vessel’s size class. If our charterers fail to meet their obligations to us or attempt to renegotiate our charter agreements, we could sustain significant losses which could have a material adverse effect on our business, financial condition, results of operations and cash flows, as well as our ability to pay dividends, if any, in the future, on our common shares and interest on our Notes, and comply with covenants in our credit facilities.

We cannot assure you that our board of directors will declare dividends.

We currently do not intend to pay dividends to the holders of our common shares. Our board of directors will continue to assess our dividend policy and may in the future determine to pay dividends. The declaration and payment of dividends, if any, will always be subject to the discretion of our board of directors, restrictions contained in our credit facility and the requirements of Marshall Islands law. The timing and amount of any dividends declared will depend on, among other things, our earnings, financial condition and cash requirements and availability, our ability to obtain debt and equity financing on acceptable terms as contemplated by our growth strategy, the terms of our outstanding indebtedness and the ability of our subsidiaries to distribute funds to us. The international drybulk shipping industry is highly volatile, and we cannot predict with certainty the amount of cash, if any, that will be available for distribution as dividends in any period. Also, there may be a high degree of variability from period to period in the amount of cash that is available for the payment of dividends. Until we take delivery of the vessels we have agreed to acquire or identify and acquire additional vessels and deploy them on charters, we will not generate cash from operations for dividends. Accordingly, it may take substantial time before it would be possible for us to pay any dividends.

We may incur expenses or liabilities or be subject to other circumstances in the future that reduce or eliminate the amount of cash that we have available for distribution as dividends, including as a result of the risks described herein. Our growth strategy contemplates that we will finance our acquisitions of additional vessels through debt financings or the net proceeds of future equity issuances on terms acceptable to us. If financing is not available to us on acceptable terms, our board of directors may determine to finance or refinance acquisitions with cash from operations, which would reduce the amount of any cash available for the payment of dividends.

In general, under the terms of our credit facilities, we are not permitted to pay dividends if there is a default or a breach of a loan covenant. Please see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources” for more information relating to restrictions on our ability to pay dividends under the terms of our proposed credit facilities.

The Republic of Marshall Islands laws generally prohibit the payment of dividends other than from surplus (retained earnings and the excess of consideration received for the sale of shares above the par value of the shares) or while a company is insolvent or would be rendered insolvent by the payment of such a dividend. We may not have sufficient surplus in the future to pay dividends and our subsidiaries may not have sufficient funds or surplus to make distributions to us. We can give no assurance that dividends will be paid at all.

We may have difficulty managing our planned growth properly.

As of the date of this annual report, we have entered into shipbuilding contracts with established shipyards in Japan, China, South Korea and Romania for the construction of 62 latest generation drybulk vessels, excluding one newbuilding Kamsarmax vessel that we have agreed to sell. In addition we have chartered in 13 vessels, which we employ in the Scorpio Group Pools. One of our principal strategies is to continue to grow by expanding our operations and adding to our fleet. Our future growth will primarily depend upon a number of factors, some of which may not be within our control. These factors include our ability to:

• identify suitable drybulk carriers, including newbuilding slots at shipyards and/or shipping companies for acquisitions at attractive prices;

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• obtain required financing for our existing and new operations;

• identify businesses engaged in managing, operating or owning drybulk carriers for acquisitions or joint ventures;

• integrate any acquired drybulk carriers or businesses successfully with our existing operations, including obtaining any approvals and qualifications necessary to operate vessels that we acquire;

• hire, train and retain qualified personnel and crew to manage and operate our growing business and fleet;

• identify additional new markets;

• enhance our customer base; and

• improve our operating, financial and accounting systems and controls.

Our failure to effectively identify, acquire, develop and integrate any drybulk carriers or businesses could adversely affect our business, financial condition and results of operations. The number of employees that perform services for us and our current operating and financial systems may not be adequate as we implement our plan to expand the size of our fleet in the drybulk sector, and we may not be able to effectively hire more employees or adequately improve those systems. Finally, acquisitions may require additional equity issuances, which may dilute our common shareholders if issued at lower prices than the price they acquired their shares, or debt issuances (with amortization payments), both of which could lower our available cash. If any such events occur, our financial condition may be adversely affected.

Growing any business by acquisition presents numerous risks such as undisclosed liabilities and obligations, difficulty in obtaining additional qualified personnel and managing relationships with customers and suppliers and integrating newly acquired operations into existing infrastructures. The expansion of our fleet may impose significant additional responsibilities on our management and staff, and the management and staff of our commercial and technical managers, and may necessitate that we, and they, increase the number of personnel. We cannot give any assurance that we will be successful in executing our growth plans or that we will not incur significant expenses and losses in connection with our future growth.

As we expand our business, we may need to improve our operating and financial systems and will need to recruit suitable employees and crew for our vessels.

Our current operating and financial systems may not be adequate as we implement our plan to take delivery of 42 newbuilding vessels during 2015 (six of which have been delivered to us through March 30, 2015) and 26 newbuilding vessels during 2016 and to expand the size of our fleet through acquiring and chartering in additional vessels, and our attempts to improve those systems may be ineffective. In addition, if we further expand our fleet, we will need to recruit suitable additional seafarers and shore side administrative and management personnel. We cannot guarantee that we will be able to hire suitable employees as we expand our fleet. If we or our crewing agent encounters business or financial difficulties, we may not be able to adequately staff our vessels. If we are unable to grow our financial and operating systems or to recruit suitable employees as we expand our fleet, our financial performance may be adversely affected and, among other things, the amount of cash available for distribution as dividends to our shareholders may be reduced.

If we acquire and operate secondhand vessels, we will be exposed to increased operating costs which could adversely affect our earnings and, as our fleet ages, the risks associated with older vessels could adversely affect our ability to obtain profitable charters.

Our current business strategy includes additional growth which may, in addition to the acquisition of newbuilding vessels, include the acquisition of modern secondhand vessels. While we expect that we would typically inspect secondhand vessels prior to acquisition, this does not provide us with the same knowledge about their condition that we would have had if these vessels had been built for and operated exclusively by us. Generally, purchasers of secondhand vessels do not receive the benefit of warranties from the builders for the secondhand vessels that they acquire.

Governmental regulations, safety or other equipment standards related to the age of vessels may require expenditures for alterations, or the addition of new equipment to our vessels and may restrict the type of activities in which the vessels may engage. As our vessels age, market conditions may not justify those expenditures or enable us to operate our vessels profitably during the remainder of their useful lives.

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The aging of our fleet may result in increased operating costs in the future, which could adversely affect our earnings.

In general, the cost of maintaining a vessel in good operating condition increases with the age of the vessel. While all of the vessels in our owned fleet will be newbuildings, as our vessels age typically they will become less fuel-efficient and more costly to maintain than more recently constructed vessels due to improvements in engine technology. Cargo insurance rates increase with the age of a vessel, making older vessels less desirable to charterers. Governmental regulations and safety or other equipment standards related to the age of vessels may also require expenditures for alterations or the addition of new equipment to our vessels and may restrict the type of activities in which our vessels may engage. We cannot assure you that, as our vessels age, market conditions will justify those expenditures or enable us to operate our vessels profitably during the remainder of their useful lives.

Technological innovation could reduce our charter hire income and the value of our vessels.

The charter hire rates and the value and operational life of a vessel are determined by a number of factors including the vessel’s efficiency, operational flexibility and physical life. Efficiency includes speed, fuel economy and the ability to load and discharge cargo quickly. Flexibility includes the ability to enter harbors, utilize related docking facilities and pass through canals and straits. The length of a vessel’s physical life is related to its original design and construction, its maintenance and the impact of the stress of operations. If new drybulk carriers are built that are more efficient or more flexible or have longer physical lives than our vessels, competition from these more technologically advanced vessels could adversely affect the amount of charterhire payments we receive for our vessels once their initial charters expire and the resale value of our vessels could significantly decrease. As a result, our business, results of operations, cash flows and financial condition could be adversely affected.

In the highly competitive international shipping industry, we may not be able to compete for charters with new entrants or established companies with greater resources, and as a result, we may be unable to employ our vessels profitably.

Our vessels will be employed in a highly competitive market that is capital intensive and highly fragmented. Competition arises primarily from other vessel owners, some of whom have substantially greater resources than we do. Competition for the transportation of drybulk cargo by sea is intense and depends on price, location, size, age, condition and the acceptability of the vessel and its operators to the charterers. Due in part to the highly fragmented market, competitors with greater resources could enter the drybulk shipping industry and operate larger fleets through consolidations or acquisitions and may be able to offer lower charter rates and higher quality vessels than we are able to offer. If we are unable to successfully compete with other drybulk shipping companies, our results of operations would be adversely impacted.

We may be subject to litigation that, if not resolved in our favor and not sufficiently insured against, could have a material adverse effect on us.

We may be, from time to time, involved in various litigation matters. These matters may include, among other things, contract disputes, personal injury claims, environmental claims or proceedings, asbestos and other toxic tort claims, employment matters, governmental claims for taxes or duties, and other litigation that arises in the ordinary course of our business. Although we intend to defend these matters vigorously, we cannot predict with certainty the outcome or effect of any claim or other litigation matter, and the ultimate outcome of any litigation or the potential costs to resolve them may have a material adverse effect on us. Insurance may not be applicable or sufficient in all cases and/or insurers may not remain solvent which may have a material adverse effect on our financial condition.

We are a holding company, and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations and to make dividend payments.

We are a holding company and our subsidiaries conduct all of our operations and own all of our operating assets. We have no significant assets other than the equity interests in our subsidiaries. As a result, our ability to satisfy our financial obligations and to make dividend payments in the future depends on our subsidiaries and their ability to distribute funds to us. If we are unable to obtain funds from our subsidiaries, our board of directors may exercise its discretion not to declare or pay dividends. We do not intend to obtain funds from other sources to pay dividends.

Because we are organized under the laws of the Marshall Islands, it may be difficult to serve us with legal process or enforce judgments against us, our directors or our management.

We are organized under the laws of the Marshall Islands, and substantially all of our assets are located outside of the United States. In addition, the majority of our directors and officers are or will be non-residents of the United States, and all or a substantial portion of the assets of these non-residents are located outside the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States if you believe that your rights

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have been infringed under securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Marshall Islands and of other jurisdictions may prevent or restrict you from enforcing a judgment against our assets or the assets of our directors or officers.

The international nature of our operations may make the outcome of any bankruptcy proceedings difficult

to predict.

We are incorporated under the laws of the Republic of the Marshall Islands and we conduct operations in countries around the world. Consequently, in the event of any bankruptcy, insolvency, liquidation, dissolution, reorganization or similar proceeding involving us or any of our subsidiaries, bankruptcy laws other than those of the United States could apply. If we become a debtor under U.S. bankruptcy law, bankruptcy courts in the United States may seek to assert jurisdiction over all of our assets, wherever located, including property situated in other countries. There can be no assurance, however, that we would become a debtor in the United States, or that a U.S. bankruptcy court would be entitled to, or accept, jurisdiction over such a bankruptcy case, or that courts in other countries that have jurisdiction over us and our operations would recognize a U.S. bankruptcy court’s jurisdiction if any other bankruptcy court would determine it had jurisdiction.

We may have to pay tax on United States source income, which would reduce our earnings and cash flow.

Under the United States Internal Revenue Code of 1986, as amended, or the Code, 50% of the gross shipping income of a vessel owning or chartering corporation, such as ourselves and our subsidiaries, that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States is characterized as United States source shipping income and such income is subject to a 4% United States federal income tax without allowance for any deductions, unless that corporation qualifies for exemption from tax under Section 883 of the Code and the Treasury regulations promulgated thereunder.

We have taken the position that we qualified for this statutory exemption for U.S. federal income tax return reporting purposes for our 2014 taxable year and we intend to so qualify for future taxable years. However, there are factual circumstances beyond our control that could cause us to lose the benefit of this tax exemption and thereby cause us to become subject to United States federal income tax on our United States source shipping income. For example, there is a risk that we could no longer qualify for exemption under Section 883 of the Code for a particular taxable year if “non-qualified” shareholders with a five percent or greater interest in our stock were, in combination with each other, to own 50% or more of the outstanding shares of our stock on more than half the days during the taxable year. Due to the factual nature of the issues involved, we can give no assurances on our tax-exempt status or that of any of our subsidiaries.

If we are not entitled to this exemption under Section 883 of the Code for any taxable year, we would be subject for such taxable year to a 4% United States federal income tax on our United States source shipping income on a gross basis. The imposition of this taxation could have a negative effect on our business and would result in decreased earnings and cash available for distribution to our shareholders and to pay amounts due on our Notes.

United States tax authorities could treat us as a “passive foreign investment company,” which could have adverse United States federal income tax consequences to United States shareholders.

A foreign corporation will be treated as a “passive foreign investment company,” or PFIC, for United States federal income tax purposes if either (1) at least 75% of its gross income for any taxable year consists of certain types of “passive income” or (2) at least 50% of the average value of the corporation’s assets produce or are held for the production of those types of “passive income,” including cash. For purposes of these tests, “passive income” includes dividends, interest, and gains from the sale or exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business. For purposes of these tests, income derived from the performance of services does not constitute “passive income.” United States shareholders of a PFIC are subject to a disadvantageous United States federal income tax regime with respect to the income derived by the PFIC, the distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC.

There is a significant risk that we will be treated as a PFIC for our 2013, 2014 and 2015 taxable years. Whether we are treated as a PFIC will depend, in part, upon whether the deposits that we make on newbuilding contracts are treated as being held for the production of “passive income” and on the amount of “passive income” that we derive for such years.

Thereafter, whether we will be treated as a PFIC will depend upon the nature and extent of our operations. In this regard, we intend to treat the gross income we derive or are deemed to derive from our time chartering activities as services income, rather than rental income. Accordingly, we believe that our income from our time chartering activities does not constitute “passive income,” and the assets that we own and operate in connection with the production of that income do not constitute passive assets. There is, however, no direct legal authority under the PFIC rules addressing our method of operation. Accordingly, no assurance

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can be given that the United States Internal Revenue Service, or IRS, or a court of law will accept our position, and there is a risk that the IRS or a court of law could determine that we are a PFIC. Moreover, no assurance can be given that we would not constitute a PFIC for any taxable year if there were to be changes in the nature and extent of our operations.

If we were treated as a PFIC for any taxable year, our United States shareholders may face adverse United States federal income tax consequences and information reporting obligations. Under the PFIC rules, unless those shareholders made an election available under the Code (which election could itself have adverse consequences for such shareholders), such shareholders would be liable to pay United States federal income tax upon excess distributions and upon any gain from the disposition of our common shares at the then prevailing income tax rates applicable to ordinary income plus interest as if the excess distribution or gain had been recognized ratably over the shareholder’s holding period of our common shares. See “Item 10. Additional Information – E. Taxation – U.S. Federal Income Tax Considerations – U.S. Federal Income Taxation of U.S. Holders – Passive Foreign Investment Company Status and Significant Tax Consequences” for a more comprehensive discussion of the U.S. federal income tax consequences to U.S. holders of our common shares if we are or were to be treated as a PFIC.

Risks Related to Our Relationship with Scorpio Group and its Affiliates

We are dependent on our managers and their ability to hire and retain key personnel, and there may be conflicts of interest between us and our managers that may not be resolved in our favor.

Our success depends to a significant extent upon the abilities and efforts of our technical manager, SSM, our commercial manager, SCM, and our management team. Our success will depend upon our and our managers’ ability to hire and retain key members of our management team. The loss of any of these individuals could adversely affect our business prospects and financial condition.

Difficulty in hiring and retaining personnel could adversely affect our results of operations. We do not maintain “key man” life insurance on any of our officers.

Our technical and commercial managers are affiliates of the Scorpio Group, which is owned and controlled by the Lolli-Ghetti family, of which our founder, Chairman and Chief Executive Officer, Mr. Emanuele Lauro, is a member. Conflicts of interest may arise between us, on the one hand, and our commercial and technical managers, on the other hand. As a result of these conflicts, our commercial and technical managers, who have limited contractual duties, may favor their own or their owner’s interests over our interests. These conflicts may have unfavorable results for us.

Our Co-Founder, Chairman and Chief Executive Officer, has affiliations with our commercial and technical managers which may create conflicts of interest.

Emanuele Lauro, our Co-Founder, Chairman and Chief Executive Officer, is a member of the Lolli-Ghetti family which owns and controls our commercial and technical managers. These relationships could create conflicts of interest between us, on the one hand, and our commercial and technical managers, on the other hand. These conflicts may arise in connection with the chartering, purchase, sale and operation of the vessels in our fleet versus vessels managed by other companies affiliated with our commercial or technical managers. In particular, as of the date of this annual report, our commercial and technical managers provide commercial and technical management services to approximately 130 and 67 vessels, respectively, other than the vessels in our fleet, that are operated by entities affiliated with Mr. Lauro, and such entities may operate additional vessels that will compete with our vessels in the future. Such conflicts may have an adverse effect on our results of operations.

Our Chief Executive Officer, President, Chief Operating Officer, Vice President, Vessel Operations, General Counsel and Secretary do not devote all of their time to our business, which may hinder our ability to operate successfully.

Our Chief Executive Officer, President, Chief Operating Officer, Vice President, Vessel Operations, General Counsel and Secretary participate in business activities not associated with us, including serving as members of the management team of Scorpio Tankers, and are not required to work full-time on our affairs. We expect that each of our executive officers will continue to devote a substantial portion of his business time to the completion of our Newbuilding Program and management of the Company. Additionally, our Chief Executive Officer, President, Chief Operating Officer, Vice President, Vessel Operations, General Counsel and Secretary serve in similar positions in the Scorpio Group. As a result, such officers may devote less time to us than if they were not engaged in other business activities and may owe fiduciary duties to the shareholders of both us as well as shareholders of other companies which they may be affiliated with, including Scorpio Tankers and Scorpio Group companies. This may create conflicts of interest in matters involving or affecting us and our customers and it is not certain that any of these conflicts of interest will be resolved in our favor. This could have a material adverse effect on our business, financial condition, results of operations and cash flows.

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Our commercial and technical managers are each privately held companies and there is little or no publicly available information about them.

Our vessels are, or are expected to be upon their delivery to us, commercially managed by SCM and technically managed by SSM. SCM’s and SSM’s ability to render management services will depend in part on their own financial strength. Circumstances beyond our control could impair our commercial manager’s or technical manager’s financial strength, and because each is a privately held company, information about the financial strength of our commercial manager and technical manager is not available. As a result, we and our shareholders might have little advance warning of financial or other problems affecting our commercial manager or technical manager even though their financial or other problems could have a material adverse effect on us.

RISKS RELATED TO OUR INDEBTEDNESS

Servicing our current or future indebtedness limits funds available for other purposes and if we cannot service our debt, we may lose our vessels.

Borrowing under our credit facilities requires us to dedicate a part of our cash flow from operations to paying interest on our indebtedness under such facilities. These payments limit funds available for working capital, capital expenditures and other purposes, including further equity or debt financing in the future. Amounts borrowed under our credit facilities bear interest at variable rates. Increases in prevailing rates could increase the amounts that we would have to pay to our lenders, even though the outstanding principal amount remains the same, and our net income and cash flows would decrease. We expect our earnings and cash flow to vary from year to year due to the cyclical nature of the drybulk carrier industry. If we do not generate or reserve enough cash flow from operations to satisfy our debt obligations, we may have to undertake alternative financing plans, such as:

• seeking to raise additional capital;

• refinancing or restructuring our debt;

• selling drybulk carriers; or

• reducing or delaying capital investments.

However, these alternative financing plans, if necessary, may not be sufficient to allow us to meet our debt obligations. If we are unable to meet our debt obligations or if some other default occurs under our credit facilities, our lenders could elect to declare that debt, together with accrued interest and fees, to be immediately due and payable and proceed against the collateral vessels securing that debt.

We expect to be exposed to volatility in the London Interbank Offered Rate, or LIBOR, and intend to selectively enter into derivative contracts, which can result in higher than market interest rates and charges against our income.

We expect the loans under our secured credit facilities to be generally advanced at a floating rate based on LIBOR, which has been stable, but was volatile in prior years, which can affect the amount of interest payable on our debt, and which, in turn, could have an adverse effect on our earnings and cash flow. In addition, in recent years, LIBOR has been at relatively low levels, and may rise in the future as the current low interest rate environment comes to an end. Our financial condition could be materially adversely affected at any time that we have not entered into interest rate hedging arrangements to hedge our exposure to the interest rates applicable to our credit facilities and any other financing arrangements we may enter into in the future, including those we enter into to finance a portion of the amounts payable with respect to newbuildings. Moreover, even if we have entered into interest rate swaps or other derivative instruments for purposes of managing our interest rate exposure, our hedging strategies may not be effective and we may incur substantial losses.

We intend to selectively enter into derivative contracts to hedge our overall exposure to interest rate risk exposure. Entering into swaps and derivatives transactions is inherently risky and presents various possibilities for incurring significant expenses. The derivatives strategies that we employ in the future may not be successful or effective, and we could, as a result, incur substantial additional interest costs. See “Item 11. Quantitative and Qualitative Disclosures About Market Risk” for a description of our expected interest rate swap arrangements.

We are leveraged, which could significantly limit our ability to execute our business strategy and

has increased the risk of default under our debt obligations.

As of March 30, 2015, we had $212.6 million of outstanding indebtedness under our outstanding credit facilities and

debt securities.

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Our credit facilities impose operating and financial restrictions on us, that limit our ability, or the ability of our subsidiaries party thereto to:

• pay dividends and make capital expenditures if we do not repay amounts drawn under our credit facilities or if there is another default under our credit facilities;

• incur additional indebtedness, including the issuance of guarantees;

• create liens on our assets;

• change the flag, class or management of our vessels or terminate or materially amend the management agreement relating to each vessel;

• sell our vessels;

• merge or consolidate with, or transfer all or substantially all our assets to, another person; or

• enter into a new line of business.

Therefore, we may need to seek permission from our lenders in order to engage in some corporate actions. Our lenders’ interests may be different from ours and we may not be able to obtain our lenders’ permission when needed. This may limit our ability to pay dividends on our common shares if we determine to do so in the future, and interest on our Notes, finance our future operations or capital requirements, make acquisitions or pursue business opportunities.

In addition, our secured credit facilities, require us to maintain specified financial ratios and satisfy financial covenants, including ratios and covenants based on the market value of the vessels in our fleet. Should our charter rates or vessel values materially decline in the future, we may be required to take action to reduce our debt or to act in a manner contrary to our business objectives to meet any such financial ratios and satisfy any such financial covenants. Events beyond our control, including changes in the economic and business conditions in the shipping markets in which we operate, may affect our ability to comply with these covenants. We cannot assure you that we will meet these ratios or satisfy these covenants or that our lenders will waive any failure to do so. A breach of any of the covenants in, or our inability to maintain the required financial ratios under, our credit facilities would prevent us from borrowing additional money under our credit facilities and could result in a default under our credit facilities. If a default occurs under our credit facilities, the lenders could elect to declare the outstanding debt, together with accrued interest and other fees, to be immediately due and payable and foreclose on the collateral securing that debt, which could constitute all or substantially all of our assets. Please see “Item 5. Operating Financial Review and Prospects—B. Liquidity and Capital Resources—Proposed Credit Facilities.”

RISKS RELATING TO OUR COMMON SHARES

We are incorporated in the Marshall Islands, which does not have a well-developed body of corporate law.

Our corporate affairs are governed by our amended and restated articles of incorporation and bylaws and by the Marshall Islands Business Corporations Act, or the BCA. The provisions of the BCA resemble provisions of the corporation laws of a number of states in the United States. However, there have been few judicial cases in the Marshall Islands interpreting the BCA. The rights and fiduciary responsibilities of directors under the laws of the Marshall Islands are not as clearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in existence in the United States. The rights of shareholders of companies incorporated in the Marshall Islands may differ from the rights of shareholders of companies incorporated in the United States. While the BCA provides that it is to be interpreted according to the laws of the State of Delaware and other states with substantially similar legislative provisions, there have been few, if any, court cases interpreting the BCA in the Marshall Islands and we can’t predict whether Marshall Islands courts would reach the same conclusions as United States courts. Thus, you may have more difficulty in protecting your interests in the face of actions by the management, directors or controlling shareholders than would shareholders of a corporation incorporated in a United States jurisdiction which has developed a relatively more substantial body of case law.

Future sales of our common shares could cause the market price of our common shares to decline.

Our amended and restated articles of incorporation authorize us to issue 450,000,000 common shares, of which we have issued 180,299,695 common shares as of the date of this annual report. Sales of a substantial number of common shares in the public market, or the perception that these sales could occur, may depress the market price for our common shares. These sales could also impair our ability to raise additional capital through the sale of our equity securities in the future. We intend to issue additional common shares in the future. Our shareholders may incur dilution from any future equity offering and upon the issuance

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of additional common shares upon the exercise of options we grant to certain of our executive officers, upon the issuance of additional common shares pursuant to our equity incentive plan or upon the issuance of common shares to SSH as payment of fees for arranging vessel acquisitions pursuant to the Administrative Services Agreement.

Anti-takeover provisions in our organizational documents could have the effect of discouraging, delaying or preventing a merger or acquisition, or could make it difficult for our shareholders to replace or remove our current board of directors, which could adversely affect the market price of our common shares.

Several provisions of our amended and restated articles of incorporation and bylaws could make it difficult for our shareholders to change the composition of our board of directors in any one year, preventing them from changing the composition of management. In addition, the same provisions may discourage, delay or prevent a merger or acquisition that shareholders may consider favorable. These provisions include:

• authorizing our board of directors to issue “blank check” preferred stock without stockholder approval;

• providing for a classified board of directors with staggered, three year terms;

• establishing certain advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on by shareholders at stockholder meetings;

• prohibiting cumulative voting in the election of directors;

• limiting the persons who may call special meetings of shareholders;

• authorizing the removal of directors only for cause and only upon the affirmative vote of the holders of a majority of the outstanding common shares entitled to vote for the directors; and

• establishing supermajority voting provisions with respect to amendments to certain provisions of our amended and restated articles of incorporation and bylaws.

These anti-takeover provisions could substantially impede the ability of public shareholders to benefit from a change in control and, as a result, may adversely affect the market price of our common shares and your ability to realize any potential change of control premium.

Our costs of operating as a public company will be significant, and our management will be required to devote substantial time to complying with public company regulations.

We recently became subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the other rules and regulations of the SEC, including the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and as such, we will have significant legal, accounting and other expenses that we did not incur as a private company. These reporting obligations impose various requirements on public companies, including changes in corporate governance practices, and these requirements may continue to evolve. We and our management personnel, and other personnel, if any, will need to devote a substantial amount of time to comply with these requirements. Moreover, these rules and regulations increase our legal and financial compliance costs and make some activities more time-consuming and costly.

The Sarbanes-Oxley Act requires, among other things, that we maintain and periodically evaluate our internal control over financial reporting and disclosure controls and procedures. In particular, we need to perform system and process evaluation and testing of our internal control over financial reporting to allow management and our independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act. Our compliance with Section 404 may require that we incur substantial accounting expenses and expend significant management efforts.

ITEM 4. INFORMATION ON THE COMPANY

A. History and Development of the Company

Scorpio Bulkers Inc. is an international shipping company that was incorporated in the Republic of the Marshall Islands pursuant to the Marshall Islands Business Corporations Act on March 20, 2013. In December 2013, we completed our underwritten initial public offering of 31,300,000 common shares at $9.75 per share, and in January 2014, the underwriters in the initial public offering exercised their option to purchase an additional 4,695,000 common shares. In February 2014, we completed our offer to

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exchange unregistered common shares that were previously issued in Norwegian equity private placements (other than the common shares owned by affiliates of us) for common shares that were registered under the Securities Act of 1933, as amended, or the Securities Act, which we refer to as the Exchange Offer. Upon completion of the Exchange Offer, holders of 95,766,779 unregistered common shares validly tendered their shares in exchange for such registered common shares, representing a participation rate of 99.7%. On July 31, 2014, we delisted from the Norwegian Over-the-Counter List, or Norwegian OTC List. Our common shares are listed for trading on the New York Stock Exchange, or NYSE, under the symbol “SALT.”

On September 22, 2014, we issued and sold $65.0 million aggregate principal amount of our 7.50% Senior Notes due 2019, or our Notes, in a registered public offering. On October 16, 2014, we issued an additional $8.625 million aggregate principal amount of our Notes, pursuant to the underwriters’ option to purchase additional notes. Our Notes are listed for trading on the NYSE under the symbol “SLTB.”

In addition, on November 20, 2014, we issued and sold an aggregate of 40,000,000 common shares to SSH, certain of our executive officers, and certain institutional investors in a private offering pursuant to a share purchase agreement, which we refer to as the November 2014 Private Placement.

Our principal executive offices are located at 9, Boulevard Charles III, Monaco 98000 and our telephone number at that location is +377-9798-5716.

B. Business Overview

We were formed for the purpose of acquiring and operating the latest generation of newbuilding drybulk carriers with fuel-efficient specifications and carrying capacities of greater than 30,000 dwt. Our vessels transport a broad range of major and minor bulk commodities, including ores, coal, grains, and fertilizers, along worldwide shipping routes, and are, or are expected to be, employed primarily in the spot market or in spot market-oriented pools of similarly sized vessels. As of the date of this annual report, our operating fleet of 21 vessels consists of eight wholly-owned drybulk vessels (one Capesize vessel, three Kamsarmax vessels and four Ultramax vessels) and 13 chartered-in drybulk vessels (three Post-Panamax vessels, three Kamsarmax vessels, two Panamax vessels, one Ultramax vessel, three Supramax vessels and one Handymax vessel), which we refer to collectively as our “Operating Fleet.” We also have contracts for the construction of 62 newbuilding drybulk vessels, consisting of 25 Ultramax, 19 Kamsarmax and 18 Capesize vessels, from shipyards in Japan, South Korea, China and Romania. In addition, we have converted our contracts for the construction of an additional nine drybulk vessels into construction contracts for the same number of product tankers, consisting of six LR2 product tankers, of which Scorpio Tankers has agreed to purchase four and has the option to purchase the remaining two by May 31, 2015, and three LR1 product tankers, all of which are currently held for sale. We collectively refer to all of our newbuilding vessels that are currently under construction as our “Newbuilding Program.” We expect to take delivery of the drybulk vessels in our Newbuilding Program as follows: 26 in 2015 and 36 in 2016. Upon final delivery of all of the drybulk vessels in our Newbuilding Program, our owned fleet is expected to have a total carrying capacity of approximately 7.0 million dwt.

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Our Fleet

The following tables set forth certain summary information regarding our Operating Fleet and Newbuilding Program as of the date of this annual report:

Operating Fleet

Owned vessels

Vessel Name	Year Built	DWT	Vessel Type
SBI Puro	2015	180,000	Capesize
Total Capesize		180,000
SBI Cakewalk	2014	82,000	Kamsarmax
SBI Charleston	2014	82,000	Kamsarmax
SBI Samba	2015	84,000	Kamsarmax
Total Kamsarmax		248,000
SBI Antares	2015	61,000	Ultramax
SBI Athena	2015	64,000	Ultramax
SBI Bravo	2015	61,000	Ultramax
SBI Leo	2015	61,000	Ultramax
Total Ultramax		247,000
Aggregate Owned DWT		675,000

Time chartered-in vessels

Vessel Type	Year Built	DWT	Where Built	Daily Base Rate		Earliest Expiry
Post-Panamax	2012	98,700	China	$	13,000	15-Oct-16	(1)
Post-Panamax	2009	93,000	China	See Note (2)		09-May-15	(2)
Post-Panamax	2011	93,000	China	$	9,500	11-Aug-15	(3)
Kamsarmax	2014	82,500	South Korea	$	12,000	23-Jul-15	(4)
Kamsarmax	2012	82,000	South Korea	$	15,500	23-Jul-17	(5)
Kamsarmax	2011	81,500	South Korea	$	15,000	15-Jan-16	(6)
Panamax	2004	77,500	China	$	14,000	03-Jan-17	(7)
Panamax	2014	76,000	China	See Note (8)		19-Jun-15	(8)
Ultramax	2010	61,000	Japan	$	14,200	01-Apr-17	(9)
Supramax	2010	58,000	China	$	14,250	12-Dec-15	(10)
Supramax	2008	58,000	China	$	12,250	13-Jun-16	(11)
Supramax	2015	55,000	Japan	$	14,000	27-Jan-18	(12)
Handymax	2002	48,500	Japan	$	12,000	31-Jan-17	(13)
Aggregate Time Chartered-in DWT		964,700

(1) This vessel has been time chartered-in for 21 to 25 months, with such term to be determined at the Company’s option at $13,000 per day. The Company has the option to extend this time charter for one year at $14,000 per day. The vessel was delivered February 22, 2015.

(2) This vessel has been time chartered-in for ten to 14 months, with such term to be determined at the Company’s option at a rate of 90% of the Baltic Panamax 4TC Index. The Company has the option to extend this time charter for an additional ten to 14 months at the same rate of hire. The vessel was delivered on July 9, 2014.

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(3) This vessel has been time chartered-in for 11 to 13 months, with such term to be determined at the Company’s option at $9,500 per day. The Company has the option to extend this time charter for one year at $11,500 per day. The vessel was delivered on September 11, 2014.

(4) This vessel has been time chartered-in for 11 to 14 months, with such term to be determined at the Company’s option $12,000 per day. The Company has the option to extend this time charter for one year. The vessel was delivered on August 22, 2014.

(5) This vessel has been time chartered-in for 39 to 44 months, with such term to be determined at the Company’s option at $15,500 per day. The Company has the option to extend this time charter for one year at $16,300 per day. The vessel was delivered on April 23, 2014.

(6) This vessel has been time chartered-in for 23 to 28 months, with such term to be determined at the Company’s option at $15,000 per day. The Company has the option to extend the charter for an additional 11 to 13 months at $16,000 per day. The vessel was delivered on February 15, 2014.

(7) This vessel has been time chartered-in for 32 to 38 months, with such term to be determined at the Company’s option at $14,000 per day. The vessel was delivered on May 3, 2014.

(8) This vessel has been time chartered-in for ten to 13 months, with such term to be determined at the Company’s option at $5,000 per day for the first 40 days and $10,000 per day thereafter. The Company has the option to extend the charter for an additional year. The vessel was delivered on August 10, 2014.

(9) This vessel has been time chartered-in for three years at $14,200 per day. The Company has options to extend the charter for up to three consecutive one year periods at $15,200 per day, $16,200 per day and $17,200 per day, respectively. The vessel was delivered on April 13, 2014.

(10) This vessel has been time chartered-in for 20 to 24 months, with such term to be determined at the Company’s option at $14,250 per day. The Company has the option to extend the charter for an additional ten to 12 months at $14,850 per day. The vessel was delivered on April 12, 2014.

(11) This vessel has been time chartered-in for 21 to 25 months, with such term to be determined at the Company’s option at $12,250 per day. The Company has the option to extend this time charter for one year at $13,000 per day. The vessel was delivered on September 13, 2014.

(12) This vessel has been time chartered-in for three years at $14,000 per day. The Company has options to extend the charter for up to two consecutive one year periods at $15,000 per day and $16,000 per day, respectively. The vessel was delivered on January 27, 2015.

(13) This vessel has been time chartered-in for 34 to 37 months, with such term to be determined at the Company’s option at $12,000 per day. The Company has options to extend the charter for up to three consecutive one year periods at $12,750 per day, $13,600 per day and $14,800 per day, respectively. The vessel was delivered on March 31, 2014.    

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Newbuilding Program

Drybulk Vessels Under Construction

Capesize Vessels
	Vessel Name	Expected Delivery	DWT	Shipyard
1	Hull H1310 - TBN SBI Valrico	Q3-15	180,000	Waigaoqiao
2	Hull H1311 - TBN SBI Maduro	Q4-15	180,000	Waigaoqiao
3	Hull H1364 - TBN SBI Belicoso	Q3-15	180,000	Waigaoqiao
4	Hull H1365 - TBN SBI Corona	Q1-16	180,000	Waigaoqiao
5	Hull H1366 - TBN SBI Diadema	Q1-16	180,000	Waigaoqiao
6	Hull H1367 - TBN SBI Estupendo	Q2-16	180,000	Waigaoqiao
7	Hull S1205 - TBN SBI Camacho	Q2-15	180,000	Sungdong
8	Hull S1206 - TBN SBI Montesino	Q2-15	180,000	Sungdong
9	Hull S1211 - TBN SBI Magnum	Q2-15	180,000	Sungdong
10	Hull S1212 - TBN SBI Montecristo	Q3-15	180,000	Sungdong
11	Hull S1213 - TBN SBI Aroma	Q3-15	180,000	Sungdong
12	Hull S1214 - TBN SBI Cohiba	Q4-15	180,000	Sungdong
13	Hull S1215 - TBN SBI Habano	Q1-16	180,000	Sungdong
14	Hull H1059 - TBN SBI Churchill	Q4-15	180,000	Daewoo
15	Hull H1060 - TBN SBI Perfecto	Q1-16	180,000	Daewoo
16	Hull H1061 - TBN SBI Presidente	Q2-16	180,000	Daewoo
17	Hull HN1058 - TBN SBI Behike	Q4-15	180,000	Daehan
18	Hull HN1059 - TBN SBI Monterrey	Q4-15	180,000	Daehan
	Aggregate Capesize Newbuilding DWT		3,240,000

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Kamsarmax Vessels
	Vessel Name	Expected Delivery	DWT	Shipyard
1	Hull S1681 - TBN SBI Rumba	Q3-15	84,000	Imabari
2	Hull 1090 - TBN SBI Electra	Q3-15	82,000	Yangzijiang
3	Hull 1091 - TBN SBI Flamenco	Q3-15	82,000	Yangzijiang
4	Hull 1092 - TBN SBI Rock	Q4-15	82,000	Yangzijiang
5	Hull 1093 - TBN SBI Twist	Q1-16	82,000	Yangzijiang
6	Hull SS179 - TBN SBI Merengue	Q1-16	81,600	Tsuneishi
7	Hull S1228 - TBN SBI Capoeira	Q2-15	82,000	Hudong
8	Hull S1722A - TBN SBI Conga	Q2-15	82,000	Hudong
9	Hull S1723A - TBN SBI Bolero	Q3-15	82,000	Hudong
10	Hull S1229 - TBN SBI Carioca	Q3-15	82,000	Hudong
11	Hull S1724A - TBN SBI Sousta	Q3-15	82,000	Hudong
12	Hull S1725A - TBN SBI Reggae	Q4-15	82,000	Hudong
13	Hull S1726A - TBN SBI Zumba	Q1-16	82,000	Hudong
14	Hull S1231 - TBN SBI Macarena	Q1-16	82,000	Hudong
15	Hull S1735A - TBN SBI Parapara	Q2-16	82,000	Hudong
16	Hull S1736A - TBN SBI Mazurka	Q2-16	82,000	Hudong
17	Hull S1230 - TBN SBI Lambada	Q3-15	82,000	Hudong
18	Hull S1232 - TBN SBI Swing	Q2-16	82,000	Hudong
19	Hull S1233 - TBN SBI Jive	Q3-16	82,000	Hudong
	Aggregate Kamsarmax Newbuilding DWT		1,559,600

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Ultramax Vessels
	Vessel Name	Expected Delivery	DWT	Shipyard
1	Hull 1907 - TBN SBI Hera	Q2-16	60,200	Mitsui
2	Hull 1906 - TBN SBI Zeus	Q2-16	60,200	Mitsui
3	Hull 1911 - TBN SBI Poseidon	Q2-16	60,200	Mitsui
4	Hull 1912 - TBN SBI Apollo	Q2-16	60,200	Mitsui
5	Hull S870 - TBN SBI Echo	Q3-15	61,000	Imabari
6	Hull S871 - TBN SBI Tango	Q3-15	61,000	Imabari
7	Hull S-A098 - TBN SBI Achilles	Q4-15	61,000	Imabari
8	Hull S-A089 - TBN SBI Cronos	Q4-15	61,000	Imabari
9	Hull S-A090 - TBN SBI Hermes	Q1-16	61,000	Imabari
10	Hull NE182 - TBN SBI Maia	Q3-15	61,000	Nacks
11	Hull NE183 - TBN SBI Hydra	Q3-15	61,000	Nacks
12	Hull NE194 - TBN SBI Hyperion	Q2-16	61,000	Nacks
13	Hull NE195 - TBN SBI Tethys	Q2-16	61,000	Nacks
14	Hull DE019 - TBN SBI Lyra	Q2-15	61,000	Dacks
15	Hull DE020 - TBN SBI Subaru	Q2-15	61,000	Dacks
16	Hull DE021 - TBN SBI Ursa	Q3-15	61,000	Dacks
17	Hull CX0651 - TBN SBI Pegasus	Q3-15	64,000	Dacks
18	Hull CX0652 - TBN SBI Orion	Q4-15	64,000	Chengxi
19	Hull CX0612 - TBN SBI Thalia	Q4-15	64,000	Chengxi
20	Hull CX0653 - TBN SBI Hercules	Q4-15	64,000	Chengxi
21	Hull CX0627 - TBN SBI Perseus	Q1-16	64,000	Chengxi
22	Hull CX0654 - TBN SBI Kratos	Q1-16	64,000	Chengxi
23	Hull CX0655 - TBN SBI Samson	Q2-16	64,000	Chengxi
24	Hull CX0613 - TBN SBI Phoebe	Q3-16	64,000	Chengxi
25	Hull CX0656 - TBN SBI Phoenix	Q3-16	64,000	Chengxi
	Aggregate Ultramax Newbuilding DWT		1,548,800
	AGGREGATE DRYBULK		6,348,400

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Product Tankers and Kamsarmax Vessel Under Construction - To Be Sold

	Vessel Name	Expected Delivery (1)	DWT	Shipyard
1	Hull S3120 - TBN SBI Parejo (2)	Q3-16	115,000	Sungdong
2	Hull S3121 - TBN SBI Tuscamina (2)	Q3-16	115,000	Sungdong
3	Hull H5023 - TBN SBI Panatela (2)	Q4-16	112,000	Daewoo
4	Hull H5024 - TBN SBI Robusto (2)	Q1-17	112,000	Daewoo
5	Hull H.5003 - TBN SBI Macanudo (2)	Q1-16	115,000	Daehan
6	Hull H.5004 - TBN SBI Cuaba (2)	Q2-16	115,000	Daehan
	Total LR2 Newbuilding DWT		684,000
1	Hull S3122 - TBN SBI Lonsdale (2)	Q2-17	74,500	Sungdong
2	Hull S3123 - TBN SBI Partagas (2)	Q2-17	74,500	Sungdong
3	Hull S3124 - TBN SBI Toro (2)	Q3-17	74,500	Sungdong
	Total LR1 Newbuilding DWT		223,500
1	Hull SS164 – TBN SBI Salsa(2)	Q3-15	81,000	Tsuneishi
	Total Kamsarmax DWT		81,000
	Aggregate Product Tankers and Kamsarmax Vessel Newbuilding DWT		988,500

(1) Expected delivery date relates to quarter during which each vessel is currently expected to be delivered from the shipyard.

(2) Vessel held for sale.

Employment of Our Fleet

Generally, we intend to operate our vessels in spot market-oriented commercial pools, in the spot market or, under certain circumstances, on time charters.

Spot Market-Oriented Commercial Pools

To increase vessel utilization and thereby revenues, we participate in commercial pools with other shipowners with similar modern, well-maintained vessels. By operating a large number of vessels as an integrated transportation system, commercial pools offer customers greater flexibility and a higher level of service while achieving scheduling efficiencies. Pools employ experienced commercial managers and operators who have close working relationships with customers and brokers, while technical management is performed by each shipowner. The managers of the pools negotiate charters with customers primarily in the spot market. The size and scope of these pools enable them to enhance vessel utilization rates for pool vessels by securing backhaul voyages, which is when cargo is transported on the return leg of a journey, and contracts of affreightment, or COAs, thus generating higher effective TCE revenues than otherwise might be obtainable in the spot market, while providing a higher level of service offerings to customers.

All of our chartered-in vessels and owned vessels, other than one Capesize vessel which is currently on time charter until November 23, 2015, are employed in a spot market-oriented commercial pool managed by our commercial manager, or a Scorpio Group Pool, which exposes us to fluctuations in spot market charter rates. In addition, we expect that each of the drybulk vessels in our Newbuilding Program, following their delivery to us, will initially be employed in a Scorpio Group Pool. The Scorpio Group Pools have been newly formed or will be formed prior to the delivery of the vessels in our Newbuilding Program and have limited to no operating history. Our vessels are expected to participate in the Scorpio Group Pools under the same contractual terms and conditions as the third party vessels in the pool. Each pool will aggregate the revenues and expenses of all of the pool participants and distribute the net earnings calculated on (i) the number of pool points for the vessel, which are based on vessel attributes such as cargo carrying capacity, fuel consumption, and construction characteristics, and (ii) the number of days the vessel operates in the period. SCM, a Monaco corporation controlled by the Lolli-Ghetti family of which our co-founder, Chairman and Chief Executive Officer is a member, is or will be responsible for the administration of the pool and the commercial

management of the participating vessels, including marketing the pool, negotiating charters, including voyage charters, short duration time charters and COAs, conducting pool operations, including the distribution of pool cash earnings, and managing bunker (fuel oil) purchases, port charges and administrative services for the vessels. SCM, as operator of the Scorpio Group Pools,

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charges $300 a day for each vessel, whether owned by us or chartered-in, plus a 1.75% commission on the gross revenues per charter fixture, which commission has been temporarily reduced. See “-Management of our Business” below.

The pool participants will remain responsible for all other costs including the financing, insurance, manning and technical management of their vessels. The earnings of all of the vessels will be aggregated and divided according to the relative performance capabilities of the vessel and the actual earning days each vessel is available.

Spot Market

A spot market voyage charter is generally a contract to carry a specific cargo from a load port to a discharge port for an agreed freight per ton of cargo or a specified total amount. Under spot market voyage charters, we pay specific voyage expenses such as port, canal and bunker costs. Spot charter rates are volatile and fluctuate on a seasonal and year-to-year basis.

Fluctuations derive from imbalances in the availability of cargoes for shipment and the number of vessels available at any given time to transport these cargoes. Vessels operating in the spot market generate revenue that is less predictable, but may enable us to capture increased profit margins during periods of improvements in drybulk vessel charter rates.

Time Charters

Time charters give us a fixed and stable cash flow for a known period of time. Time charters also mitigate in part the seasonality of the spot market business, which is generally weaker in the second and third quarters of the year. We currently employ one vessel on time charter, and in the future, we may opportunistically look to employ additional vessels under time charter contracts should rates become more attractive. We may also enter into time charter contracts with profit sharing agreements, which enable us to benefit when the spot market rates increase.

Management of Our Business

Commercial and Technical Management

Our vessels are commercially managed by SCM and technically managed by SSM pursuant to a Master Agreement, which may be terminated by either party upon 24 months notice. SCM and SSM are companies affiliated with us. The vessels we charter-in are also commercially managed by SCM. We expect that additional vessels that we may acquire in the future, including the drybulk vessels in our Newbuilding Program, will also be managed under the Master Agreement or on substantially similar terms.

SCM’s services include securing employment for our vessels in the spot market and on time charters. SCM also manages the Scorpio Group Pools in which our vessels are, or are expected to be, employed. For commercial management of any of our vessels that does not operate in one of these pools, we pay SCM a daily fee of $300 per vessel, plus a 1.75% commission on the gross revenues per charter fixture. The Scorpio Group Pool participants, including us and third-party owners of similar vessels, are each expected to pay SCM a pool management fee of $300 per vessel per day, plus a 1.75% commission on the gross revenues per charter fixture. Effective November 20, 2014, SCM has agreed to reduce the 1.75% commission to 1.00% until the first day on which the closing price of our common shares is not less than $9.75 per share, adjusted to include all authorized dividends paid on our share capital.

SSM’s services include providing technical support, such as arranging the hiring of qualified officers and crew, supervising the maintenance and performance of vessels, purchasing supplies, spare parts and new equipment, arranging and supervising drydocking and repairs, and monitoring regulatory and classification society compliance and customer standards. We will pay SSM an annual fee of $200,000 per vessel to provide technical management services for each of the drybulk vessels in our Newbuilding Program upon delivery. In addition, representatives of SSM, including certain subcontractors, provide us with construction supervisory services while our vessels are being constructed in shipyards. For these services, we compensate SSM for its direct expenses, which can vary between $200,000 and $500,000 per vessel. Please see “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Commercial and Technical Management Agreements” for additional information.

Administrative Services Agreement

We have entered into an Administrative Services Agreement with SSH for the provision of administrative staff, office space and accounting, legal compliance, financial and information technology services. SSH is a company affiliated with us. The services provided to us by SSH may be sub-contracted to other entities within the Scorpio Group. Pursuant to the Administrative Services Agreement, we reimburse SSH for the reasonable direct or indirect expenses it incurs in providing us with the administrative

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services described above and a pro-rata portion of the salary incurred by SSH for an internal auditor. We also pay SSH a fee for arranging vessel acquisitions, including newbuildings, which is payable in our common shares. The amount of common shares payable is determined by dividing $250,000 by the market value of our common shares based on the volume weighted average price of our common shares over the 30 trading day period immediately preceding the contract date of a definitive agreement to acquire any vessel. In November 2014, SSH has agreed to waive its fee on vessel acquisitions contracted after November 20, 2014, until the first day on which the closing price of our common shares is not less than $9.75 per share, adjusted to include all authorized dividends paid on our share capital. As of the date of this annual report, we issued an aggregate of 223,638 common shares to SSH in connection with the deliveries of eight of our newbuilding vessels, and expect to issue an additional 1,945,103 common shares to SSH throughout the deliveries of the remaining vessels in our Newbuilding Program

SSH has agreed with us not to own any drybulk carriers greater than 30,000 dwt for so long as the Administrative Services Agreement is in full force and effect. This agreement may be terminated by SSH after the third anniversary of our initial public offering upon 12 months’ prior written notice.

Recent and Other Developments

Newbuilding Vessels

During the period from January 1, 2015 through March 30, 2015, we took delivery of the following newbuilding vessels:

• SBI Bravo, an Ultramax vessel, was delivered from Nacks on January 7, 2015 and commenced operations in the Ultramax Pool.

• SBI Athena, an Ultramax vessel, was delivered from Chengxi on January 9, 2015 and commenced operations in the Ultramax Pool.

• SBI Samba, a Kamsarmax vessel, was delivered from Imabari on January 23, 2015 and commenced operations in the Kamsarmax Pool.

• SBI Antares, an Ultramax vessel, was delivered from Nacks on January 30, 2015 and commenced operations in the Ultramax Pool.

• SBI Puro, a Capesize vessel, was delivered from Waigaoqiao on February 6, 2015 and commenced employment under a time charter to a major European charterer for a term of ten to 13 months at a rate of $13,800 per day.

• SBI Leo, an Ultramax vessel, was delivered from Dacks on February 16, 2015 and commenced operations in the Ultramax Pool.

On March 4, 2015, we finalized agreements with a shipyard in South Korea to modify existing newbuilding contracts for three of our Capesize vessels. The three contracts will now provide for the construction of three LR1 product tankers, two of which are scheduled for delivery during the second quarter of 2017 and one during the third quarter of 2017. As a result of these agreements, we expect to incur a loss of approximately $23 million relating to writing down the contracts to their estimated fair market value. Also, upon completion of customary documentation, the LR1 contracts will be re-classified on our balance sheet as assets held for sale.

Chartered-in Vessels

As of March 30, 2015, we agreed to time charter-in 13 drybulk vessels, consisting of three Kamsarmax vessels, two Panamax vessels, and three Post-Panamax vessels, one Ultramax vessel, three Supramax vessels and one Handymax vessel. Please see “—Our Fleet” above for information on these vessels.

Credit Facilities

$240.3 Million Senior Secured Credit Facility 

On January 15, 2015, we entered into a $411.3 million senior secured credit facility with a group of financial institutions, which was subsequently reduced on March 26, 2015 by $171.0 million to $240.3 million due to the removal from financing under this facility of five Capesize newbuilding vessels that we have agreed to convert into product tankers. The proceeds of this facility are expected to finance a portion of the purchase price of seven Capesize vessels in our Newbuilding Program under construction at Sungdong. This facility is secured by, among other things, a first preferred mortgage on the seven Capesize newbuilding vessels and guaranteed by each of the collateral vessel owning subsidiaries. Portions of this facility bear interest at LIBOR plus an applicable margin of between 1.90% and 2.95% and a portion has a fixed coupon of 6.25%. The facility matures six years from the delivery of the final vessel securing the facility, and in certain circumstances, this facility matures 12 years after the delivery of each financed

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vessel. The terms and conditions of the facility, including covenants, are similar to those in our existing credit facilities and customary for financings of this type.

$42.0 Million Senior Secured Credit Facility

On January 30, 2015, we entered into a $42.0 million credit facility with a leading European financial institution. The proceeds of this facility are expected to finance a portion of the purchase price of two Kamsarmax vessels in our Newbuilding Program (of which one Kamsarmax vessel was delivered in January 2015 to us from Imabari and one Kamsarmax vessel is under construction at Imabari). The facility may be drawn in two tranches, each of which has a final maturity of six years from the date of the respective vessel delivery from the yard. This facility bears interest at LIBOR plus a margin of 2.80%. This facility is secured by, among other things, a first preferred mortgage on the two Kamsarmax newbuilding vessels and guaranteed by each of the collateral vessel owning subsidiaries. The terms and conditions of the facility, including covenants, are similar to those in our existing credit facilities and customary for financings of this type.

$26.0 Million Senior Secured Credit Facility

On February 27, 2015, we entered into a $26.0 million senior secured credit facility with ABN AMRO Bank N.V., the Netherlands. The proceeds of this facility were used to finance a portion of the purchase price of one Capesize vessel, which was delivered to us during the first quarter of 2015. This facility matures at the earlier of (a) the date falling six months after the drawdown date; and (b) the date ten business days after the date on which the Chinese Ministry of Finance has approved insurance coverage to be provided by the China Export & Credit Insurance Corporation, or Sinosure, with respect to our $230.3 Million Credit Facility (discussed below) and drawings can be made under such facility. This facility bears interest at LIBOR plus an initial margin of 2.00%, with monthly step ups of 0.25% in margin until a margin of 3.25% is reached. This facility is secured by, among other things, a first preferred mortgage on the Capesize newbuilding vessel and guaranteed by the collateral vessel owning subsidiary. The terms and conditions of the facility, including covenants, are similar to those in our existing credit facilities and customary for financings of this type.

$19.8 Million Senior Secured Credit Facility

On March 2, 2015, we entered into a senior secured credit facility for up to $19.8 million. The facility was previously announced as a $39.6 million credit facility, that has now been reduced to a size of $19.8 million due to the removal of the financing on one Kamsarmax vessel which we have classified as held for sale. The facility was arranged by ABN AMRO Bank N.V., the Netherlands, with insurance cover provided from Sinosure. The facility is expected to be used to finance a portion of the purchase price of one Kamsarmax vessel currently under construction at Tsuneishi with expected delivery during the first quarter of 2016. The facility matures ten years from the date of delivery of the vessel and bears interest at LIBOR plus a margin of 2.50%. This facility is secured by, among other things, a first priority mortgage one Kamsarmax newbuilding vessel and guaranteed by the collateral vessel owning subsidiary. The terms and conditions of the facility, including covenants, are similar to those in our existing credit facilities and customary for financings of this type.

$230.3 Million Senior Secured Credit Facility

On March 2, 2015, we received a commitment from ABN AMRO Bank N.V. and The Export-Import Bank of China, for a loan facility of up to $230.3 million. This commitment finalizes a previously announced memorandum of understanding for a $234.9 million credit facility. This facility was arranged by ABN AMRO Bank N.V., the Netherlands, with insurance cover to be provided from Sinosure. The proceeds of this facility are expected to be used to finance a portion of the purchase price of seven Capesize vessels (of which one vessel was delivered to us in February 2015 from Waigaoqiao and six vessels are currently under construction at Waigaoqiao with expected deliveries between the third quarter of 2015 and the second quarter of 2016). The terms and conditions of this facility, including covenants, will be similar to those in our existing credit facilities and customary for financings of this type. This facility is subject to customary conditions precedent and the execution of definitive documentation. The creditfacility is pending approval from the Chinese Ministry of Finance on the insurance coverage to be provided by Sinosure.

For additional information regarding our credit facilities and other debt arrangements, please see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Credit Facilities and Unsecured Notes.”

Our Customers

We believe that developing strong relationships with the end users of our services allow us to better satisfy their needs with appropriate and capable vessels. A prospective charterer’s financial condition, creditworthiness, and reliability track record are important factors in negotiating our vessels’ employment.

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Seasonality

We operate our vessels in markets that have historically exhibited seasonal variations in demand and, as a result, in charter hire rates. This seasonality may result in quarter to quarter volatility in our operating results, which could affect the amount of dividends that we pay to our shareholders from quarter to quarter. The drybulk carrier market is typically stronger in the fall and winter months in anticipation of increased consumption of coal and other raw materials in the northern hemisphere during the winter months. In addition, unpredictable weather patterns in these months tend to disrupt vessel scheduling and supplies of certain commodities. As a result, revenues of drybulk carrier operators in general have historically been weaker during the fiscal quarters ended June 30 and September 30, and, conversely, been stronger in fiscal quarters ended December 31 and March 31. This seasonality may materially affect our operating results and cash available for dividends.

Competition

We operate in markets that are highly competitive and based primarily on supply and demand. We compete for charters on the basis of price, vessel location, size, age and condition of the vessel, as well as on our reputation and that of our commercial manager. We compete primarily with other independent and state-owned drybulk vessel-owners. Our competitors may have more resources than us and may operate vessels that are newer, and therefore more attractive to charterers, than our vessels. Ownership of drybulk vessels is highly fragmented and is divided among publicly listed companies, state-controlled owners and private shipowners.

Industry and Market Conditions

The Drybulk Shipping Industry

Except as otherwise indicated, the statistical information and industry and market data contained in this section is based on or derived from statistical information and industry and market data collated and prepared by SSY Consultancy & Research Ltd., or SSY. The data is based on SSY's review of such statistical information and market data available at the time (including internal surveys and sources, independent financial information, independent external industry publications, reports or other publicly available information). Due to the incomplete nature of the statistical information and market data available, SSY has had to make some estimates where necessary when preparing the data. The data is subject to change and may differ from similar assessments obtained from other analysts of shipping markets. While reasonable care has been taken in the preparation of the data, SSY has not undertaken any independent verification of the information and market data obtained from published sources.

Industry Overview

Drybulk shipping mainly comprises the shipment of minerals (such as iron ore and coal), other industrial raw materials and various agricultural products. Of these, the major cargoes are iron ore, coal and grain. The remaining minor bulk cargoes include steel products, bauxite/alumina, nickel ore, cement, petroleum coke, forest products, fertilizers and non-grain agricultural products, such as sugar.

Charterers in the drybulk shipping industry range from cargo owners (such as mining companies and grain houses) to end-users (such as steel producers and power utilities) and also include a number of different trading companies and ship operators.

In 2014 total international seaborne drybulk trade reached an estimated new annual record of 4.15 billion tonnes. This was up by an estimated 4.6% since 2013 and by an estimated 39.4% since 2009 levels. With the exception of 2009 when the global economy was in recession, seaborne drybulk trade has recorded positive annual growth in every year since 1998. While the 2014 trade estimates will be subject to revision as final trade statistics become available, estimates outlined in the table below indicate that last year’s increase in seaborne trade was unevenly distributed between the various cargo types and below the compound annual average growth rate, or CAGR, for the five years to 2014.

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World Seaborne Drybulk Trade

(million tonnes)

Cargo/Year	2009	2010	2011	2012	2013	2014	2009-14% Growth	CAGR
Major Bulks	2109	2326	2464	2607	2805	2981	41%	7%
Iron Ore	939	1036	1107	1138	1240	1379	47%	8%
Coal	849	958	1020	1117	1197	1179	39%	7%
Grains	321	332	338	353	369	426	33%	6%
Minor Bulks	868	985	1063	1105	1163	1166	34%	6%
Total	2977	3311	3527	3713	3968	4152	39%	7%

Totals may not add due to rounding

Cargo Types

Iron ore: Iron is the key raw material for steelmaking, and iron ore trade has surged in recent years on the back of unprecedented Chinese import demand to be the single largest seaborne drybulk cargo, totaling an estimated 1,379 million tonnes, or Mt, in 2014. Although world steel production and, therefore, iron ore demand growth softened in the second half of 2014, annual seaborne iron ore trade in 2014 was still up by an estimated 11.2% on the 2013 total, 47% higher than in 2009 and 130% above the corresponding total in 2004. In addition to China, which as described elsewhere in this section has become the dominant importer accounting for approximately two-thirds of seaborne imports in 2014, the main import markets for iron ore are Japan, Western Europe and South Korea. Exports are dominated by Australia and Brazil, which together account for close to 80% of the seaborne market with a large majority of their cargoes carried by Capesize vessels given the favorable unit economies. This market share has increased from less than 70% in 2009, chiefly through the introduction of additional Australian export capacity. Other iron ore exporters include Canada, India, South Africa and West Africa.

Coal: At an estimated 1,179 Mt in 2014, global seaborne coal trade was down by 1.5% from its 2013 record, contrasting with a CAGR of 7% for the five-year period from 2009 to 2014. Coal trade is comprised of two main categories: (1) steam coal (which is chiefly used for electricity generation, but also by industrial users, such as the cement industry) and (2) coking coal (a key input for blast furnace steelmaking). Traditionally dominated by import demand from Japan and Western Europe, the past five years have seen China and India emerge as key importers. The leading exporter of coking coal is Australia, followed by the United States and Canada.

Indonesia is the largest exporter of steam coal, ahead of Australia, the former Soviet Union, Colombia, South Africa and the United States. Between 2004 and 2013 China was transformed from one of the world’s major steam coal exporting nations to the single largest importer, such was the strength of the country’s domestic demand for power generation. Last year, however, China recorded its first annual fall in steam coal imports since 2008, against the background of an oversupplied domestic coal market. Indian imports have grown rapidly during the past five to ten years to surpass those of Taiwan, South Korea and Japan. Western Europe remains a major import market, while Latin America has grown in importance as a coal import generator. Although investments in new port facilities have enabled the participation of Capesize vessels in the Asia-led coal trade growth in recent years, it has chiefly benefited demand for Panamax and Handymax type vessels.

Grains: Seaborne grain trade is comprised of wheat, coarse grains (corn, barley, oats, rye and sorghum) and soyabeans/meal, which together totaled an estimated new record of 426 Mt in 2014. This was up by 15.5% on 2013 and well above the CAGR of 6% for 2009 to 2014. In addition, the grain trades remain an important source of freight market volatility due to both the seasonality of export flows and year-on-year variations in crop surpluses and deficits. For example, improved harvests in the United States and Black Sea region were key to last year’s growth in world grain trade.

Soyais the largest of the three main categories of grain trade with the United States, Brazil and Argentina as the leading export countries. The principal markets are in Europe and Far East Asia, and China is the world’s single largest soyabean importer. Shipments are dominated by Panamax and Handymax vessels. Wheat and coarse grains are also primarily carried by mid-size vessels with the United States, Canada, Russia, Ukraine, Argentina, Australia and the European Union the main exporting regions. In addition to Far East Asia and Europe, the Middle East, Africa and Latin America are all significant import markets.

Minor Bulks: A diversity of cargo types are covered under this heading with different sets of demand drivers. Nevertheless, together at more than 1.1 billion tonnes per annum these trades represent a major source of employment for the smaller Handysize

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and Handymax vessels. Several minor bulk cargoes, including steel products and cement suffered an especially severe decline in trade volumes during the global financial crisis. The subsequent recovery in overall minor bulk trade volumes to an estimated all-time high in 2013 was shaped by some different drivers than during the pre-2008 period with a greater emphasis on Chinese imports of industrial raw materials, such as bauxite and nickel ore.

A key development for the minor bulk trades in 2014 was the implementation of export restrictions on unprocessed mineral ores by the Indonesian government in January, which effectively banned the country’s exports of bauxite and nickel ore. Since totaling a combined 121 Mt in 2013 and 6.4 Mt in January 2014, Indonesian exports of these two cargoes have been zero. The absence of Indonesian supplies, together with limited alternative cargoes from other sources, was a major restraint on last year’s minor bulk trade. In contrast, there was a positive contribution from steel products, of which the combined annual exports from China, Japan, South Korea, Brazil and the European Union were an estimated 21% higher than in 2013. The estimated CAGR for minor bulk trade volumes for the period from 2009 to 2014 was 3%.

Demand for Drybulk Shipping

Drybulk trade is a function of levels of (1) economic activity, (2) the industrialization/urbanization of developing countries, (3) population growth (plus changes in dietary habits) and (4) regional shifts in cargo supply/demand balances (for example, due to the development of new export/import capacity or depletion/development of mineral reserves). The distances shipped chiefly reflect regional commodity surpluses and deficits. Generally, the more concentrated the sources of cargo supply, the greater the average distance shipped.

Ship demand is determined by the overall volumes of cargo moved and the distance that these are shipped (that is, tonne-mile demand), as well as changes in vessel efficiency. These changes may be caused by such factors as (1) vessel speed (in the high fuel cost/low freight rate environment of recent years, there has been an incentive for shipowners to reduce speed and so lower fuel consumption); (2) port delays (which have been a common occurrence in the last ten to 12 years as inland and port logistics in several key export areas have struggled to meet surging global demand) and (3) laden to ballast ratios (that is, how much time vessels spend sailing empty on re-positioning voyages; ballasting has also been on the increase over the last ten years due to the widening imbalance in cargo flows between the Atlantic and Pacific Basins).

World seaborne drybulk trade followed a steady underlying upward trend during the 1980s and 1990s. The CAGR for the major drybulk cargoes over this period was an estimated 2.5%, before accelerating sharply to 6.3% during 2000 to 2009 and to an estimated 7.2% between 2010 and 2014.

Both the growth in drybulk trade volumes since the global financial crisis of 2008-2009, and the preceding acceleration in the underlying rate of expansion in cargo movements, were primarily due to the rapid industrialization and urbanization of China. From approximately 130 Mt in 2000, Chinese drybulk imports had increased more than ten-fold by 2014, as illustrated in the accompanying chart. This expansion has been facilitated by investments in new mining and port facilities in key exporting areas around the world in response to Chinese-driven rises in commodity prices from 2004 to 2011 and 2012.

The table below provides a more detailed comparison of China’s drybulk imports between 2009 and 2014. It confirms iron ore’s role as the leading source of growth during this five-year period. This reflects not only increases in domestic steel production (and, therefore, iron ore consumption) to meet the needs of an industrializing and urbanizing economy, but also the substitution of higher-quality imported iron ore for lower-quality domestic supplies. This growth has mainly been to the benefit of Capesize vessels, hauling cargoes from West Australia and Brazil.

The table also highlights high rates of growth across a range of other cargoes, such as coal, grains and some of the key minor bulks. Indonesia and Australia are the primary sources of Chinese coal imports, while in the grain trades increased Chinese demand for soya beans from Latin America and the United States has boosted tonne-mile demand for Panamax and Supramax vessels.

Indonesia had been the dominant supplier of bauxite and nickel ore to China until January 2014’s export restrictions. With Chinese buyers struggling to find alternative supplies from elsewhere while drawing on inventories accumulated over the course of 2013, the country’s total imports of both bauxite and nickel ore fell to 41.8 Mt in 2014 from 75.4 Mt the previous year.

Customs data for the first two months of 2015 show a year-on-year decline in China’s drybulk imports of 14.5%, chiefly due to lower volumes of coal, bauxite and nickel ore. A more modest 1.1% decline in iron ore imports has accompanied a reported contraction in China’s crude steel production.

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Chinese Drybulk Imports (Million Tonnes)

	2009	2014	CAGR
Iron Ore	628.2	932.9	+8%
Steel Products	22.2	14.6	-8%
Coal*	144.9	291.4	+15%
Bauxite/alumina	24.9	41.8	+11%
Grains	48.6	90.6	+13%
Fertilizer	4.1	9.6	+19%
Other**	72.3	122.5	+11%
Total of above	945.2	1,503.4	+10%

* Includes lignite ** Includes mineral ores (such as nickel), pulp/woodchip and petroleum coke. Source: Chinese Customs

Outside of China, most of the additional growth in drybulk cargo import demand during the past five years has been generated by other Asian economies. For example, Indian coal imports are estimated to have risen from 87 Mt in 2009 to 223 Mt in 2014, reflecting the strength of demand from electricity generators and the cement and steel industries. Although India has added several Capesize coal import terminals in recent years, a majority of the coal cargoes arriving in the country are shipped by Supramax, Panamax and Kamsarmax vessels. More established Asian import markets, such as Japan and South Korea, have also contributed to the region’s import growth. Japan’s imports of coal and iron ore increased by 57 Mt between 2009 and 2014 and Korea’s by 59 Mt over the same period.

In contrast, European mineral imports have staged only a partial recovery from their cyclical lows in 2009 and have remained below their 2007 totals, partly due to the ongoing financial crisis in the eurozone. Consequently, Far East Asia’s share of world seaborne major bulk imports is estimated to have climbed above 75% from approximately 60% in the middle of the last decade and 50-55% in 2000.

As a result, the fastest drybulk trade growth has been seen within the Pacific Basin, which has been supplemented by increases in fronthaul trade from the Atlantic to the Pacific (chiefly iron ore on Capesize vessels and grains on Panamaxes and Supramaxes).

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Fleet

The cargoes outlined above are predominantly carried by dry bulk carriers of more than 10,000 dwt. Dry bulk carriers are single-decked ships that transport dry cargoes in “bulk” form (loose within cargo holds, rather than in bags, crates or on pallets). As of mid-March 2015, the total fleet of 10,000+ dwt drybulk carriers numbered approximately 10,124 vessels of 754.3 million deadweight tonnes, or Mdwt.

This fleet is divided into four principal size segments: Handysize (10,000-39,999 dwt), Handymax (40,000-64,999 dwt), Panamax (65,000-99,999 dwt) and Capesize (100,000+dwt). Aside from size, the main distinction between dry bulk vessel types is whether they are geared (i.e. equipped with cranes for loading/discharge) or gearless. The main characteristics of these four vessel types are summarized below, while the accompanying table summarizes the current structure of the fleet by age and size. It shows that in terms of deadweight capacity, the Capesize sector is the largest with 41.0% of the mid-March 2015 total, followed by Panamaxes at 25.5%, Handymaxes at 22.2% and Handysize at 11.3%.

Handysize (10,000-39,999 dwt): These ships carry the widest range of cargoes of any drybulk size segment and are the most dependent on the minor bulks for employment. They are usually equipped with cargo-handling gear (cranes or derricks) and are widely used on routes to and from draft-restricted ports that a) cannot receive larger ships and b) often lack their own land-based cargo-handling equipment. Many such loading or discharge facilities are located in the developing nations. Due to the limited scale economies that these vessels offer, compared to larger tonnage, many of these ships are extensively employed on intra-regional, shorter-haul trades. Special designs of ship are associated with the carriage of such cargoes as steel products and logs (“open-hatch” and “log-fitted” vessels); while some variants also exist in terms of cargo-handling equipment, such as “grab-fitted” tonnage possessing scoops that facilitate easier unloading of certain cargo types.

Handymax (40,000-64,999 dwt): This segment of the dry bulk carrier fleet contains three distinct sub-categories - the traditional Handymax size (40,000-49,999 dwt), the Supramax size (50,000-59,999 dwt) and the Ultramax size (60,000-64,999 dwt. There are some Ultramax newbuilding designs of above 65,000 dwt, but as these are much fewer in number than existing gearless vessels of 65,000-69,999 dwt, they currently fall in SSY’s Panamax size range.). Despite their increased size, these vessels retain a high degree of trading flexibility as their cargo gear enables them to load and/or discharge at ports with limited facilities. They are more widely deployed on longer-haul routes than Handysizes due to the greater scale economies that they offer. Whereas the traditional Handymax types have gained market share from the sub-40,000 dwt fleet of Handysizes over the past 20 years, the new generation of Supramax and Ultramax vessels are also competing for business on Panamax routes (such as grains from Latin America).

Panamax (65,000-99,999 dwt): The strict definition of a Panamax bulk carrier is a ship able to transit the Panama Canal fully laden. However, in recent years this definition has become blurred as (1) only a minority of the vessels in this size range pass

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through the Panama Canal in any 12-month period and (2) shipyards have developed new designs in anticipation of the Panama Canal’s expanded dimensions from early 2016 onwards. At present, the Panama Canal can accommodate ships of maximum beam (i.e. extreme vessel breadth) of 32.3 meters, maximum length overall (LOA) of 294.1m and maximum draft of 12m tropical fresh water (TFW). Post-enlargement, these limits will increase to 49m beam, 366m LOA and 15.2m TFW draft. For these reasons our fleet definition stretches from 65,000 to 99,999 dwt, encompassing three main sub-types: traditional Panamaxes (70,000 to 79,999 dwt), Kamsarmaxes (82,000 to 83,000 dwt, which are currently the largest bulk carrier to transit the Panama Canal fully laden) and post-Panamaxes (85,000 to 99,999 dwt). The baseload demand for these vessel types is provided by coal and grain cargoes, although they also participate in a number of other trades (including iron ore, bauxite and fertilizers). Only a small minority of vessels in this size range are equipped with cargo gear as most of the ports served have well developed cargo loading or discharge terminals.

Capesize (100,000+ dwt): These ships are almost exclusively deployed on the iron ore and coal trades, which benefit most from their scale economies. There are three main sub-types: small Capes (100,000 to 119,999 dwt), standard Capes (160,000 to 209,999 dwt, which are mainly concentrated between 170,000 dwt and 180,000 dwt, but also include Newcastlemaxes of 200,000 to 209,999 dwt) and Very Large Ore Carriers (220,000 dwt and above).

Drybulk Carrier Fleet by Size/Age (Million Dwt):

As at mid-March 2015

Built/Dwt	10-39,999	40-64,999	65-99,999	100,000+	Total
Pre-1991	10.3	6.8	5.2	5.7	28.0
1991-95	4.1	7.2	10.2	26.9	48.4
1996-00	9.0	14.5	22.1	23.8	69.4
2001-05	8.4	22.6	27.8	30.0	88.8
2006-10	20.7	45.6	42.2	89.6	198.1
2011-15	33.0	70.7	85.0	132.9	321.6
Total Fleet	85.4	167.4	192.4	309.1	754.3
Avg Age	11 Yrs	9 Yrs	8 Yrs	8 Yrs	9 Yrs

Totals may not add due to rounding

Ownership

Unlike other specialist areas of the world shipping fleet, ownership in the dry bulk segment is highly fragmented, with SSY’s database showing approximately 2,000 different owners. The largest 50 owners account for approximately 36% of the fleet in terms of deadweight carrying capacity, but this includes a large number of Chinese-flagged vessels that trade on both domestic and international routes.

While such analysis will tend to understate levels of market concentration, due to the operation of vessel pools and chartered in fleets, the dry bulk segment is sufficiently competitive to ensure that vessel spot market earnings are extremely responsive to fluctuations in the supply/demand balance - both globally and regionally.

Supply of Drybulk Shipping

The supply of dry bulk carriers is fundamentally determined by the delivery of new vessels from the world’s shipbuilding industry and the removal of older vessels, mainly through demolition.

Newbuilding deliveries not only reflect the demand from shipowners for new tonnage but also available shipyard capacity. Following a sharp upswing in demand for new vessels in all of the main sectors of the commercial shipping industry during the last decade and an accompanying rise in shipbuilding prices to record levels in 2007 to 2008, there was a massive China-led expansion in world shipbuilding capacity. In the case of the drybulk sector, annual newbuilding deliveries surged from 24.4 Mdwt in 2008 (and an average of 19.1 Mdwt p.a. in 2000 to 2007 inclusive) to 44.3 Mdwt in 2009, 79.4 Mdwt in 2010 and a peak of 100.0 Mdwt in 2012.

The resulting impact on freight market balances and vessel earnings, as described elsewhere in this section, led to sharply reduced levels of drybulk carrier ordering in 2011 and 2012, which started to be reflected in a slower pace of newbuilding deliveries in 2013 at an estimated 61.6 Mdwt. The slowdown was maintained in 2014, when the annual total for newbuilding deliveries of 47.8 Mdwt was the lowest since 2009.

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There was, however, a revival in drybulk carrier newbuilding investments during 2013, which continued into 2014 and reversed the downward trend in the newbuilding orderbook. These orders were focused on new, more fuel efficient ship designs, where shipyard descriptions offer significantly lower fuel consumption compared with existing vessels through a combination of new technology main engines and refinements of hull forms.

The rising costs of bunker fuels over the period 2004 to 2012 are illustrated in the accompanying chart, which is based on the Supramax vessel specifications used by the Baltic Exchange (that is, 30 tons (380 cst) per day at 14.0 knots laden/ 14.5 knots ballast) and estimated bunker prices in Singapore. This shows an increase at sea, at full speed, from approximately $5,400 per day in 2004 to approximately $20,000 per day in 2012. Reflecting the general decline in world oil prices, there has been a sharp reduction in bunker fuel costs since September 2014 to a 2015 year-to-date average of approximately $8,800 per day in the case of our Supramax example. We would also stress that (1) there is a wide variance in individual vessel fuel consumptions, even within the same size segments, and (2) that, as described earlier in this section, vessels have been operating at slower speeds in order to lower their daily fuel consumption and costs.

The accompanying table summarizes the confirmed drybulk carrier orderbook as of mid-March 2015, by vessel size and scheduled year of delivery. These delivery dates can be subject to delay with actual deliveries in recent years significantly lagging scheduled totals. For example, 2014 deliveries were an estimated 24% below the scheduled total as of January 1, 2014, while the corresponding rate of slippage from scheduled delivery dates in 2013 was approximately 35%. At an estimated 143.2 Mdwt, the total tonnage on order represents approximately 19.0% of the existing fleet. This compares with end-year highs of 56.5% in 2007, 57.2% in 2009 and 67.3% in 2008, as illustrated in the accompanying chart.

Drybulk Carrier Newbuilding Orderbook by Size Range (Million Dwt):

As at mid-March 2015

Delivery	10-39,999	40-64,999	65-99,999	100,000+	Total
2015	7.1	18.5	13.5	23.5	62.5
2016	5.2	16.0	11.6	29.0	61.8
2017	1.4	3.9	4.6	7.9	17.8
2018+	0.1	0.2	0.4	0.5	1.1
Total	13.8	38.6	30.1	60.8	143.2
% of Fleet	16.1%	23.0%	15.6%	19.7%	19.0%

Totals may not add due to rounding

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Typically drybulk carriers are scrapped between the ages of 25 and 30 years, but the removal of vessels of 20 to 24 years is common during periods of freight market weakness (especially in the larger sizes). In 2014, the average age of vessels scrapped was 29 years for Handysize vessels, 27 years for Handymax vessels, 24 years for Panamax vessels and 25 years for Capesize vessels. During the first quarter of 2015, the corresponding averages were 28 years for Handysizes and Handymaxes, 23 years for Panamaxes and 21 years for Capesizes. However, demolition is not simply a function of the fleet’s age profile. Several factors influence an owners’ decision on whether to scrap older vessels, notably (1) actual and anticipated returns from the charter market, (2) the relative running costs of the vessel and (3) prospective expenditure at classification society surveys. For much of the decade 2000-09, returns from the dry bulk charter markets supported continued investment in vessel life extension and scrapping volumes fell to minimal levels. This, however, ensured an accumulation of older tonnage in the fleet and, as a result, demolition proved extremely responsive to a deterioration in freight market conditions. Deletions from the dry bulk fleet rose from 3.5 Mdwt in 2008 to 14.7 Mdwt in 2009 and a new annual record of 35.2 Mdwt in 2012. Deletions dropped to an estimated annual total of 22.3 Mdwt in 2013 and were followed by a further decrease to 15.5 Mdwt in 2014. However, the first two months of 2015 saw a sharp rebound in dry bulk carrier demolition activity with total dry bulk carrier deletions running at an annualized rate of 29.9 Mdwt.

As the accompanying chart illustrates, record volumes of ship demolition did not prevent a marked acceleration in the rate of dry bulk carrier fleet supply growth. From an average of 6% to 7% per annum in 2005 to 2008, net fleet growth leapt to 12.7% per annum in 2009 to 2012, before slowing to approximately 5.8% in 2013 and an estimated 11-year low of 4.5% in 2014.

Demolition has, however, contributed to the uneven development of dry bulk carrier fleet supply over the past five to six years. In particular, the removal of elderly Handysize vessels, combined with the relatively modest newbuilding program in this sector compared with the other sizes, ensured that the 10,000 to 39,999 dwt fleet grew at an estimated CAGR of 2.8% between 2009 and 2014, compared with 9.6% for 40,000 to 64,999 dwt Handymaxes, 12.0% for 65,000 to 99,999 dwt Panamaxes and 12.4% for 100,000+ dwt Capes. As a result, the Handysize sector’s share of total dwt capacity fell from an estimated 16.2% at the end of 2009 to 11.4% at the end of 2014. By contrast, the share accounted for by 100,000+ dwt Capes rose from 37.4% to 41.1% over the same period. The 65,000 to 99,999 dwt Panamax sector recorded a more modest increase in its share, from 23.7% to 25.6%, and the 40,000 to 64,999 dwt Handymax sector a modest decline, from 22.7% to 21.9%.

Despite the demolition of recent years, there remains approximately 28 Mdwt of ships aged 25 years or older in the current drybulk carrier fleet with a further 48.4 Mdwt aged 20 to 24 years. Existing pre-1991-built ships are heavily concentrated in the Handysize fleet, yet the other sizes (particularly Capes) contain substantial concentrations of tonnage in the 20 to 24 year age range. As a result 20+ year old vessels account for 16.8% of total Handysize dwt capacity, compared with 8.4% of Handymaxes, 8.0% of Panamaxes and 10.6% of Capes.

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Charter Market & Freight Rates

The chartering of drybulk vessels can take several different forms, the most typical of which are summarized below.

Single voyage (“spot”) charter

This involves the hire of a vessel for just one stipulated voyage, carrying a designated quantity of a named commodity. For most such charters, an individual ship is specified that will carry out the voyage to be undertaken. The terms of the agreement between the charterer and vessel owner usually defines the port (or ports) of cargo loading and discharge, the dates between which the cargo is to be loaded and the cargo-handling terms. The vessel owner will receive from the charterer a mutually agreed payment (normally quoted as a US$ per ton freight rate). In return, the shipowner pays all voyage expenses (for example, the costs of fuel consumed on the voyage, plus port expenses), all operating costs (for example, insurance and crewing of the vessel), and capital expenses (for example, the servicing of any mortgage debt on the ship).

Contract of affreightment (“COA”)

Under a COA, the vessel owner and charterer agree terms for the carriage of a designated volume of a given commodity on a specified route (or routes), with such shipments being carried out on a regular basis. The agreement does not normally identify an individual ship that will be used to fulfill its terms but more general specifications on the vessels to be used (such as maximum age). Under the terms of a COA, freight is normally paid on an agreed US$ per ton basis, with the vessel owner then meeting all voyage, operating and capital costs incurred in the execution of such a charter.

Time charter

Under a time charter, the charterer takes the ship on hire for either (1) a trip between designated delivery and re-delivery positions or (2) for a designated period (for example, 12 months). The freight rate agreed between the shipowner and charterer is in terms of a daily hire rate (in US dollars), rather than as a US$ per ton figure. For longer term period charters, this may escalate at a rate mutually agreed between vessel owner and charterer. Under the terms of such charters, the vessel owner meets the ship’s operating and capital costs, with the charterer paying all variable voyage expenses (mainly fuel costs, plus port and canal dues). In addition, and unless otherwise stipulated in the charter agreement, the period charterer is able to trade the vessel to and from whichever loading and discharge ports that they choose, carrying whichever cargoes they prefer.

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Bareboat charter

Under a bareboat charter, the vessel owner effectively relinquishes control of their ship to the charterer (usually for a period of several years). The shipowner receives an agreed level of remuneration (which may again escalate at a mutually agreed rate) for the duration of the charter and remains responsible for the vessel’s capital costs. In return, the charterer assumes total control of the vessel, thereby becoming responsible for operating the ship and meeting all costs of such operation (such as crewing, repairs and maintenance), as well as the direct voyage expenses incurred (such as fuel costs, port expenses, etc) when it is trading.

Freight Rates

Freight rates are determined by the balance of tonnage demand and tonnage supply. Primarily as the result of record newbuilding deliveries, fleet utilization rates have dropped sharply from the peak levels of 2007, as illustrated by movements in key freight market indicators.

Given the diversity of routes and cargoes traded by the dry bulk fleet, freight market measures tend to focus on average worldwide spot earnings (expressed in US$ per day). The most recognized of these measures are published on a daily basis by the Baltic Exchange in London. In addition to global averages for standard designs of Handysize (28,000 dwt), Supramax (52,454 dwt), Panamax (74,000 dwt) and Capesize (172,000 dwt and 180,000 dwt- the Baltic Exchange Capesize Index has been based on a 180,000 dwt design since May 6, 2014, but for a transitional period daily assessments are also being published for the previous 172,000 dwt vessel description) vessels, together with a number of component routes, the Baltic Exchange also publishes a daily composite index for the entire dry bulk market, or the BDI.

From its all-time high of almost 12,000 points in May 2008, just prior to the global financial crisis, the BDI fell to below 700 points in December of the same year. After partial recovery in 2009, negative pressure on freight markets returned under the weight of sustained fleet supply growth. At 920 points in 2012, the BDI’s annual average was the lowest since the 1980s. The corresponding 2013 level was 1,206 points, but this annual average obscured sharp differences between the first and second halves of 2013. From its lowest quarterly average since 1986 in the first quarter of 2013 (796 points), the BDI rose to its highest quarterly average for two years in the fourth quarter of 2013 (1,854 points) against the background of sharply reduced fleet supply growth and new peaks for dry bulk trade.

Volatility remained a feature of drybulk spot markets in 2014 due, in part, to fluctuations in cargo availability (such as Indonesian bauxite and nickel ore) and port congestion, as well as shifts in patterns of import demand. Over the course of last year, the BDI ranged between 2,113 and 723 points, but its annual average of 1,105 points was below the corresponding 2013 level. Further spot market weakness has been seen in the first quarter of 2015, with the BDI’s year-to-date average of 615 points including a new daily low for the index.

The first of the accompanying charts traces developments in representative 12 month time charter rates for the four main sizes from January 2002 to the end of February 2015, encompassing the all-time highs in vessel earnings and the subsequent slump in rates. The second chart looks in more detail at developments since the beginning of 2009. It shows the Capesize-led rebound from mid-2013 to the first quarter of 2014 and the subsequent slide to current levels which are at, and in some cases below, the lows of 2012. These assessments are based on existing modern (under ten years of age) vessels. Within these individual size ranges, period rates will vary according to such factors as vessel age, size, fuel consumption and yard of build.

Although both charts show the extent to which vessel earnings in the different size ranges move broadly in tandem, they also highlight that the sharpness of market rises and falls vary in degree. Those size groups that carry the narrowest range of cargoes - or which are employed on the least number of routes - tend to experience the greatest variations in charter rates. Hence, in the drybulk shipping sector, earnings of Capesizes have been prone to fluctuate to a far greater degree than those of smaller vessels. It appears that as the average size of Capesize has increased, so has its relative volatility compared with the other sizes.

A feature of the recent downswing in the freight market cycle was the relative resilience of earnings in the Handymax and Handysize sectors compared with the larger vessel sizes. This can be partly attributed to the greater trading versatility offered by the cargo gear on these vessel types.

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Asset Values

In addition to the global balance between the demand for new vessels and available shipbuilding capacity, newbuilding prices are also influenced by changes in vessel construction costs, due to such factors as movements in steel plate prices or exchange rates against the U.S. dollar in key shipbuilding nations (principally China, Japan and South Korea).

A higher US dollar cost base helped to explain why oversupplied shipbuilding markets had not returned newbuilding prices to their previous historic lows. For example, Panamax bulk carrier newbuilding prices in Japan fell from $56 million in the third quarter of 2008 to $29 million in the final quarter of 2012, which compared with an estimated $20 million in the first quarter of 2002. By the end of 2013 Japanese prices had climbed to a 38-month high of $35 million, chiefly as the result of recovering newbuilding demand, and remained at similar levels through much of 2014. However, a subsequent fall to $30.0 million at the end of February 2015 has accompanied a marked weakening in the Yen’s value against the U.S. dollar, as well as lower dry bulk carrier charter rates.

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Secondhand values are primarily shaped by actual and anticipated earnings, newbuilding replacement costs (which are relevant for modern vessels) and residual scrap value (more relevant for older units). To an extent, prices are also influenced by the availability and cost of ship finance, as this will help to determine whether investors are able to realize their demand for new or secondhand vessels.

The accompanying charts compare the development of representative newbuilding, five and ten year old secondhand prices for Handysize, Handymax, Panamax and Capesize vessels since 2002. Individual vessel prices will vary according to such factors as specific size, age, cargo gear, yard of build and fuel consumption. Following the pattern of the charter markets, prices peaked between mid-2007 and mid-2008. Such was the shortage of shipbuilding capacity during that period - with a lengthening lead time between contracting and delivery - that demand for existing vessels with prompt delivery briefly created the abnormal situation where secondhand vessels were priced at a premium to newbuildings.

Consequently, the percentage decline in secondhand prices from their peaks was more severe than for newbuildings. Nevertheless, prices did not fall back to their 2002 lows before showing a firmer trend from the beginning of 2013 to March 2014, during which time five year old values rose by an average of approximately 50%, led by a 60% to 70% increase in Capesize prices. The onset of generally weaker spot and period charter rates over the remainder of 2014 began to erode secondhand values and has intensified during the early months of 2015. By the end of February 2015, Capesize and Handysize five year old prices were at similar levels to late 2012/early 2013, whereas Panamax and Handymax prices were at their lowest since 2002 and 2003, respectively.

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Environmental and Other Regulations

Government regulation significantly affects the ownership and operation of our fleet. We are subject to international conventions and treaties and national, state and local laws and regulations relating to safety and health and environmental protection in force in the countries in which our vessels may operate or are registered. These regulations include requirements relating to the storage, handling, emission, transportation and discharge of hazardous and non-hazardous materials, and the remediation of contamination and liability for damage to natural resources. Compliance with such laws, regulations and other requirements may entail significant expense, including vessel modifications and implementation of certain operating procedures.

A variety of government, quasi-governmental and private organizations subject our vessels to both scheduled and unscheduled inspections. These entities include the local port authorities (applicable national authorities such as the United States Coast Guard, harbor master or equivalent), classification societies; flag state administrations (countries of registry) and charterers, particularly terminal operators. Certain of these entities require us to obtain permits, licenses, certificates and other authorizations for the operation of our vessels. Failure to maintain necessary permits or approvals could require us to incur substantial costs or result in the operation of one or more of our vessels being temporarily suspended.

We believe that the heightened level of environmental and quality concerns among insurance underwriters, regulators and charterers is leading to greater inspection and safety requirements on all vessels and may accelerate the scrapping of older vessels throughout the industry. Increasing environmental concerns have created a demand for vessels that conform to the stricter environmental standards. We are required to maintain operating standards for all of our vessels that emphasize operational safety, quality maintenance, continuous training of our officers and crews and compliance with United States and international regulations. We believe that the operation of our vessels will be in substantial compliance with applicable environmental laws and regulations and that our vessels will have all material permits licenses, certificates or other authorizations necessary for the conduct of our operations. However, because such laws and regulations are frequently changed and may impose increasingly stricter requirements, we cannot predict the ultimate cost of complying with these requirements, or the impact of these requirements on the resale value or useful lives of our vessels. In addition, a future serious marine incident that causes significant adverse environmental impact, such as the 2010 BP plc Deepwater Horizon oil spill in the Gulf of Mexico, could result in additional legislation or regulations that could negatively affect our profitability.

International Maritime Organization

The International Maritime Organization, the United Nations agency for maritime safety and the prevention of pollution by ships, or the IMO, has adopted the International Convention for the Prevention of Marine Pollution from Ships, 1973, as modified by the related Protocol of 1978 and updated through various amendments (collectively, “MARPOL”). MARPOL entered

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into force on October 2, 1983. It has been adopted by over 150 nations, including many of the jurisdictions in which our vessels will operate.

MARPOL is broken into six Annexes, each of which regulates a different source of pollution. Annex I relates to oil leakage or spilling; Annexes II and III relate to harmful substances carried, in bulk, in liquid or packaged form, respectively; Annexes IV and V relate to sewage and garbage management, respectively; and Annex VI relates to air emissions.

In 2012, the IMO’s Marine Environmental Protection Committee, or MEPC, adopted by resolution amendments to the international code for the construction and equipment of ships carrying dangerous chemicals in bulk, or the IBC Code. The provisions of the IBC Code are mandatory under MARPOL and SOLAS. These amendments, which are expected to enter into force in June 2014, pertain to revised international certificates of fitness for the carriage of dangerous chemicals in bulk and identifying new products that fall under the IBC Code. We may need to make certain financial expenditures to comply with these amendments.

In 2013 the MEPC adopted by resolution amendments to the MARPOL Annex I Condition Assessment Scheme (CAS). These amendments, which are expected to become effective on October 1, 2014, pertain to revising references to the inspections of bulk carriers and tankers after the 2011 ESP Code, which enhances the programs of inspections, becomes mandatory. We may need to make certain financial expenditures to comply with these amendments.

Air Emissions

In September of 1997, the IMO adopted Annex VI to MARPOL to address air pollution. Effective May 2005, Annex VI set limits on nitrogen oxide emissions from ships whose diesel engines were constructed (or underwent major conversions) on or after January 1, 2000. It also prohibits “deliberate emissions” of “ozone depleting substances,” defined to include certain halons and chlorofluorocarbons. “Deliberate emissions” are not limited to times when the ship is at sea; they can for example include discharges occurring in the course of the ship’s repair and maintenance. Emissions of “volatile organic compounds” from certain vessels, and the shipboard incineration (from incinerators installed after January 1, 2000) of certain substances (such as polychlorinated biphenyls (PCBs)) are also prohibited. Annex VI also includes a global cap on the sulfur content of fuel oil and allows for special areas to be established with more stringent controls of sulfur emissions known as “Emission Control Areas,” or “ECAs” (see below).

The IMO’s Maritime Environment Protection Committee, or MEPC, adopted amendments to Annex VI on October 10, 2008, which entered into force on July 1, 2010. The amended Annex VI seeks to further reduce air pollution by, among other things, implementing a progressive reduction of the amount of sulfur contained in any fuel oil used on board ships. As of January 1, 2012, the amended Annex VI required that fuel oil contain no more than 3.50% sulfur (from the previous cap of 4.50%). By January 1, 2020, sulfur content must not exceed 0.50%, subject to a feasibility review to be completed no later than 2018.

Sulfur content standards are even stricter within certain ECAs. As of July 1, 2010, ships operating within an ECA were not permitted to use fuel with sulfur content in excess of 1.0% (reduced from 1.50%), which will be further reduced to 0.10% on January 1, 2015. Amended Annex VI established procedures for designating new ECAs. The Baltic and North Seas, certain coastal areas of North America and the United States Caribbean Sea are all within designated ECAs. If other ECAs are approved by the IMO or other new or more stringent requirements relating to emissions from marine diesel engines or port operations by vessels are adopted by the EPA or the states where we operate, compliance with these regulations could entail significant capital expenditures, operational changes, or otherwise increase the costs of our operations.

Amended Annex VI also establishes new tiers of stringent nitrogen oxide emissions standards for new marine engines, depending on their date of installation. The U.S. EPA promulgated equivalent (and in some senses stricter) emissions standards in late 2009.

As of January 1, 2013 MARPOL made mandatory certain measures relating to energy efficiency for ships. This included the requirement that all new ships utilize the Energy Efficiency Design Index, or EEDI, and all ships develop and implement Ship Energy Management Plans, or SEEMPs.

We believe that all our vessels will be compliant in all material respects with these regulations. Additional or new conventions, laws and regulations may be adopted that could require the installation of expensive emission control systems and could adversely affect our business, results of operations, cash flows and financial condition.

Ballast Water Management

IMO adopted the International Convention for the Control and Management of Ships’ Ballast Water and Sediments, or the BWM Convention, in February 2004. The BWM Convention’s implementing regulations call for a phased introduction of

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mandatory ballast water exchange requirements, to be replaced in time with mandatory concentration limits. The BWM Convention will not become effective until 12 months after it has been adopted by 30 states, the combined merchant fleets of which represent not less than 35% of the gross tonnage of the world’s merchant shipping. To date, there has not been sufficient adoption of this standard for it to take force. Many of the implementation dates originally written in the BWM Convention have already passed, so, on December 4, 2013, the IMO Assembly passed a resolution revising the dates of applicability of the requirements of the BWM Convention so that they are triggered by the entry into force date, and not the dates originally in the BWM Convention. This, in effect, made all vessels constructed before the entry into force date ‘existing’ vessels and delayed the date for installation of ballast water management systems on such vessels until the first renewal survey following entry into force. Once mid-ocean ballast exchange or ballast water treatment requirements become mandatory, the cost of compliance could increase for ocean carriers. Although we do not believe that the costs of such compliance would be material, it is difficult to predict the overall impact of such a requirement on our operations.

Safety Management System Requirements

The IMO has also adopted SOLAS and the LL Convention, which impose a variety of standards that regulate the design and operational features of ships. The IMO periodically revises the SOLAS and LL Convention standards. Amendments to SOLAS relating to safe manning of vessels that were adopted in May 2012 entered in force on January 1, 2014. The Convention on Limitation of Liability for Maritime Claims (LLMC) was recently amended and the amendments are expected to go into effect on June 8, 2015. The amendments alter the limits of liability for loss of life or personal injury claims and property claims against ship owners. We believe that all our vessels will be in substantial compliance with SOLAS and LL Convention standards.

Our operations are also subject to environmental standards and requirements under Chapter IX of SOLAS, the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention, or ISM Code. The ISM Code requires the owner of a vessel, or any person who has taken responsibility for operation of a vessel, to develop an extensive safety management system that includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions and procedures for operating its vessels safely and describing procedures for responding to emergencies. We rely upon the safety management system that we and our technical manager have developed for compliance with the ISM Code. The failure of a ship owner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, may decrease available insurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports.

The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they operate. This certificate evidences compliance by a vessel’s management with the ISM Code requirements for a safety management system. No vessel can obtain a safety management certificate under the ISM Code unless its manager has been awarded a document of compliance, issued by classification societies under the authority of each flag state. SSM has or will obtain documents of compliance for their offices and will obtain safety management certificates for all of our vessels for which the certificates are required by the IMO. The document of compliance and safety management certificate are renewed every five years, but the document of compliance is subject to audit verification annually and the safety management certificate at least every 2.5 years.

The flag state, as defined by the United Nations Convention on Law of the Sea, has overall responsibility for implementing and enforcing a broad range of international maritime regulations with respect to all ships granted the right to fly its flag. The “Shipping Industry Guidelines on Flag State Performance” evaluates and reports on flag states based on factors such as sufficiency of infrastructure, ratification, implementation, and enforcement of principal international maritime treaties and regulations, supervision of statutory ship surveys, casualty investigations and participation at IMO and ILO meetings. All of our vessels will be flagged in the Marshall Islands. Marshall Islands flagged vessels have historically received a good assessment in the shipping industry. We recognize the importance of a credible flag state and do not intend to use flags of convenience or flag states with poor performance indicators. Noncompliance with the ISM Code or other IMO regulations may subject the ship owner or bareboat charterer to increased liability, may lead to decreases in available insurance coverage for affected vessels and may result in the denial of access to, or detention in, some ports. The U.S. Coast Guard and European Union authorities have indicated that vessels not in compliance with the ISM Code by the applicable deadlines will be prohibited from trading in U.S. and European Union ports, respectively. Each of our vessels will be ISM Code certified. However, there can be no assurance that such certificate will be maintained.

Noncompliance with the ISM Code and other IMO regulations may subject the shipowner or bareboat charterer to increased liability, may lead to decreases in, or invalidation of, available insurance coverage for affected vessels and may result in the denial of access to, or detention in, some ports.

Pollution Control and Liability Requirements

The IMO has negotiated international conventions that impose liability for oil pollution in international waters and the territorial waters of the signatory to such conventions. Many countries have ratified and follow the liability plan adopted by the

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IMO and set out in the International Convention on Civil Liability for Oil Pollution Damage of 1969, as amended by different Protocol in 1976, 1984, and 1992, and amended in 2000, or the CLC. Under this convention and depending on whether the country in which the damage results is a party to the 1992 Protocol to the CLC, a vessel’s registered owner is strictly liable for pollution damage caused in the territorial waters of a contracting state by discharge of persistent oil, subject to certain exceptions. The 1992 Protocol changed certain limits on liability, expressed using the International Monetary Fund currency unit of Special Drawing Rights. The limits on liability have since been amended so that the compensation limits on liability were raised. The right to limit liability is forfeited under the CLC where the spill is caused by the ship owner’s actual fault and under the 1992 Protocol where the spill is caused by the ship owner’s intentional or reckless act or omission where the ship owner knew pollution damage would probably result. The CLC requires ships covered by it to maintain insurance covering the liability of the owner in a sum equivalent to an owner’s liability for a single incident. We believe that our protection and indemnity insurance will cover the liability under the plan adopted by the IMO.

The IMO adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage, or the Bunker Convention, to impose strict liability on ship owners for pollution damage in jurisdictional waters of ratifying states caused by discharges of bunker fuel. The Bunker Convention requires registered owners of ships over 1,000 gross tons to maintain insurance for pollution damage in an amount equal to the limits of liability under the applicable national or international limitation regime (but not exceeding the amount calculated in accordance with the Convention on Limitation of Liability for Maritime Claims of 1976, as amended). With respect to non-ratifying states, liability for spills or releases of oil carried as fuel in ship’s bunkers typically is determined by the national or other domestic laws in the jurisdiction where the events or damages occur.

IMO regulations also require owners and operators of vessels to adopt shipboard oil pollution emergency plans and/or shipboard marine pollution emergency plans for noxious liquid substances in accordance with the guidelines developed by the IMO.

The IMO continues to review and introduce new regulations. It is impossible to predict what additional regulations, if any, may be passed by the IMO and what effect, if any, such regulations may have on our operations.

The U.S. Oil Pollution Act of 1990 and Comprehensive Environmental Response, Compensation and Liability Act

The U.S. Oil Pollution Act of 1990, or OPA, established an extensive regulatory and liability regime for the protection and cleanup of the environment from oil spills. OPA affects all “owners and operators” whose vessels trade in the United States, its territories and possessions or whose vessels operate in United States waters, which includes the United States’ territorial sea and its 200 nautical mile exclusive economic zone. The United States has also enacted the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, which applies to the discharge of hazardous substances other than oil, whether on land or at sea. OPA and CERCLA both define “owner and operator” in the case of a vessel as any person owning, operating or chartering by demise, the vessel. OPA applies to oil tankers (which are not operated by us), as well as non-tanker ships that carry fuel oil, or bunkers, to power such ships. CERCLA also applies to our operations.

Under OPA, vessel owners and operators are “responsible parties” and are jointly, severally and strictly liable (unless the spill results solely from the act or omission of a third party, an act of God or an act of war) for all containment and clean-up costs and other damages arising from discharges or threatened discharges of oil from their vessels. OPA defines these other damages broadly to include:

• injury to, destruction or loss of, or loss of use of, natural resources and the costs of assessment thereof;

• injury to, or economic losses resulting from, the destruction of real and personal property;

• net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources;

• loss of subsistence use of natural resources that are injured, destroyed or lost;

• lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources;

• net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection from fire, safety or health hazards.

OPA contains statutory caps on liability and damages; such caps do not apply to direct cleanup costs. Effective July 31, 2009, the U.S. Coast Guard adjusted the limits of OPA liability for non-tank vessels to the greater of $1,000 per gross ton or $854,400 (subject to periodic adjustment for inflation). These limits of liability do not apply if an incident was proximately caused

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by the violation of an applicable U.S. federal safety, construction or operating regulation by a responsible party (or its agent, employee or a person acting pursuant to a contractual relationship), or a responsible party’s gross negligence or willful misconduct. The limitation on liability similarly does not apply if the responsible party fails or refuses to (i) report the incident where the responsibility party knows or has reason to know of the incident; (ii) reasonably cooperate and assist as requested in connection with oil removal activities; or (iii) without sufficient cause, comply with an order issued under the Federal Water Pollution Act (Section 311 (c), (e)) or the Intervention on the High Seas Act.

CERCLA contains a similar liability regime whereby owners and operators of vessels are liable for cleanup, removal and remedial costs, as well as damage for injury to, or destruction or loss of, natural resources, including the reasonable costs associated with assessing same, and health assessments or health effects studies. There is no liability if the discharge of a hazardous substance results solely from the act or omission of a third party, an act of God or an act of war. Liability under CERCLA is limited to the greater of $300 per gross ton or $5 million for vessels carrying a hazardous substance as cargo and the greater of $300 per gross ton or $500,000 for any other vessel. These limits do not apply (rendering the responsible person liable for the total cost of response and damages) if the release or threat of release of a hazardous substance resulted from willful misconduct or negligence, or the primary cause of the release was a violation of applicable safety, construction or operating standards or regulations. The limitation on liability also does not apply if the responsible person fails or refused to provide all reasonable cooperation and assistance as requested in connection with response activities where the vessel is subject to OPA.

OPA and CERCLA both require owners and operators of vessels to establish and maintain with the U.S. Coast Guard evidence of financial responsibility sufficient to meet the maximum amount of liability to which the particular responsible person may be subject. Vessel owners and operators may satisfy their financial responsibility obligations by providing a proof of insurance, a surety bond, qualification as a self-insurer or a guarantee. We plan to comply with the U.S. Coast Guard’s financial responsibility regulations by providing a certificate of responsibility evidencing sufficient self-insurance.

We currently maintain pollution liability coverage insurance in the amount of $1.0 billion per incident for each of our vessels. If the damages from a catastrophic spill were to exceed our insurance coverage it could have an adverse effect on our business and results of operation.

OPA specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries, provided they accept, at a minimum, the levels of liability established under OPA. Some states have enacted legislation providing for unlimited liability for oil spills. In some cases, states, which have enacted such legislation have not yet issued implementing regulations defining vessels owners’ responsibilities under these laws. We intend to comply with all existing and future applicable state regulations in the ports where our vessels call.

The 2010 Deepwater Horizon oil spill in the Gulf of Mexico may also result in additional legislative or regulatory initiatives, including the raising of liability caps under OPA or more stringent operational requirements. We cannot predict what additional requirements, if any, may be enacted and what effect, if any, such requirements may have on our operations.

Other Environmental Initiatives

The CWA prohibits the discharge of oil or other substances in U.S. navigable waters unless authorized by a duly-issued permit or exemption, and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation and damages and complements the remedies available under OPA and CERCLA. In addition, many U.S. states that border a navigable waterway have enacted environmental pollution laws that impose strict liability on a person for removal costs and damages resulting from a discharge of oil or a release of a hazardous substance. These laws may be more stringent than U.S. federal law.

The EPA regulates the discharge of ballast water and other substances in U.S. waters under the CWA. EPA regulations require vessels 79 feet in length or longer (other than commercial fishing and recreational vessels) to comply with a Vessel General Permit, or VGP, that authorizes ballast water discharges and other discharges incidental to the operation of vessels. The VGP imposes technology and water-quality based effluent limits for certain types of discharges and establishes specific inspection, monitoring, record keeping and reporting requirements to ensure the effluent limits are met. The EPA renewed and revised the VGP, effective December 19, 2013. The VGP now contains numeric ballast water discharge limits for most vessels to reduce the risk of invasive species in U.S. waters and more stringent requirements for exhaust gas scrubbers and requires the use of environmentally acceptable lubricants.

U.S. Coast Guard regulations adopted under the U.S. National Invasive Species Act, or NISA, also impose mandatory ballast water management practices for all vessels equipped with ballast water tanks entering or operating in U.S. waters. The Coast Guard, as of June 21, 2012, the U.S. Coast Guard adopted revised ballast water management regulations that established standards for allowable concentrations of living organisms in ballast water discharged from ships in U.S. waters. The USCG must

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approve any technology before it is placed on a vessel, but has not yet approved the technology necessary for vessels to meet the foregoing standards. Notwithstanding the foregoing, as of January 1, 2014, vessels are technically subject to the phasing-in of these standards. As a result, the USCG has provided waivers to vessels which cannot install the as-yet unapproved technology. The EPA, on the other hand, has taken a different approach to enforcing ballast discharge standards under the VGP. On December 27, 2013, the EPA issued an enforcement response policy in connection with the new VGP in which the EPA indicated that it would take into account the reasons why vessels do not have the requisite technology installed, but will not grant any waivers. The Coast Guard’s revised ballast water standards are consistent with requirements under the BWM Convention. Compliance with the EPA and the U.S. Coast Guard regulations could require the installation of equipment on our vessels to treat ballast water before it is discharged or the implementation of other port facility disposal arrangements or procedures at potentially substantial cost, or may otherwise restrict our vessels from entering U.S. waters.

The U.S. Clean Air Act of 1970, as amended by the Clean Air Act Amendments of 1977 and 1990, or the CAA, requires the EPA to promulgate standards applicable to emissions of volatile organic compounds and other air contaminants. Our vessels will be subject to vapor control and recovery requirements for certain cargoes when loading, unloading, ballasting, cleaning and conducting other operations in regulated port areas. Our vessels that operate in such port areas with restricted cargoes will be equipped with vapor recovery systems that satisfy these requirements. The CAA also requires states to adopt State Implementation Plans, or SIPs, designed to attain national health-based air quality standards in primarily major metropolitan and/or industrial areas. Several SIPs regulate emissions resulting from vessel loading and unloading operations by requiring the installation of vapor control equipment. As indicated above, our vessels operating in covered port areas will be equipped with vapor recovery systems that satisfy these existing requirements.

Compliance with future EPA and U.S. Coast Guard regulations could require the installation of certain engineering equipment and treatment systems or the implementation of other port facility disposal arrangements or procedures at potentially substantial cost, or may otherwise restrict our vessels from entering U.S. waters.

European Union Regulations

In October 2009, the European Union amended a directive to impose criminal sanctions for illicit ship-source discharges of polluting substances, including minor discharges, if committed with intent, recklessly or with serious negligence and the discharges individually or in the aggregate result in deterioration of the quality of water. Aiding and abetting the discharge of a polluting substance may also lead to criminal penalties. Member States were required to enact laws or regulations to comply with the directive by the end of 2010. Criminal liability for pollution may result in substantial penalties or fines and increased civil liability claims. The directive applies to all types of vessels, irrespective of their flag, but certain exceptions apply to warships or where human safety or that of the ship is in danger.

The European Union has adopted several regulations and directives requiring, among other things, more frequent inspections of high-risk ships, as determined by type, age, flag, and the number of times the ship has been detained. The European Union also adopted and then extended a ban on substandard ships and enacted a minimum ban period and a

definitive ban for repeated offenses. The regulation also provided the European Union with greater authority and control over classification societies, by imposing more requirements on classification societies and providing for fines or penalty payments for organizations that failed to comply.

Greenhouse Gas Regulation

Currently, the emissions of greenhouse gases from international shipping are not subject to the Kyoto Protocol to the United Nations Framework Convention on Climate Change, which entered into force in 2005 and pursuant to which adopting countries have been required to implement national programs to reduce greenhouse gas emissions. As of January 1, 2013, ships were required to comply with new MEPC mandatory requirements to address greenhouse gas emissions from ships. European Parliament and Council of Ministers are expected to endorse regulations that would require the monitoring and reporting greenhouse gas emissions from marine vessels in 2015. For 2020, the EU made a unilateral commitment to reduce overall greenhouse gas emissions from its member states from 20% of 1990 levels. The EU also committed to reduce its emissions by 20% under the Kyoto Protocol’s second period, from 2013 to 2020. If the strategy is adopted by the European Parliament and Council large vessels using European Union ports would be required to monitor, report and verify their carbon dioxide emissions beginning in January 2018. In December 2013, the European Union environmental ministers discussed draft rules to implement monitoring and reporting of carbon dioxide from ships.

In the United States, the EPA has issued a finding that greenhouse gases endanger the public health and safety, has adopted regulations to limit greenhouse gas emissions from certain mobile sources and has proposed regulations to limit greenhouse gas emissions from large stationary sources. Although the mobile source emissions regulations do not apply to greenhouse gas emissions from vessels, the EPA is considering a petition from the California Attorney General and environmental groups to regulate

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greenhouse gas emissions from ocean-going vessels. Any passage of climate control legislation or other regulatory initiatives by the IMO, European Union, the U.S. or other countries where we operate, or any treaty adopted at the international level to succeed the Kyoto Protocol, that restrict emissions of greenhouse gases could require us to make significant financial expenditures which we cannot predict with certainty at this time. Even in the absence of climate control legislation, our business may be indirectly affected to the extent that climate change may result in sea level changes or more intense weather events.

International Labour Organization

The International Labour Organization (ILO) is a specialized agency of the UN with headquarters in Geneva, Switzerland. The ILO has adopted the Maritime Labor Convention 2006 (MLC 2006). A Maritime Labor Certificate and a Declaration of Maritime Labor Compliance will be required to ensure compliance with the MLC 2006 for all ships above 500 gross tons in international trade. The MLC 2006 came into force on August 20, 2013 and we are in compliance with these results.

Vessel Security Regulations

Since the terrorist attacks of September 11, 2001, there have been a variety of initiatives intended to enhance vessel security. On November 25, 2002, the MTSA came into effect. To implement certain portions of the MTSA, in July 2003, the U.S. Coast Guard issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States. The regulations also impose requirements on certain ports and facilities, some of which are regulated by the EPA.

Similarly, in December 2002, amendments to SOLAS created a new chapter of the convention dealing specifically with maritime security. The new Chapter V became effective in July 2004 and imposes various detailed security obligations on vessels and port authorities, and mandates compliance with the International Ship and Port Facility Security Code, or the ISPS Code. The ISPS Code is designed to enhance the security of ports and ships against terrorism. After July 1, 2004, to trade internationally, a vessel must attain an International Ship Security Certificate, or ISSC, from a recognized security organization approved by the vessel’s flag state. Among the various requirements are:

• on-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations, including information on a ship’s identity, position, course, speed and navigational status;

• on-board installation of ship security alert systems, which do not sound on the vessel but only alert the authorities on shore;

• the development of a ship security plan;

• ship identification number to be permanently marked on a vessel’s hull;

• a continuous synopsis record kept onboard showing a vessel’s history including the name of the ship, the state whose flag the ship is entitled to fly, the date on which the ship was registered with that state, the ship’s identification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and

• compliance with flag state security certification requirements.

Any vessel operating without a valid certificate may be detained at port until it obtains an ISSC, or it may be expelled from port, or refused entry at port.

The U.S. Coast Guard regulations, intended to align with international maritime security standards, exempt from MTSA vessel security measures non-U.S. vessels provided such vessels have on board a valid ISSC that attests to the vessel’s compliance with SOLAS security requirements and the ISPS Code. Our managers intend to implement the various security measures addressed by MTSA, SOLAS and the ISPS Code, and we intend that our fleet will comply with applicable security requirements.

Inspection by Classification Societies

Every oceangoing vessel must be “classed” by a classification society. The classification society certifies that the vessel is “in class”, signifying that the vessel has been built and maintained in accordance with the rules of the classification society and complies with applicable rules and regulations of the vessel’s country of registry and the international conventions of which that country is a member. In addition, where surveys are required by international conventions and corresponding laws and ordinances

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of a flag state, the classification society will undertake them on application or by official order, acting on behalf of the authorities concerned.

The classification society also undertakes on request other surveys and checks that are required by regulations and requirements of the flag state. These surveys are subject to agreements made in each individual case and/or to the regulations of the country concerned.

For maintenance of the class certification, regular and extraordinary surveys of hull, machinery, including the electrical plant, and any special equipment classed are required to be performed as follows:

Annual Surveys.    For seagoing ships, annual surveys are conducted for the hull and the machinery, including the electrical plant and where applicable for special equipment classed, at intervals of 12 months from the date of commencement of the class period indicated in the certificate.

Intermediate Surveys.    Extended annual surveys are referred to as intermediate surveys and typically are conducted two and one-half years after commissioning and each class renewal. Intermediate surveys may be carried out on the occasion of the second or third annual survey.

Class Renewal Surveys.    Class renewal surveys, also known as special surveys, are carried out for the ship’s hull, machinery, including the electrical plant, and for any special equipment classed, at the intervals indicated by the character of classification for the hull. At the special survey the vessel is thoroughly examined, including audio-gauging to determine the thickness of the steel structures. Should the thickness be found to be less than class requirements, the classification society would prescribe steel renewals. The classification society may grant a one-year grace period for completion of the special survey. Substantial amounts of money may have to be spent for steel renewals to pass a special survey if the vessel experiences excessive wear and tear. In lieu of the special survey every four or five years, depending on whether a grace period was granted, a ship owner has the option of arranging with the classification society for the vessel’s hull or machinery to be on a continuous survey cycle, in which every part of the vessel would be surveyed within a five-year cycle. Upon a ship owner’s request, the surveys required for class renewal may be split according to an agreed schedule to extend over the entire period of class. This process is referred to as continuous class renewal.

All areas subject to survey as defined by the classification society are required to be surveyed at least once per class period, unless shorter intervals between surveys are prescribed elsewhere. The period between two subsequent surveys of each area must not exceed five years. Vessels under five years of age can waive drydocking in order to increase available days and decrease capital expenditures, provided the vessel is inspected underwater.

Most vessels are also drydocked every 30 to 36 months for inspection of the underwater parts and for repairs related to inspections. If any defects are found, the classification surveyor will issue a “recommendation” which must be rectified by the ship owner within prescribed time limits.

Most insurance underwriters make it a condition for insurance coverage that a vessel be certified as “in class” by a classification society which is a member of the International Association of Classification Societies, or the IACS. In 2012, the IACS issued draft harmonized Common Structure Rules, that align with the IMO goals standards, and were adopted in winter 2013. All our vessels will be certified as being “in class” by the American Bureau of Shipping, or ABS, and Det Norske Veritas, or DNV, major classification societies. All new and secondhand vessels that we acquire must be certified prior to their delivery under our standard purchase contracts and memorandum of agreement. If the vessel is not certified on the date of closing, we have no obligation to take delivery of the vessel.

Risk of Loss and Liability Insurance

The operation of any drybulk vessel includes risks such as mechanical and structural failure, hull damage, collision, property loss, cargo loss or damage and business interruption due to political circumstances in foreign countries, piracy, hostilities and labor strikes. In addition, there is always an inherent possibility of marine disaster, including oil spills and other environmental incidents, and the liabilities arising from owning and operating vessels in international trade. OPA, which imposes virtually unlimited liability upon owners, operators and demise charterers of vessels trading in the United States exclusive economic zone for certain oil pollution accidents in the United States, has made liability insurance more expensive for ship owners and operators trading in the United States market.

We maintain hull and machinery insurance, war risks insurance, protection and indemnity cover, and freight, demurrage and defense cover for our fleet in amounts that we believe to be prudent to cover normal risks in our operations. However, we may not be able to achieve or maintain this level of coverage throughout a vessel’s useful life. In addition, while we believe that

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the insurance coverage that we have obtained is adequate, not all risks can be insured, and there can be no guarantee that any specific claim will be paid, or that we will always be able to obtain adequate insurance coverage at reasonable rates.

Hull & Machinery and War Risks Insurance

We maintain marine hull and machinery and war risks insurance, which will include the risk of actual or constructive total loss, for all of our vessels. Each of our vessels is covered up to at least fair market value with deductibles of $100,000-$150,000 per vessel per incident. We also maintain increased value coverage for most of our vessels. Under this increased value coverage, in the event of total loss of a vessel, we will be able to recover the sum insured under the increased value policy in addition to the sum insured under the hull and machinery policy. Increased value insurance also covers excess liabilities which are not recoverable under our hull and machinery policy by reason of under insurance.

Protection and Indemnity Insurance

Protection and indemnity insurance is provided by mutual protection and indemnity associations, or P&I Associations, which insure liabilities to third parties in connection with our shipping activities. This includes third-party liability and other related expenses resulting from the injury or death of crew, passengers and other third parties, the loss or damage to cargo, claims arising from collisions with other vessels, damage to other third-party property, pollution arising from oil or other substances and salvage, towing and other related costs, including wreck removal. Our P&I coverage will be subject to and in accordance with the rules of the P&I Association in which the vessel is entered. Protection and indemnity insurance is a form of mutual indemnity insurance, extended by protection and indemnity mutual associations, or “clubs.” Our coverage is limited to approximately $6.5 billion, except for pollution which is limited to $1 billion.

Our protection and indemnity insurance coverage for pollution will be $1 billion per vessel per incident. The thirteen P&I Associations that comprise the International Group insure approximately 90% of the world’s commercial tonnage and have entered into a pooling agreement to reinsure each association’s liabilities. Each P&I Association has capped its exposure to this pooling agreement at $6.5 billion. As a member of a P&I Association which is a member of the International Group, we are subject to calls payable to the associations based on the group’s claim records as well as the claim records of all other members of the individual associations and members of the pool of P&I Associations comprising the International Group.

Permits and Authorizations

We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to our vessels. The kinds of permits, licenses and certificates required depend upon several factors, including the commodity transported, the waters in which the vessel operates, the nationality of the vessel’s crew and the age of a vessel. We believe that we have obtained all permits, licenses and certificates currently required to permit our vessels to operate. Additional laws and regulations, environmental or otherwise, may be adopted which could limit our ability to do business or increase the cost of us doing business.

C. Organizational Structure

Scorpio Bulkers Inc. is a company incorporated under the laws of the Marshall Islands. We own our vessels through separate wholly-owned subsidiaries that are incorporated in the Marshall Islands. Please see Exhibit 8.1 to this annual report for a list of our current subsidiaries.

D. Property, Plants and Equipment

We do not own any material real property. We lease office space in Monaco and in New York, New York. Our only material assets consist of our vessels (including our contracts for the construction of our new vessels) which are owned through our separate wholly owned subsidiaries.

For a description of our fleet, see “Item 4. Information on the Company—A. History and Development of the Company” and “Item 4. Information on the Company—B. Business Overview—Our Fleet.”

ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

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A. Operating Results

The following presentation of management’s discussion and analysis of results of operations and financial condition should be read in conjunction with our consolidated financial statements, accompanying notes thereto and other financial information appearing in “Item 18. Financial Statements.” You should also carefully read the following discussion with the sections of this annual report entitled “Item 3. Key Information- D. Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements.” Our consolidated financial statements as of December 31, 2014 and 2013 and for the year ended December 31, 2014 and the period from March 20, 2013 (date of inception) to December 31, 2013 have been prepared in accordance with U.S. GAAP. Financial results for the year ended December 31, 2014 are not comparable to the period from March 20, 2013 (date of inception) to December 31, 2013 because as of December 31, 2013, we were a development stage company because we had not begun our planned principal operations. Our consolidated financial statements are presented in U.S. dollars ($) unless otherwise indicated. Any amounts converted from another non-U.S. currency to U.S. dollars in this annual report are at the rate applicable at the relevant date, or the average rate during the applicable period.

We generate revenues by charging customers for the transportation of their drybulk cargoes using our vessels. Historically, these services generally have been provided under the following basic types of contractual relationships:

• Voyage charters, which are charters for short intervals that are priced on current, or “spot,” market rates.

• Time charters, which are chartered to customers for a fixed period of time at rates that are generally fixed, but may contain a variable component based on inflation, interest rates, or current market rates.

• Commercial Pools, whereby we participate with other shipowners to operate a large number of vessels as an integrated transportation system, which offers customers greater flexibility and a higher level of service while achieving scheduling efficiencies. Pools negotiate charters primarily in the spot market. The size and scope of these pools enable them to enhance utilization rates for pool vessels by securing backhaul voyages and COAs (described below), thus generating higher effective TCE revenues than otherwise might be obtainable in the spot market.

• For all types of vessels in contractual relationships, we are responsible for crewing and other vessel operating costs for our owned vessels and the charterhire expense for vessels that we time charter-in.

The table below illustrates the primary distinctions among these different employment arrangements:

	Voyage Charter	Time Charter	Commercial Pool
Typical contract length	Single voyage	One year or more	Varies
Hire rate basis (1)	Varies	Daily	Varies
Voyage expenses (2)	We pay	Customer pays	Pool pays
Vessel operating costs for owned vessels (3)	We pay	We pay	We pay
Charterhire expense for vessels chartered-in (3)	We pay	We pay	We pay
Off-hire (4)	Customer does not pay	Customer does not pay	Pool does not pay

(1) “Hire rate” refers to the basic payment from the charterer for the use of the vessel.

(2) “Voyage expenses” refers to expenses incurred due to a vessel’s traveling from a loading port to a discharging port, such as fuel (bunker) cost, port expenses, agent’s fees, canal dues and extra war risk insurance, as well as commissions.

(3) “Vessel operating costs” is defined below under “—Important Financial and Operational Terms and Concepts.”

(4) “Off-hire” refers to the time a vessel is not available for service due primarily to scheduled and unscheduled repairs or drydockings. For time chartered-in vessels, we do not pay the charterhire expense when the vessel is off-hire.

As of the date of this annual report, all of our owned and time chartered-in vessels were operating in the Scorpio Group Pools, except SBI Puro, which is on a ten to 13 month time charter-out agreement expiring in November 2015.

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Important Financial and Operational Terms and Concepts

We use a variety of financial and operational terms and concepts. These include the following:

Vessel revenues. Vessel revenues primarily include revenues from time charters, pool revenues and voyage charters (in the spot market). Vessel revenues are affected by hire rates and the number of days a vessel operates. Vessel revenues are also affected by the mix of business between vessels on time charter, vessels in pools and vessels operating on voyage charter. Revenues from vessels in pools and on voyage charter are more volatile, as they are typically tied to prevailing market rates.

Voyage charters. Voyage charters or spot voyages are charters under which the customer pays a transportation charge for the movement of a specific cargo between two or more specified ports. We pay all of the voyage expenses.

Voyage expenses. Voyage expenses primarily include bunkers, port charges, canal tolls, cargo handling operations and brokerage commissions paid by us under voyage charters. These expenses are subtracted from voyage charter revenues to calculate TCE revenues.

Vessel operating costs. For our owned vessels, we are responsible for vessel operating costs, which include crewing, repairs and maintenance, insurance, stores, lube oils, communication expenses, and technical management fees. The two largest components of our vessel operating costs are crewing, and repairs and maintenance. Expenses for repairs and maintenance tend to fluctuate from period to period because most repairs and maintenance typically occur during periodic drydocking. Please read “Drydocking” below. We expect these expenses to increase as our fleet matures and to the extent that it expands.

Additionally, these costs include technical management fees that we paid to SSM, which is controlled by the Lolli-Ghetti family. Pursuant to our Master Agreement, SSM provides us with technical services, and we provide them with the ability to subcontract technical management of our vessels with our approval.

Charterhire. Charterhire is the amount we pay the owner for time chartered-in vessels. The amount is usually for a fixed period of time at rates that are generally fixed, but may contain a variable component based on inflation, interest rates, or current market rates. The vessel’s owner is responsible for crewing and other vessel operating costs.

Drydocking. We periodically drydock each of our owned vessels for inspection, repairs and maintenance and any modifications to comply with industry certification or governmental requirements. Generally, each vessel is drydocked every 30 months to 60 months. We capitalize a substantial portion of the costs incurred during drydocking and amortize those costs on a straight-line basis from the completion of a drydocking to the estimated completion of the next drydocking. We immediately expense costs for routine repairs and maintenance performed during drydocking that do not improve or extend the useful lives of the assets. The number of drydockings undertaken in a given period and the nature of the work performed determine the level of drydocking expenditures.

Depreciation. Depreciation expense typically consists of:

• charges related to the depreciation of the historical cost of our owned vessels (less an estimated residual value) over the estimated useful lives of the vessels; and

• charges related to the amortization of drydocking expenditures over the estimated number of years to the next scheduled drydocking.

Time charter equivalent (TCE) revenue or rates. We report TCE revenues, a non-GAAP measure, because (i) we believe it provides additional meaningful information in conjunction with voyage revenues and voyage expenses, the most directly comparable U.S.-GAAP measure, (ii) it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance, (iii) it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company’s performance irrespective of changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods, and (iv) we believe that it presents useful information to investors. TCE revenue is vessel revenue less voyage expenses, including bunkers and port charges. The TCE rate achieved on a given voyage is expressed in U.S. dollars/day and is generally calculated by taking TCE revenue and dividing that figure by the number of revenue days in the period. For a reconciliation of TCE revenue, deduct voyage expenses from revenue on our Statement of Operations.

Revenue days. Revenue days are the total number of calendar days our vessels were in our possession during a period, less the total number of off-hire days during the period associated with major repairs or drydockings. Consequently, revenue days

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represent the total number of days available for the vessel to earn revenue. Idle days, which are days when a vessel is available to earn revenue, yet is not employed, are included in revenue days. We use revenue days to show changes in net vessel revenues between periods.

Contract of affreightment. A contract of affreightment, or COA, relates to the carriage of specific quantities of cargo with multiple voyages over the same route and over a specific period of time which usually spans a number of years. A COA does not designate the specific vessels or voyage schedules that will transport the cargo, thereby providing both the charterer and shipowner greater operating flexibility than with voyage charters alone. The charterer has the flexibility to determine the individual voyage scheduling at a future date while the shipowner may use different vessels to perform these individual voyages. As a result, COAs are mostly entered into by large fleet operators, such as pools or shipowners with large fleets of the same vessel type. We pay the voyage expenses while the freight rate normally is agreed on a per cargo ton basis.

Commercial pools. To increase vessel utilization and revenues, we participate in commercial pools with other shipowners and operators of similar modern, well-maintained vessels. By operating a large number of vessels as an integrated transportation system, commercial pools offer customers greater flexibility and a higher level of service while achieving scheduling efficiencies. Pools employ experienced commercial charterers and operators who have close working relationships with customers and brokers, while technical management is performed by each shipowner. Pools negotiate charters with customers primarily in the spot market. The size and scope of these pools enable them to enhance utilization rates for pool vessels by securing backhaul voyages and COAs, thus generating higher effective TCE revenues than otherwise might be obtainable in the spot market while providing a higher level of service offerings to customers.

Operating days. Operating days are the total number of available days in a period with respect to the owned vessels, before deducting available days due to off-hire days and days in drydock. Operating days is a measurement that is only applicable to our owned vessels, not our chartered-in vessels.

Items You Should Consider When Evaluating Our Results

You should consider the following factors, as well as Item 3. Key Information - D. Risk Factors, when evaluating our historical financial performance and assessing our future prospects:

Our vessel revenues are affected by cyclicality in the drybulk markets. The cyclical nature of the drybulk industry causes significant increases or decreases in the revenue we earn from our vessels, particularly those vessels we trade in the spot market. We employ a chartering strategy to capture upside opportunities in the spot market while using fixed-rate time charters to reduce downside risks, depending on SCM’s outlook for freight rates, drybulk market conditions and global economic conditions. Historically, the drybulk industry has been cyclical, experiencing volatility in profitability due to changes in the supply of, and demand for, drybulk capacity. The supply of drybulk capacity is influenced by the number and size of new vessels built, vessels scrapped, converted and lost, the number of vessels that are out of service, and regulations that may effectively cause early obsolescence of tonnage. Factors that influence demand for drybulk vessel capacity include:

• supply of and demand for energy resources, commodities and industrial products;

• changes in the exploration or production of energy resources, commodities, consumer and industrial products;

• the location of regional and global exploration, production and manufacturing facilities;

• the location of consuming regions for energy resources, commodities, consumer and industrial products;

• the globalization of production and manufacturing;

• global and regional economic and political conditions, including armed conflicts and terrorist activities, embargoes and strikes;

• developments in international trade;

• changes in seaborne and other transportation patterns, including the distance cargo is transported by sea;

• environmental and other regulatory developments;

• currency exchange rates; and

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• weather.

    The Baltic Dry Index, or BDI (a drybulk index) displayed weakness and volatility through the entire year in 2014 following a volatile environment in 2013.  During 2014, the BDI recorded a high of 2,113 on January 1, 2014, declined to a low of 723 on July 22, 2014, climbed again to a peak of 1,484 on November 4, 2014, and declined again to a level of 782 on December 24, 2014.  In 2015, the BDI started off at 771 on January 2, 2015 and has since declined to 599 as of March 30, 2015. Given the fact that most of our vessels are chartered at spot market-related rates through our participation in pools, we expect that the weak rate environment will adversely impact our first quarter 2015 revenues and results of operations.

Results for the Year ended December 31, 2014 Compared to the Period from March 20, 2013 (date of inception) to December 31, 2013

For the year ended December 31, 2014, we recorded a net loss of $116.6 million, compared to a net loss of $6.3 million for the period from March 20, 2013 (date of inception) to December 31, 2013. The principal reasons for the increase in our net loss are described below.

Vessel revenue - Vessel revenue for the year ended December 31, 2014 was $49.0 million, of which $38.8 million was generated by the Kamsarmax vessels that we own and time chartered-in and $10.2 million was generated by the Ultramax vessels that we time chartered-in. We did not own or operate any vessels during the period from March 20, 2013 (date of inception) to December 31, 2013, and accordingly, we had no vessel revenue during that period. We expect voyage revenue to increase during 2015 as we take delivery of the vessels under construction in our Newbuilding Program.

Voyage expense - Voyage expense for the year ended December 31, 2014 was $3.6 million, of which $3.5 million related to our Kamsarmax vessels and $0.1 million related to our Ultramax vessels. Voyage expenses primarily include bunkers, port charges, canal tolls, cargo handling operations and brokerage commissions paid by us under voyage charters. These expenses were subtracted from voyage charter revenues to calculate TCE revenues. Voyage expenses incurred during 2014 principally related to the initial spot voyages of certain time chartered-in Kamsarmax vessels during the period prior to their employment in the Scorpio Kamsarmax Pool. We did not own or operate any vessels during the period from March 20, 2013 (date of inception) to December 31, 2013, and accordingly, we had no voyage expense during that period.

Vessel operating cost - Vessel operating cost, which includes crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs, was $1.6 million for the year ended December 31, 2014. All of this cost relates to our Kamsarmax vessels,  which were delivered to us from the shipyard in August 2014 and September 2014. We did not own any vessels during the period from March 20, 2013 (date of inception) to December 31, 2013, and accordingly, we had no vessel operating costs during that period. We expect vessel operating costs to increase during 2015 as we take delivery of the vessels under construction in our Newbuilding Program.

Charterhire expense - Charterhire expense which is the cost of chartering-in vessels, was $73.2 million for the year ended December 31, 2014, of which $57.9 million related to chartering-in Kamsarmax vessels and $15.3 million related to chartering-in Ultramax vessels. Charterhire expense incurred for vessels that we time chartered-in exceeded the revenue we generated by chartering those vessels out. We did not time charter-in any vessels during the period from March 20, 2013 (date of inception) to December 31, 2013, and accordingly, we had no charterhire expense during that period. We expect charterhire expense to decrease in 2015 as we redeliver the chartered-in vessels to their owners.

Vessel depreciation - Vessel depreciation was $0.7 million for the year ended December 31, 2014, which was associated with the depreciation of the two Kamsarmax vessels which were delivered to us from the shipyards in August 2014 and September 2014. We did not own any vessels during the period from March 20, 2013 (date of inception) to December 31, 2013, and accordingly, we had no vessel depreciation during that period. We expect vessel depreciation to increase during 2015 as we take delivery of the vessels under construction in our Newbuilding Program.

General and administrative expenses - General and administrative expenses for the year ended December 31, 2014 was $31.9 million, compared to $5.5 million for the period from March 20, 2013 (date of inception) to December 31, 2013. The majority of general and administrative expenses consisted of amortization of stock-based compensation, a non-cash expense, which was $23.9 million for the year ended December 31, 2014 and $3.4 million for the period from March 20, 2013 (date of inception) to December 31, 2013. The increase in general and administrative expenses during the year ended December 31, 2014 compared to the prior year period relates to the expanded costs of owning and operating a fleet of vessels in 2014.

Write down on assets held for sale - During the year ended December 31, 2014, we recorded a write down on assets held for sale aggregating $55.5 million which includes (i) the amount by which balances in vessels under construction for the seven contracts classified as held for sale exceeded the selling prices of the contracts net of remaining installments yet to be made under

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the contracts, including modifications to contract prices of the six LR2 product tanker contracts, (ii) costs expected to be incurred to suppliers relating to the cancellation of orders for the purchase of components that would have been used in the construction of the Capesize vessels prior to their modification, and (iii) the write off of a portion of deferred financing costs associated with a reduction in negotiated loan facilities that would have been collateralized by certain of the modified Capesize vessels.

Foreign exchange gain (loss) - During the year ended December 31, 2014, we had a foreign exchange gain of $0.0 million compared to a foreign exchange loss of $1.1 million for the period from March 20, 2013 (date of inception) to December 31, 2013. Such loss during the 2013 period relates to the issuance and sale on September 24, 2013 of 33,400,000 common shares for net proceeds that were denominated in Norwegian kroner, in Norwegian private placement transactions exempt from registration under the Securities Act, which were not settled in U.S. dollars until October 2013.

Critical Accounting Policies

This discussion and analysis of our financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of those financial statements requires us to make estimates and judgments that affect the reported amount of assets and liabilities, revenues and expenses and related disclosure of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions or conditions.

Critical accounting policies are those that reflect significant judgments or uncertainties, and potentially result in materially different results under different assumptions and conditions. We have described below what we believe are our most critical accounting policies.

Revenue recognition

Vessel revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of discounts, and other sales-related or value added taxes.

Vessel revenue is comprised of time charter revenue, voyage revenue and pool revenue.

• Time charter revenue is recognized as services are performed based on the daily rates specified in the time charter contract.

• Voyage charter agreements are charter hires, where a contract is made in the spot market for the use of a vessel for a specific voyage for a specified charter rate. Revenue from voyage charter agreements is recognized on a pro rata basis based on the relative transit time in each period. The period over which voyage revenues are recognized commences at the time the vessel departs from its last discharge port and ends at the time the discharge of cargo at the next discharge port is completed. We do not begin recognizing revenue until a charter has been agreed to by the customer and us, even if the vessel has discharged its cargo and is sailing to the anticipated load port on its next voyage. We do not recognize revenue when a vessel is off hire. Estimated losses on voyages are provided for in full at the time such losses become evident. In the application of this policy, we do not begin recognizing revenue until (i) the amount of revenue can be measured reliably, (ii) it is probable that the economic benefits associated with the transaction will flow to the entity, (iii) the transactions’ stage of completion at the balance sheet date can be measured reliably and (iv) the costs incurred and the costs to complete the transaction can be measured reliably.

• Pool revenue for each vessel is determined in accordance with the profit sharing terms specified within each pool agreement. In particular, the pool manager aggregates the revenues and expenses of all of the pool participants and distributes the net earnings to participants based on:

◦ the pool points (vessel attributes such as cargo carrying capacity, fuel consumption, and construction characteristics are taken into consideration); and

◦ the number of days the vessel participated in the pool in the period.

We recognize pool revenue on a monthly basis, when the vessel has participated in a pool during the period and the amount of pool revenue for the month can be estimated reliably. We receive estimated vessel earnings based on the known number of days the vessel has participated in the pool, the contract terms, and the estimated monthly pool revenue. On a quarterly basis, we receive a report from the pool which identifies the number of days the vessel participated in the pool, the total pool points for the period, the total pool revenue for the period, and the calculated share of pool revenue for the vessel. We review the quarterly report for consistency with each vessel’s pool agreement and vessel management records. The estimated pool revenue is reconciled quarterly, coinciding with our external reporting periods, to the actual pool revenue earned, per the pool report. Consequently, in

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our financial statements, reported revenues represent actual pooled revenues. While differences do arise in the performance of these quarterly reconciliations, such differences are not material to total reported revenues.

Vessels and depreciation

We record the value of our vessels at their cost (which includes acquisition costs directly attributable to the vessel and expenditures made to prepare the vessel for its initial voyage) less accumulated depreciation. We depreciate our vessels on a straight-line basis over their estimated useful lives, estimated to be 25 years from date the vessel is ready for its first voyage. Depreciation is based on cost less the estimated residual value which is the lightweight tonnage of each vessel multiplied by scrap value per ton. The scrap value per ton is estimated taking into consideration the historical four year average scrap market rates at the balance sheet date with changes accounted for in the period of change and in future periods. We believe that a 25-year depreciable life for our vessels is consistent with that of other ship owners and with its economic useful life. An increase in the useful life of the vessel or in its residual value would have the effect of decreasing the annual depreciation charge and extending it into later periods. A decrease in the useful life of the vessel or in its residual value would have the effect of increasing the annual depreciation charge. However, when regulations place limitations over the ability of a vessel to trade on a worldwide basis, or when the cost of complying with such regulations is not expected to be recovered, we will adjust the vessel’s useful life to end at the date such regulations preclude such vessel’s further commercial use. The carrying value of our vessels does not represent the fair market value of such vessels or the amount we could obtain if we were to sell any of our vessels, which could be more or less. Under U.S. GAAP, we would not record a loss if the fair market value of a vessel (excluding its charter) is below our carrying value unless and until we determine to sell that vessel or the vessel is impaired as discussed below under “Impairment of long-lived assets.”

Pursuant to our bank credit facilities, prior to drawdown of loans under the credit facilities we submit to the lenders valuations of the vessels collateralizing the relevant facility. Thereafter, we will regularly submit to the lenders valuations of our vessels on an individual charter free basis in order to evidence our compliance with the collateral maintenance covenants under our bank credit facilities.  Such a valuation is not necessarily the same as the amount any vessel may bring upon sale, which may be more or less, and should not be relied upon as such.  We have received valuations on six specific vessels between November 2014 and February 2015. If we were to apply those valuations received to the remaining vessels under construction as of December 31, 2014, excluding the seven vessels under construction classified as held for sale, the carrying value of our two vessels and contract price of 52 of our 71 vessels under construction would exceed their fair values by an aggregate of $148.6 million, ranging from $0.3 million per vessel to $9.4 million per vessel. The fair values of our vessels can fluctuate depending on the shipyards and the dates of delivery. These assumptions have not been taken into account in the amounts disclosed above.

Impairment of long-lived assets held for use

We follow Accounting Standards Codification or ASC Subtopic 360-10, Property, Plant and Equipment or ASC 360-10, which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. If indicators of impairment are present, we perform an analysis of the anticipated undiscounted future net cash flows of the related long-lived assets.

The current economic and market conditions, including the significant disruptions in the global credit markets, are having broad effects on participants in a wide variety of industries. Since mid-August 2008, the charter rates in the drybulk charter market have declined significantly, and drybulk vessel values have also declined both as a result of a slowdown in the availability of global credit and the significant deterioration in charter rates.

When indicators of impairment are present and our estimate of undiscounted future cash flows for any vessel is lower than the vessel’s carrying value, the carrying value is written down, by recording a charge to operations, to the vessel’s fair market value if the fair market value is lower than the vessel’s carrying value.

During our December 31, 2014 assessment, we determined that the future income streams expected to be earned by our vessels, including vessels under construction and excluding assets held for sale which are carried at balances that approximate their fair values, over their remaining operating lives on an undiscounted basis would be sufficient to recover their carrying values and, accordingly, it confirmed that our vessels were not impaired under U.S. GAAP.  Our estimated future undiscounted cash flows exceeded each of our vessels’ carrying values, as well as the expected carrying values of vessels under construction upon their delivery to us by the shipyards, by a considerable margin (approximately 116% - 289% of carrying value).  Our vessels remain fully utilized and have a relatively long average remaining useful life in which to recover sufficient cash flows on an undiscounted basis to recover their carrying values as of December 31, 2014.  As of December 31, 2014, all but two of our vessels under construction had remaining lives of 25 years, and the two Kamsarmax vessels we owned as of December 31, 2014 had an average remaining useful life of 24.7 years. Management will continue to monitor developments in charter rates in the markets

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in which it participates with respect to the expectation of future rates over an extended period of time that are utilized in the analyses.

In developing estimates of future undiscounted cash flows, we make assumptions and estimates about the vessels’ future performance, with the significant assumptions being related to charter rates, fleet utilization, vessels’ operating costs and drydocking requirements, vessels’ residual value and the estimated remaining useful life of each vessel. The assumptions used to develop estimates of future undiscounted cash flows are based on historical trends.  Specifically, we utilize the rates currently in effect for the duration of their current time charters, without assuming any profit sharing.  For periods of time where our vessels are not fixed on time charters, we utilize an estimated daily TCE for our vessels’ unfixed days using the five year time charter average in effect as of December 31, 2014 for the next five years and the ten year historical average for the remainder of the vessels’ useful lives.  Actual equivalent drybulk shipping rates are currently significantly lower than the estimated rate.   We further assume a utilization rate of 95% for our vessels and do not apply any inflation to the estimated rates used. We do apply a 3% inflation rate to vessel operating costs and drydocking costs.

Although we believe that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highly subjective. There can be no assurance as to how long charter rates and vessel values will remain at their currently low levels or whether they will improve by any significant degree. Charter rates may remain at depressed levels for some time, which could adversely affect our revenue and profitability, and future assessments of vessel impairment.

Assets held for sale

Assets held for sale include vessels and contracts for the construction of vessels and are classified in accordance ASC 360, Property, Plant, and Equipment. We consider such assets to be held for sale when all of the following criteria are met:

• management commits to a plan to sell the property;

• it is unlikely that the disposal plan will be significantly modified or discontinued;

• the property is available for immediate sale in its present condition;

• actions required to complete the sale of the property have been initiated;

• sale of the property is probable and we expect the completed sale will occur within one year; and

• the property is actively being marketed for sale at a price that is reasonable given its current market value.

Upon designation as an asset held for sale, we record the carrying value of the asset at the lower of its carrying value or its estimated fair value, less estimated costs to sell, and, if the asset is a vessel, we cease depreciation.

B. Liquidity and Capital Resources

We were formed for the purpose acquiring and operating latest generation of newbuilding drybulk carriers with fuel-efficient specifications and carrying capacities of greater than 30,000 dwt. As of the date of this annual report, our Operating Fleet consists of 21 drybulk vessels consisting of eight vessels that we own (one Capesize vessel, three Kamsarmax vessels and four Ultramax vessels) and 13 vessels that we charter-in. Our Newbuilding Program at its peak consisted of contracts for the construction of 80 drybulk vessels with established shipyards in Japan, China, South Korea and Romania, which we have agreed to acquire for an aggregate purchase price of $3,102.8 million, including 29 Ultramax vessels, 23 Kamsarmax vessels and 28 Capesize vessels. Of these 80 newbuilding vessels, as of the date of this annual report, we took delivery of eight vessels (described above), and we intend to sell ten of our newbuilding contracts, consisting of one contract for the construction of a Kamsarmax vessel and nine contracts for the construction of Capesize vessels which have subsequently been converted, upon agreement with the respective shipyards, to contracts for the construction of six LR2 tankers and three LR1 tankers. The sale of contracts for the construction of vessels preserves liquidity in that they generate cash from the sale of the asset and effectively relieve us of the requirement to make the remaining unpaid installments under the contracts. A tabular summary of our contracts for the construction of vessels under our Newbuilding Program is as follows:

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	Capesize		Kamsarmax		Ultramax		LR2		LR1		Total
Contracted for in our Newbuilding Program	28		23		29		—		—		80
Delivered from shipyards in 2014	—		(2	)	—		—		—		(2	)
Committed to convert into tankers in 2014	(6	)	—		—		6		—		—
Classified as assets held for sale in 2014	—		(1	)	—		(6	)	—		(7	)
Vessels under construction as of December 31, 2014	22		20		29		—		—		71
Delivered from shipyards in 2015	(1	)	(1	)	(4	)	—		—		(6	)
Committed to convert into tankers in 2015	(3	)	—		—		—		3		—
Classified as assets held for sale in 2015	—		—		—		—		(3	)	(3	)
Vessels under construction as of March 30, 2015	18		19		25		—		—		62

The remaining 62 drybulk vessels in our Newbuilding Program (25 Ultramax vessels, 19 Kamsamax vessels and 18 Capesize vessels) have an aggregate purchase price of $2,296.7 million. The aggregate purchase price of the ten contracts we intend to sell is $527.8 million as of the date of this annual report. Our business is capital intensive and we intend to pay for these vessels with a combination of proceeds from the issuance of bonds, cash generated from operations, equity capital, and borrowings from commercial banks under one or more secured credit facilities. We expect to rely on operating cash flows as well as equity offerings and long-term borrowings under secured credit facilities to implement our growth plan. We believe that our current cash balance as well as operating cash flows; available borrowings under our credit facilities, including our credit facilities described below, proceeds from the sale of the ten construction contracts described above, the potential sale of other construction contracts in our Newbuilding Program, and potential issuances of debt and equity securities will be sufficient to meet our liquidity needs for the next 12 months.

The drybulk vessels in our Newbuilding Program are expected to be delivered to us between the second quarter of 2015 and the third quarter of 2016. Vessel construction projects are subject to risks of delay or cost overruns inherent in any large construction project from numerous factors, including shortages of equipment, materials or skilled labor, unscheduled delays in the delivery of ordered materials and equipment or shipyard construction, failure of equipment to meet quality and/or performance standards, financial or operating difficulties experienced by equipment vendors or the shipyard, unanticipated actual or purported change orders, inability to obtain required permits or approvals, unanticipated cost increases between order and delivery, design or engineering changes and work stoppages and other labor disputes, adverse weather conditions or any other events of force majeure. Significant cost overruns or delays could adversely affect our financial position, results of operations and cash flows. Additionally, failure to complete a project on time may result in the delay of revenue from that vessel.

As of December 31, 2014, we have made total yard payments in the amount of $848.5 million and we have remaining yard installments in the amount of $1,814.4 million before we take delivery of all the vessels in our Newbuilding Program (excluding the seven newbuilding vessels we had classified as assets held for sale as of that date). With respect to the seven vessels under construction that were held for sale as of December 31, 2014, we made total yard payments of $96.4 million through that date and such contracts currently have remaining installments, inclusive of conversion costs, to the yard of $295.3 million as of December 31, 2014. If we are not able to borrow additional funds, raise other capital or utilize available cash on hand, we may not be able to acquire these newbuilding vessels, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. If for any reason we fail to make a payment when due, which may result in a default under our newbuilding contracts, or otherwise fail to take delivery of our newbuild vessels, we would be prevented from realizing potential revenues from these vessels, we could also lose all or a portion of our yard payments that were paid by us and we could be liable for penalties and damages under such contracts.

In addition, in the event the shipyards do not perform under their contracts and we are unable to enforce certain refund guarantees with third party banks for any reason, we may lose all or part of our investment, which would have a material adverse effect on our results of operations, financial condition and cash flows.

Equity Issuances

Upon our formation in March 2013, we issued 1,500 common shares to SSH. Between July 1, 2013 and July 16, 2013, we issued and sold 31,250,000 common shares, par value $0.01 per share, for net proceeds of $242.8 million; on September 24, 2013, we issued and sold an additional 33,400,000 common shares for net proceeds of $290.5 million; and on October 31, 2013, we issued and sold an additional 32,590,411 common shares for net proceeds of $291.0 million, in Norwegian private placement transactions exempt from registration under the Securities Act.

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In December 2013, we completed our underwritten initial public offering of 31,300,000 common shares at $9.75 per share, and in January 2014, the underwriters in the initial public offering exercised their option to purchase an additional 4,695,000 common shares. We received aggregate net proceeds of $326 million, which we used to fund newbuilding vessel capital expenditures.

On November 20, 2014, we issued and sold an aggregate of 40,000,000 common shares, par value $0.01 per share, to certain institutional investors, certain of our executive officers and SSH, in a private offering exempt from registration under the Securities Act, pursuant to a Securities Purchase Agreement, for gross proceeds of $150.0 million. In connection with this transaction, we have also entered into a Registration Rights Agreement with the purchasers in the offering, pursuant to which we have filed a registration statement under the Securities Act covering the resale of common shares held by the investors. We expect use the net proceeds of this offering to fund installment payments due under our Newbuilding Program.

Cash Flow

During the year ended December 31, 2014, we used $50.3 million in operating activities and recorded a net loss of $116.6 million, which was partially offset by noncash adjustments in the aggregate amount of $80.2 million which consisted primarily of $55.5 million related to a write down on assets held for sale and restricted stock amortization of $23.9 million. Use of cash in operating activities also reflects an increase in working capital items of $14.0 million, associated with commencing the Company’s principal operations of operating a fleet of drybulk carriers. The Company had no principal operations during 2013.

During the year ended December 31, 2014, the Company used $682.8 million in investing activities compared to $371.7 million during the period from March 20, 2013 (date of inception) to December 31, 2013. Most of this use of cash during 2014, and all of the use of cash in 2013, related to payments to shipyards for the construction of the Company’s fleet. During the year ended December 31, 2014, the Company paid $651.5 million to shipyards where its vessels are being constructed, third parties from whom the Company acquired existing construction, capitalized interest, and costs incurred with getting vessels delivered from the shipyards ready for their initial voyage. During the period from March 20, 2013 (date of inception) to December 31, 2013, the Company made payments of $371.7 million to shipyards where its vessels are being constructed and to third parties from whom the Company acquired existing construction. In addition, during the year ended December 31, 2014, the Company paid $31.3 million to Scorpio Tankers relating to its agreement to purchase four of the LR2 contracts and its option to purchase two additional LR2 contracts as a security deposit relating to estimated costs we would incur to the shipyard for converting the vessels from Capesize contracts to LR2 contracts and scheduled installments on vessels expected to occur prior to the closing date of the sale. This deposit is reimbursable to us upon closing.

During the year ended December 31, 2014 and for the period from March 20, 2013 (date of inception) to December 31, 2014, the Company had cash provided by financing activities of $271.9 million and $1,107.8 million, respectively. A summary of cash provided by financing activities is as follows:

• During the year ended December 31, 2014, the Company received $187.6 million from the issuance of 4,695,000 shares of common stock in January 2014 pursuant to the underwriters exercising their overallotment from the Company’s initial public offering of December 12, 2013 and 40,000,000 shares of common stock issued in a private placement transaction in November 2014. During the period from March 20, 2013 (date of inception) to December 31, 2013, the Company received $1,107.8 million from the issuance of 97,240,411 shares of common stock in three private placement transactions in July 2013, September 2013 and November 2013 and 31,300,000 shares of our common stock issued in the Company’s initial public offering in December 2013.

• During the year ended December 31, 2014, the Company received $33.6 million of proceeds in November 2014 from borrowings under the $39.6 Million Senior Secured Credit Facility and received proceeds of $73.6 million in September 2014 and October 2014 from the issuance of Senior Notes.

• During the year ended December 31, 2014, the Company paid $22.9 million of debt issue costs primarily related to the Senior Notes and credit facilities that closed during 2014.

Credit Facilities and Unsecured Notes

$67.5 Million Senior Secured Credit Facility

On July 30, 2014, we entered into a $67.5 million credit facility with a leading European financial institution. The proceeds of this facility are expected to fund a portion of the purchase price of four of the vessels in our Newbuilding Program that secure

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this facility. This facility has a seven year term from the date of delivery of each such vessel securing the loan, with customary financial and restrictive covenants. This facility bears interest at LIBOR plus a margin of 2.95%, and quarterly principal repayments on each tranche are approximately $0.3 million. The $67.5 Million Senior Secured Credit Facility is secured by, among other things, a first priority mortgage on four of the vessels in our Newbuilding Program (two Ultramax and two Kamsarmax), and a parent company guarantee.

$330.0 Million Senior Secured Credit Facility

On July 29, 2014, we entered a $330.0 million senior secured credit facility with Credit Agricole Corporate and Investment Bank and Deutsche Bank AG London to finance a portion of the purchase price of 22 of the vessels in our Newbuilding Program. This facility bears interest at LIBOR plus a margin of 2.925% and has a term of seven years. This facility is secured by, among other things, a first preferred cross-collateralized mortgage on each of 22 of our newbuilding vessels (consisting of 16 Ultramax drybulk carriers and six Kamsarmax drybulk carriers) and guaranteed by each of the collateral vessel owning subsidiaries. We expect that we will draw under this facility upon the delivery of each collateral vessel in an amount not to exceed the lesser of 60% of the fair market value of such vessel or a stated drawdown amount until December 31, 2016.

$39.6 Million Senior Secured Credit Facility

On June 27, 2014, we entered into a $39.6 million senior secured credit facility with NIBC Bank N.V. to finance a portion of the market value of two of the vessels in our Newbuilding Program that secure this facility. This facility bears interest at LIBOR plus a margin of 2.925% and has a term of five years. This facility is secured by, among other things, a first priority mortgage on two of the vessels in our Newbuilding Program (two Kamsarmax) and guaranteed by each of the collateral vessel owning subsidiaries. As of December 31, 2014, the outstanding balance on this facility was approximately $33.6 million.

$409.0 Million Senior Secured Credit Facility

On December 30, 2014, we entered into a $409.0 million senior secured credit facility with Nordea Bank Finland PLC, New York Branch, and Skandinaviska Enskilda Banken AB (publ). The proceeds of this facility are expected to finance a portion of the purchase price of 20 of the vessels in our Newbuilding Program (six Ultramax, nine Kamsarmax, and five Capesize vessels) with expected deliveries in 2015 and 2016. This facility bears interest at LIBOR plus a margin of 3.00% and has a term of six years. This facility is secured by, among other things, a first preferred mortgage on each of the 20 newbuilding vessels and guaranteed by each of the collateral vessel owning subsidiaries.

$240.3 Million Senior Secured Credit Facility 

On January 15, 2015, we entered into a $411.3 million senior secured credit facility with a group of financial institutions, which was subsequently reduced on March 26, 2015 by $171.0 million to $240.3 million due to the removal from financing under this facility of five Capesize newbuilding vessels that we have agreed to convert into product tankers. The proceeds of this facility are expected to finance a portion of the purchase price of seven Capesize vessels in our Newbuilding Program that are under construction at Sungdong. This facility is secured by, among other things, a first preferred mortgage on the seven Capesize newbuilding vessels and guaranteed by each of the collateral vessel owning subsidiaries. Portions of this facility bear interest at LIBOR plus an applicable margin of between 1.90% and 2.95% and a portion has a fixed coupon of 6.25%. The facility matures six years from the delivery of the final vessel securing the facility, and in certain circumstances, the facility matures 12 years after the delivery of each financed vessel. The terms and conditions of the facility, including covenants, are similar to those in our existing credit facilities and customary for financings of this type.

$42.0 Million Senior Secured Credit Facility

On January 30, 2015, we entered into a $42.0 million credit facility with a leading European financial institution. The proceeds of this facility are expected to finance a portion of the purchase price of two Kamsarmax vessels in our Newbuilding Program (of which one Kamsarmax vessel was delivered in January 2015 to us from Imabari and one Kamsarmax vessel is under construction at Imabari). The facility may be drawn in two tranches, each of which has a final maturity of six years from the date of the respective vessel delivery from the yard. This facility bears interest at LIBOR plus a margin of 2.80%. This facility is secured by, among other things, a first preferred mortgage on the two Kamsarmax newbuilding vessels and guaranteed by each of the collateral vessel owning subsidiaries. The terms and conditions of the facility, including covenants, are similar to those in our existing credit facilities and customary for financings of this type.

$26.0 Million Senior Secured Credit Facility

On February 27, 2015, we entered into a $26.0 million senior secured credit facility with ABN AMRO Bank N.V., the Netherlands. The proceeds of this facility were used to finance a portion of the purchase price of one Capesize vessel, which was

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delivered to us during the first quarter of 2015. This facility matures at the earlier of (a) the date falling six months after the drawdown date; and (b) the date ten business days after the date on which the Chinese Ministry of Finance has approved insurance coverage to be provided by the China Export & Credit Insurance Corporation, or Sinosure, with respect to our $230.3 Million Credit Facility (discussed below) and drawings can be made under such facility. This facility bears interest at LIBOR plus an initial margin of 2.00%, with monthly step ups of 0.25% in margin until a margin of 3.25% is reached. This facility is secured by, among other things, a first preferred mortgage on the Capesize newbuilding vessel and guaranteed by the collateral vessel owning subsidiary. The terms and conditions of the facility, including covenants, are similar to those in our existing credit facilities and customary for financings of this type.

$19.8 Million Senior Secured Credit Facility

On March 2, 2015, we entered into a senior secured credit facility for up to $19.8 million. The facility was previously announced as a $39.6 million credit facility, that has now been reduced to a size of $19.8 million due to the removal of the financing on one Kamsarmax vessel which we have classified as held for sale. The facility was arranged by ABN AMRO Bank N.V., the Netherlands, with insurance cover provided from Sinosure. The facility is expected to be used to finance a portion of the purchase price of one Kamsarmax vessel currently under construction at Tsuneishi with expected delivery during the first quarter of 2016. The facility matures ten years from the date of delivery of the vessel and bears interest at LIBOR plus a margin of 2.50%. This facility is secured by, among other things, a first priority mortgage on one Kamsarmax newbuilding vessel and guaranteed by the collateral vessel owning subsidiary. The terms and conditions of the facility, including covenants, are similar to those in our existing credit facilities and customary for financings of this type.

$230.3 Million Senior Secured Credit Facility

On March 2, 2015, we received a commitment from ABN AMRO Bank N.V. and The Export-Import Bank of China, for a loan facility of up to $230.3 million. This commitment finalizes a previously announced memorandum of understanding for a $234.9 million credit facility. This facility was arranged by ABN AMRO Bank N.V., The Netherlands, with insurance cover to be provided from Sinosure. This facility is expected to be used to finance a portion of the purchase price of seven Capesize vessels (of which one vessel was delivered to us in February 2015 from Waigaoqiao and six vessels are currently under construction at Waigaoqiao with expected deliveries between the third quarter of 2015 and the second quarter of 2016). The terms and conditions of this facility, including covenants, will be similar to those in our existing credit facilities and customary for financings of this type. This facility is subject to customary conditions precedent and the execution of definitive documentation. The creditfacility is pending approval from the Chinese Ministry of Finance on the insurance coverage to be provided by Sinosure.

As of March 30, 2015, we had $139.0 million of outstanding borrowings under the credit agreements described above and have additional available borrowings, after repaying the $26.0 Million Senior Secured Credit Facility with a portion of the proceeds from the $230.3 Million Senior Secured Credit Facility, of $1,231.9 million as shown in the following table (dollars in thousands):

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	As of December 31, 2014		As of March 30, 2015
	Amount outstanding		Amount outstanding		Amount available
$39.6 Million Senior Secured Credit Facility	$	33,550	$	32,725	$	—
$408.976 Million Senior Secured Credit Facility	—		14,988		393,988
$330 Million Senior Secured Credit Facility	—		45,000		285,000
$42 Million Senior Secured Credit Facility	—		20,302		21,000
$19.8 Million Senior Secured Credit Facility	—		—		19,800
$67.5 Million Senior Secured Credit Facility	—		—		67,500
$240.3 Million Senior Secured Credit Facility	—		—		240,264
$230.3 Million Senior Secured Credit Facility	—		—		230,325
$26.0 Million Senior Secured Credit Facility	—		26,000		—
Total	$	33,550	$	139,015	1,257,877
Repayment of the $26.0 Million Senior Secured Credit Facility					(26,000		)
Total available					$	1,231,877

Loan Covenants

Certain of our credit facilities discussed above have, among other things, the following financial covenants which require us to:

• maintain minimum consolidated liquidity of not less than the greater of (i) $50.0 million or (ii) $850,000 per vessel owned by us or any of our subsidiaries;

• maintain consolidated tangible net worth of not less than $500.0 million, plus (i) 25% of our consolidated net income for each fiscal quarter and (ii) 50% of the value of the equity proceeds we received from the sale of our common shares as of December 31, 2013;

• maintain a ratio of net debt (which means our total indebtedness less cash) to consolidated total capitalization (which means consolidated tangible net worth plus, among other things, our consolidated indebtedness) of 60% or less;

• maintain a ratio of consolidated EBITDA to consolidated net interest expense calculated on a trailing four quarter basis of not less than 1.0 to 1.0 for the quarter ending September 30, 2015 until and including the quarter ending December 31, 2016, 2.0 to 1.0 for the quarter ending March 31, 2017 until and including the quarter ending December 31, 2017, and thereafter 2.5 to 1.0; and

• maintain a minimum fair value of the collateral for each credit facility, such that the aggregate fair value of the vessels collateralizing the credit facility be at least between 130% to 145%, depending on the credit facility, of the aggregate principal amount outstanding under such credit facility.

Our credit facilities discussed above have, among other things, the following restrictive covenants which would restrict our ability to:

• incur additional indebtedness;

• sell the collateral vessel, if applicable;

• make additional investments or acquisitions;

• pay dividends, in the event of a default, or if an event of default would occur as a result of the payment of dividends; and

• effect a change of control of us.

In addition, our credit facilities contain customary events of default, including cross-default provisions. As of December 31, 2014, we are in compliance with all of the financial covenants contained in the four credit facilities that we had entered into as of that date.

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Senior Notes due 2019

On September 22, 2014, we issued $65.0 million aggregate principal amount of our 7.50% senior unsecured notes due 2019, or our Notes, in a registered public offering. The Notes will mature on September 15, 2019, and may be redeemed in whole or in part at any time, or from time to time, after September 15, 2016. Interest on the Notes is payable quarterly on each of March 15, June 15, September 15 and December 15, commencing on December 15, 2014. We expect to use the net proceeds we received to fund installment payments due under our Newbuilding Program. On October 16, 2014, we issued an additional $8.625 million aggregate principal amount of our Notes, pursuant to the underwriters’ option to purchase additional Notes. Our 7.50% senior unsecured notes due 2019 commenced trading on the NYSE on September 29, 2014 under the symbol “SLTB.”

The indenture governing our Notes contains certain restrictive covenants, including:

(a) Limitation on Borrowings. We are prohibited from letting net borrowings equal or exceed 70% of our total assets, which are calculated as all of our assets of the types presented on our consolidated balance sheet.

(b) Limitation on Minimum Tangible Net Worth. The Company shall ensure that net worth always exceeds $500 million.

(c) Reports. Following any cross default, the Company shall promptly notify the holders of the our Notes of the occurrence of such cross default.

(d) Limitation on Asset Sales. We shall not, and shall not permit any subsidiary to, in the ordinary course of business or otherwise, sell, lease, convey, transfer or otherwise dispose of any of our of any such subsidiary’s assets (including capital stock and warrants, options or other rights to acquire capital stock) other than pursuant to a “Permitted Asset Sale” or a “Limited Permitted Asset Sale” (as such terms are defined in the indenture governing the our Notes and described below), unless (A) the Company receives, or the relevant subsidiary receives, consideration at the time of such asset sale at least equal to the fair market value (including as to the value of all non-cash consideration), as determined in good faith by the board of directors of the Company, of the assets subject to such asset sale, and (B) within 365 days after the receipt of any net proceeds from an asset sale, the Company or the relevant subsidiary, as the case may be, shall apply all such net proceeds to certain permitted purposes, including the repayment of secured indebtedness, capital expenditures, repayment of unsecured indebtedness, acquire all or substantially all of the assets or, or the capital stock of, a person primarily engaged in a permitted business; provided, that in the case of the acquisition of capital stock of any person, such person is or becomes a subsidiary of the Company.

For purposes of this covenant: a “Permitted Asset Sale” includes certain specified asset sales, certain vessel losses not to exceed 10% of the consolidated aggregate market value of the Company’s assets and any transaction or series of transactions involving assets disposed of for fair market value and having an aggregate market value in any one fiscal year of up to 25% of the consolidated aggregate market value of the Company’s assets; and a “Limited Permitted Asset Sale” includes any transaction or series of transactions during a single fiscal year, the net proceeds of which are not otherwise applied pursuant to the requirements set forth in this clause (d), that results in net proceeds in excess of 25% of the consolidated aggregate market value of the Company’s assets.

As of December 31, 2014, we were in compliance with the financial covenants of our Notes.

If a Limited Permitted Asset Sale occurs, the Company must make an offer to purchase our Notes having a principal amount equal to the excess proceeds of such Limited Permitted Asset Sale at a purchase price of 101% of the principal amount of our Notes to be purchased, plus accrued and unpaid interest.

In addition, if a Change of Control (as defined in the Indenture for the Senior Notes) occurs, holders of the our Notes have the right, at their option, to require us to purchase any or all of such holders’ our Notes at a purchase price of 101% of the principal amount of the our Notes to be purchased, plus accrued and unpaid interest.

In addition, if an event of default or an event or circumstance which, with the giving of any notice or the lapse of time, would constitute an event of default under the our Notes has occurred and is continuing, or we are not in compliance with the covenant described under “Limitation on Borrowings” or “Limitation on Minimum Net Worth” described above, then none of the Company or any subsidiary will be permitted to declare or pay any dividends or return any capital to its equity holders (other than the Company or a wholly-owned subsidiary of the Company) or authorize or make any other distribution, payment or delivery of property or cash to its equity holders (other than the Company or a wholly-owned subsidiary of the Company), or redeem, retire, purchase or otherwise acquire, directly or indirectly, for value, any interest of any class or series of its equity interests (or acquire any rights, options or warrants relating thereto but not including convertible debt) now or hereafter outstanding and held by persons other than the Company or any wholly-owned subsidiary, or repay any subordinated loans to equity holders (other than the Company or a wholly-owned subsidiary of the Company) or set aside any funds for any of the foregoing purposes.

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C. Research and Development, Patents and Licenses, Etc.

Not applicable.

D. Trend Information

See “Item 4. Information on the Company—B. Business Overview—Industry and Market Conditions.”

E. Off-Balance Sheet Arrangements

As of December 31, 2014, we did not have any off-balance sheet arrangements. Currently, we are committed to make charter-hire payments to third parties for certain chartered-in vessels. These arrangements are accounted for as operating leases.

F. Tabular Disclosure of Contractual Obligations

 The following table sets forth our total contractual obligations at December 31, 2014:

(in millions of U.S. dollars)	Less than 1 year		1 to 3 years		3 to 5 years		More than 5 years		Total
Vessels under construction (1)	$	1,181.1	$	633.3	$	—	$	—	$	1,814.4
Assets held for sale (2)	92.9		202.4		—		—		295.3
Time charter-in commitments (3)	55.0		41.4		0.4		—		96.8
Senior Notes (4)	—		—		73.6		—		73.6
Bank loans (5)	3.3		5.6		24.7		—		33.6
Interest payments (6)	6.5		12.8		10.5		—		29.8
Commitment fees (7)	7.6		1.3		—		—		8.9
Commercial management fee (8)	0.2		0.2		—		—		0.4
Technical management fee (9)	0.4		0.4		—		—		0.8
Total	$	1,347.0	$	897.4	$	109.2	$	—	$	2,353.6

(1) Represents the unpaid installments as of December 31, 2014 of the 71 vessels we had under construction as of that date, which includes the six vessels delivered to us in 2015 and includes the construction contracts of three Capesize vessels subsequently converted into LR2 tankers which we intend to sell.

(2) Represents the unpaid installments as of December 31, 2014 relating to the seven contracts for the construction of vessels that we had classified as assets held for sale as of December 31, 2014. Such amounts include installments actually paid thus far in 2015 as well as installments related to the terms of the six contracts for the construction of Capesize vessels that have been modified to LR2 tankers. Until these contracts are sold, the Company is obligated to make the future contractual payments.

(3) Represents the amounts expected to be paid by us on the 20 vessels that we have time chartered-in as of December 31, 2014, assuming we redeliver the vessels to their owners on the earliest redelivery date or actual redelivery date and excluding any option periods which may be exercised by us.

(4) Represents the repayment of our Notes which mature in September 2019.

(5) Represents the repayment of installments under the bank loans outstanding as of December 31, 2014, which consisted solely of borrowings under the $39.6 Million Senior Secured Credit Facility.

(6) Represents the interest payments on outstanding balances of our Notes at 7.50% per annum and bank loans, for which the LIBOR rate in effect as of December 31, 2014 of 0.2356% plus a margin of 2.925%.

(7) Represents the commitment fees we will pay under our three credit facilities at December 31, 2014 on which we are incurring commitment fees (the $67.5 Million Senior Secured Credit Facility, the $330.0 Million Senior Secured Senior Secured Credit Facility and the $409.0 Million Senior Secured Credit Facility). Such fees are calculated on the undrawn portion of these credit facilities and assume that the committed amount of each vessel will be drawn when the vessel collateralizing the credit facility is delivered from the shipyards.

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(8) Represents the commercial management fee we pay to SCM of $300 per day for each vessel that we own based on the two vessels we owned as of December 31, 2014.

(9) Represents the annual technical management fee we pay to SSM of $200,000 per vessel that we own based on the two vessels we owned as of December 31, 2014.

This table does not include (i) vessel management fees and expenses, which will be incurred starting with the delivery of the first vessel we time chartered-in and (ii) payments that we expect to make under our credit facilities we expect to enter into.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

Set forth below are the names, ages and positions of our directors and executive officers. Our board of directors is elected annually on a staggered basis, and each director elected holds office for a three year term or until his successor shall have been duly elected and qualified, except in the event of his death, resignation, removal or the earlier termination of his term of office. The initial term of office of each director is follows: our Class A directors will serve for a term expiring at the 2017 annual meeting of shareholders, our Class B directors will serve for a term expiring at the 2015 annual meeting, and our Class C directors will serve for a term expiring at the 2016 annual meeting. Officers are elected from time to time by vote of our board of directors and hold office until a successor is elected. The business address of each of our directors and executive officers listed below is Scorpio Bulkers Inc., 9, Boulevard Charles III, MC 98000 Monaco.

Name	Age	Position
Emanuele A. Lauro	36	Chairman, Class A Director and Chief Executive Officer
Robert Bugbee	54	Class B Director and President
Cameron Mackey	46	Chief Operating Officer
Hugh Baker	47	Chief Financial Officer
Roberto Giorgi	64	Class A Director
Einar Michael Steimler	66	Class B Director
Christian M. Gut	35	Class C Director
Sergio Gianfranchi	70	Vice President, Vessel Operations
Luca Forgione	38	General Counsel
Anoushka Kachelo	35	Secretary

Biographical information concerning the directors and executive officers listed above is set forth below.

Emanuele A. Lauro, Chairman and Chief Executive Officer

Emanuele A. Lauro, the Company’s co-founder, has served as our Chairman and Class A Director since April 9, 2013 and as our Chief Executive Officer since July 1, 2013. Mr. Lauro also serves and has served as Chairman and Chief Executive Officer of Scorpio Tankers (NYSE: STNG) since its initial public offering in April 2010. He joined Scorpio Group in 2003 and has continued to serve there in a senior management position since 2004. Under Mr. Lauro’s leadership, Scorpio Group has grown from an owner of three vessels in 2003 to become a leading operator and manager of over 200 vessels in 2015. Over the course of the last several years, Mr. Lauro has founded and developed all of the Scorpio Group Pools in addition to several other ventures such as Scorpio Logistics, which owns and operates specialized assets engaged in the transshipment of dry cargo commodities and invests in coastal transportation and port infrastructure developments in Asia and Africa since 2007. Mr. Lauro has a degree in international business from the European Business School, London.

Robert Bugbee, President and Director

Robert Bugbee, the Company’s co-founder, has served as our Class B Director since April 9, 2013 and as our President since July 1, 2013. Mr. Bugbee has more than 25 years of experience in the shipping industry. Mr. Bugbee also serves and has served as President and Director of Scorpio Tankers since its initial public offering in April 2010. He joined Scorpio Group in February 2009 and has continued to serve there in senior management. Prior to joining Scorpio Group, Mr. Bugbee was a partner at Ospraie Management LLP between 2007 and 2008, a company which advises and invests in commodities and basic industry. From 1995 to 2007, Mr. Bugbee was employed at OMI Corporation, or OMI, a NYSE-listed tanker company sold in 2007. While

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at OMI, Mr. Bugbee served as President from January 2002 until the sale of the company, and before that served as Executive Vice President since January 2001, Chief Operating Officer since March 2000 and Senior Vice President of OMI from August 1995 to June 1998. Mr. Bugbee joined OMI in February 1993. Prior to this, he was employed by Gotaas-Larsen Shipping Corporation since 1984. During this time he took a two year sabbatical from 1987 for the M.I.B. Program at the Norwegian School for Economics and Business administration in Bergen. He has a Fellowship from the International Shipbrokers Association and a B.A. (Honors) from London University.

Cameron Mackey, Chief Operating Officer

Cameron Mackey has served as our Chief Operating Officer since July 1, 2013. Mr. Mackey also serves and has served as Chief Operating Officer of Scorpio Tankers since its initial public offering in April 2010 and as a Director since May 2013. He joined Scorpio Group in March 2009, where he continues to serve in a senior management position. Prior to joining Scorpio Group, he was an equity and commodity analyst at Ospraie Management LLC from 2007 to 2008. Prior to that, he was Senior Vice President of OMI Marine Services LLC from 2004 to 2007 and in Business Development at OMI from 2002 to 2004. He has been employed in the shipping industry since 1994 and, earlier in his career, was employed in unlicensed and licensed positions in the merchant navy, primarily on tankers in the international fleet of Mobil Oil Corporation, where he held the qualification of Master Mariner. He has an M.B.A. from the Sloan School of Management at the Massachusetts Institute of Technology, a B.S. from the Massachusetts Maritime Academy and a B.A. from Princeton University.

Hugh Baker, Chief Financial Officer

Hugh Baker has served as our Chief Financial Officer since July 1, 2013. Mr. Baker also serves and has served as a Managing Director of Scorpio USA LLC since July 2012, focusing on business development and finance for Scorpio Tankers and the Scorpio Group. For three years prior to joining Scorpio, Mr. Baker was a Managing Director in the investment banking team at Evercore Partners in New York, concentrating on the shipping industry. Prior to Evercore, he was the Head of Shipping at HSH Nordbank in New York and was previously a Managing Director in the ship finance team at ING Bank in London. Prior to banking, Mr. Baker worked in commercial roles for Greek-owned shipping companies in London. Mr. Baker has a BA from the London School of Economics and a MSc in Shipping, Trade & Finance from Cass Business School. Mr. Baker is a Fellow of the Institute of Chartered Shipbrokers.

Roberto Giorgi, Director

Roberto Giorgi has served as our Class A Director since the closing of our initial public offering in December 2013. Mr. Giorgi also serves and has served since January 2014 as the Honorary President and member of the Group Executive of V.Ships, the world’s largest ship management company. From 1988 to 2014, Mr. Giorgi has held various roles within V.Ships, including President of V.Ships Ship Management, Managing Director of V.Ships New York, head of V.Ships Leisure in the cruise sector, and head of V.Ship’s ship management operation from its Monaco office. From 2008 to 2010, Mr. Giorgi also served as President of InterManager, the international trade association for third-party and in-house ship managers, whose members between them are responsible for approximately 3,700 ships and more than 200,000 crew members. Prior to joining the V.Ships Group, he attended the San Giorgio Nautical College in Genoa (1964 – 1969) and sailed from Deck Cadet to First Officer with Navigazione Alta Italia, Italian line and Sitmar Cruises. Before joining the merchant marine, he spent one year (1970/71) in the Naval Academy of Leghorn and sailed with the Italian Navy as Lieutenant. In addition, since June 2013 Mr. Giorgi has been on the committee of Skuld P&I Club.

Einar Michael Steimler, Director

Einar Michael Steimler has served as our Class B Director since the closing of our initial public offering in December 2013. Mr. Steimler also serves as a director of DHT Holdings Inc. (NYSE:DHT). Mr. Steimler has over 30 years of experience in the shipping industry. From 2000 to 2011, Mr. Steimler served as chairman of Tanker (UK) Agencies, the commercial agent to Tankers International. He was instrumental in the formation of Tanker (UK) Agencies in 2000 and served as its Chief Executive Officer until the end of 2007. From 1998 to 2010, Mr. Steimler served as a Director of Euronav NV (EURN:EN Brussels). He has been involved in both sale and purchase and chartering brokerage in the tanker, gas and chemical sectors and was a founder of Stemoco, a Norwegian ship brokerage firm. He graduated from the Norwegian School of Business Management in 1973 with a degree in Economics.

Christian M. Gut, Director

Christian M. Gut has served as our Class C Director since the closing of our initial public offering in December 2013. Mr. Gut has ten years of experience in the consulting industry in the Asia Pacific region. Mr. Gut started his professional career at ThyssenKrupp Technologies AG (as it then was) in Essen, Germany in 2002. He later joined Singapore based EABC Pte Ltd.,

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or EABC, in 2003 where he was appointed as Director on May 18, 2006. EABC’s services comprise market intelligence and strategy, sales promotion and support to project management in selected Asia Pacific countries, principally Australia. Furthermore, Mr. Gut is a co-founder and past manager of the Stellar Energy Fund, launched in Singapore in 2006, which invested in energy focused private companies to finance projects and expansion plans in Asia, Middle East and Europe in the following industries: oil trading and bunkering, gas E&P, solar, geothermal and power generating heat plants. Mr. Gut has a Bachelor’s degree in international business from the European Business School in London.

Sergio Gianfranchi, Vice President, Vessel Operations

Sergio Gianfranchi has served as our Vice President of Vessel Operations since September 19, 2013. Mr. Gianfranchi also serves and has served as Vice President, Vessel Operations of Scorpio Tankers since its initial public offering in April 2010. He served as Operations Manager of SSM at its headquarters in Monaco from 2002 to 2004. He has been instrumental in launching and operating the Scorpio Group Pools, and was employed as the Fleet Manager of SCM, the Scorpio Group affiliate that manages the commercial operations of over 100 vessels grouped in the Scorpio Group Pools. Mr. Gianfranchi is currently employed as the Pool Fleet Manager of SCM. From 1999 to 2001, Mr. Gianfranchi served as the on-site owner’s representative of the Scorpio Group affiliates named Doria Shipping, Tristan Shipping, Milan Shipping and Roma Shipping, to survey the construction of their Panamax and Post-Panamax newbuilding tankers being built at the 3Maj Shipyard in Rijeka, Croatia. When Mr. Gianfranchi joined SSM in 1989, he began as vessel master of its OBOs (multipurpose vessels that carry ore, heavy drybulk and oil). Upon obtaining his Master Mariner License in 1972, he served until 1989 as a vessel master with prominent Italian shipping companies, including NAI and Almare, initially a subsidiary of NAI but later controlled by Finmare, the Italian state shipping financial holding company. In this position he served mostly on OBOs, tankers and drybulk carriers. He graduated from La Spezia Nautical Institute in Italy in 1963.

Luca Forgione, General Counsel

Luca Forgione has served as our General Counsel since July 1, 2013 and as our Secretary from July 1, 2013 to December 18, 2013. Mr. Forgione also serves and has served as General Counsel of Scorpio Tankers since its initial public offering in April 2010 and has served as Secretary until December 2013. He joined Scorpio Group in August 2009 where he continues to serve as General Counsel. He is licensed as a lawyer in his native Italy and as a Solicitor of the Supreme Court of England & Wales. Mr. Forgione has more than ten years of shipping industry experience and has worked in the fields of shipping, offshore logistics, commodity trading and energy since the beginning of his in-house career, most recently with Constellation Energy Commodities Group Ltd. in London, part of Constellation Energy Group Inc. then listed on the NYSE under “CEG” and now part of Exelon (NYSE: EXC) from 2007 to 2009, and previously with Coeclerici S.p.a. in Milan from 2004 to 2007. He has experience with all aspects of the supply chain of drybulk and energy commodities (upstream and downstream), and has developed considerable understanding of the regulatory and compliance regimes surrounding the trading of physical and financial commodities as well as the owning, managing and chartering of vessels. Mr. Forgione was a Tutor in International Trade Law and Admiralty Law at University College London (U.K.) and more recently a Visiting Lecturer in International Trade Law at King’s College (U.K.). He has a Master’s Degree in Maritime Law from the University of Southampton (U.K.) and a Law Degree from the University of Genoa (Italy).

Anoushka Kachelo, Secretary

Anoushka Kachelo has served as our Secretary since December 18, 2013. Mrs. Kachelo also serves as Secretary of Scorpio Tankers. She joined Scorpio Group in September 2010 as Senior Legal Counsel. Mrs. Kachelo is a Solicitor of the Supreme Court of England & Wales and has worked in the fields of commodity trading, energy and asset finance. Prior to joining the Scorpio Group, Mrs. Kachelo was Legal Counsel for the Commodities Team at JPMorgan (London) and prior to that in private practice for the London office of McDermott Will & Emery and Linklaters. She has a BA in Jurisprudence from the University of Oxford (U.K.).

B. Compensation

For the period from March 20, 2013 (our inception) to December 31, 2013, we paid compensation to our directors and senior management of approximately $1.8 million. These amounts have been accruing since July 2013.

Beginning January 2014, each of our non-employee directors receive cash compensation in the aggregate amount of $60,000 annually, plus either (i) an additional fee of $10,000 per year for each committee on which a director serves or (ii) an additional fee of $20,000 per year for each committee for which a director serves as Chairman. In addition, our lead independent director receives an additional fee of $20,000 per year. All actual expenses incurred while acting in their capacity as a director are reimbursed. For each board or committee meeting the non-employee director attends, the director receives $2,000. We do not have

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a retirement plan for our officers or directors. For the year ended December 31, 2014, we paid an aggregate compensation to our directors and senior management of approximately $4.9 million.

We have employment agreements with each of our executives. These employment agreements remain in effect until terminated in accordance with their terms upon no less than 24 months prior written notice. Pursuant to the terms of their respective employment agreements, our executives are prohibited from disclosing or unlawfully using any of our material confidential information.

Upon a change in control of us, the annual bonus provided under the employment agreement becomes a fixed bonus of between 150% and 250% of the executive’s base salary, depending on the terms of the employment agreement applicable to each executive.

Any such executive may be entitled to receive upon termination an assurance bonus equal to such fixed bonus and an immediate lump-sum payment in an amount equal to up to three times the sum of the executive’s then current base salary and the assurance bonus. If an executive’s employment is terminated for cause or voluntarily by the employee, he shall not be entitled to any salary, benefits or reimbursements beyond those accrued through the date of his termination, unless he voluntarily terminated his employment in connection with certain conditions. Those conditions include a change in control combined with a significant geographic relocation of his office, a material diminution of his duties and responsibilities, and other conditions identified in the employment agreement.

We believe that it is important to align the interests of our directors and management with that of our shareholders. In this regard, we have determined that it will generally be beneficial to us and to our shareholders for our directors and management to have a stake in our long-term performance. We expect to have a meaningful component of our compensation package for our directors and management consist of equity interests in us in order to provide them on an on-going basis with a meaningful percentage of ownership in us.

Equity Incentive Plan

Our board of directors has adopted an equity incentive plan, which we refer to as the Equity Incentive Plan, under which directors, officers and employees of us and our subsidiaries, as well as employees of affiliated companies are eligible to receive incentive stock options and non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units and unrestricted common shares. As of December 31, 2014 we reserved a total of 7,012,391 common shares, for issuance under the Equity Incentive Plan, subject to adjustment for changes in capitalization as provided in the Equity Incentive Plan. Our Equity Incentive Plan is administered by our Compensation Committee.

Under the terms of the plan, stock options and stock appreciation rights granted under the plan will have an exercise price equal to the fair market value of a common share on the date of grant, unless otherwise determined by the plan administrator, but in no event will the exercise price be less than the fair market value of a common share on the date of grant. Options and stock appreciation rights will be exercisable at times and under conditions as determined by the plan administrator, but in no event will they be exercisable later than ten years from the date of grant.

The plan administrator may grant shares of restricted stock and awards of restricted stock units subject to vesting, forfeiture and other terms and conditions as determined by the plan administrator.

Adjustments may be made to outstanding awards in the event of a corporate transaction or change in capitalization or other extraordinary event. In the event of a “change in control” (as defined in the plan), unless otherwise provided by the plan administrator in an award agreement, awards then outstanding will become fully vested and exercisable in full.

Our board of directors may amend or terminate the plan and may amend outstanding awards, provided that no such amendment or termination may be made that would materially impair any rights, or materially increase any obligations, of a grantee under an outstanding award. Shareholder approval of plan amendments will be required under certain circumstances. Unless terminated earlier by our board of directors, the plan will expire ten years from the date the plan is adopted.

On September 30, 2013, we granted an aggregate of 2,775,000 restricted shares to our officers and employees. Of this total, 1,395,000 restricted shares vest in three equal installments on July 27, 2015, July 27, 2016 and July 27, 2017. The remaining 1,380,000 restricted shares vest in three equal installments on September 30, 2015, September 30, 2016 and September 30, 2017. The aggregate fair value of these awards is $26.9 million, which will be amortized as stock-based compensation expense, a component of general and administrative expense, over the vesting periods of each grant.

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On November 6, 2013, we granted 1,380,000 restricted shares to our officers and employees. These restricted shares vest in three equal installments on November 6, 2015, November 6, 2016 and November 6, 2017. The fair value of these awards was $13.3 million, which will be amortized as stock-based compensation expense, a component of general and administrative expense, over the vesting periods of each grant.

On December 17, 2013, we granted 707,020 restricted shares to our officers, members of the board of directors and employees . Of these restricted shares, 617,020 restricted shares vest in three equal installments on December 17, 2015, December 17, 2016 and December 17, 2017 and 90,000 restricted shares vest in three equal installments on December 17, 2014, December 17, 2015 and December 17, 2016. The fair value of these awards was $6.8 million, which will be amortized as stock-based compensation expense, a component of general and administrative expense, over the vesting periods of each grant.

On February 21, 2014, we granted 2,080,370 restricted shares to our officers, members of the board of directors and employees and certain employees of the Scorpio Group. Of these restricted shares, 1,990,370 restricted shares vest in three equal installments on February 21, 2016, February 21, 2017 and February 21, 2018 and 90,000 restricted shares vest in three equal installments on February 21, 2015, February 21, 2016 and February 21, 2017. The fair value of these awards was $19.4 million, which will be amortized as stock-based compensation expense, a component of general and administrative expense, over the vesting periods of each grant. Please see Note 11 to our Consolidated Financial Statements included herein for additional information.

On May 20, 2014, we granted 68,000 restricted shares to certain employees of the Scorpio Group. These restricted shares vest in three equal installments on February 21, 2016, February 21, 2017 and February 21, 2018. The fair value of these awards was $0.6 million, which will be amortized as stock-based compensation expense, a component of general and administrative expense, over the vesting periods of each grant.

C. Board Practices

Our board of directors currently consists of five directors, three of whom have been determined by our board of directors to be independent under the rules of the New York Stock Exchange and the rules and regulations of the SEC. Our board has an Audit Committee, a Nominating and Corporate Governance Committee and a Compensation Committee, each of which is comprised of our three independent directors, who are Messrs. Giorgi, Steimler and Gut. The Audit Committee, which operates under a charter, among other things, reviews our external financial reporting, engages our external auditors and oversees our internal audit activities, procedures and the adequacy of our internal controls. In addition, provided that no member of the Audit Committee has a material interest in such transaction, the Audit Committee is responsible for reviewing transactions that we may enter into in the future with other members of the Scorpio Group that our board believes may present potential conflicts of interests between us and the Scorpio Group. The Nominating and Corporate Governance Committee is responsible for recommending to the board of directors nominees for director and directors for appointment to board committees and advising the board with regard to corporate governance practices. The Compensation Committee oversees our equity incentive plan and recommends director and senior employee compensation. Our shareholders may also nominate directors in accordance with procedures set forth in our bylaws.

D. Employees

For the year ended December 31, 2014, we had three employees (excluding our executive officers).

Our executive officers are employed by us and our support staff is provided by SSH pursuant to an Administrative Services Agreement. Our technical manager will be responsible for identifying, screening and recruiting, directly or through a crewing agent, the officers and all other crew members for our vessels that are employed by our vessel-owning subsidiaries. Our subsidiaries that will own the vessels in our fleet, indirectly through our technical manager pursuant to the respective technical management agreements, will employ officers and crew members manning such vessels.

E. Share ownership

The common shares beneficially owned by our directors and our executive officers are disclosed in “Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders.”

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.

A. Major shareholders.

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The following table sets forth information regarding beneficial ownership of our common shares for (i) owners of more than five percent of our common shares and (ii) our directors and officers, of which we are aware as of the date of this annual report.

Name	No. of Shares			% Owned (1) (2)
Scorpio Services Holding Limited(2)(9)	5,950,777			3.3	%
Wellington Management Group LLP(7)	18,208,034	(3	)	10.1	%
Avenue Europe International Management, L.P.(8)	2,372,887	(4	)	1.3	%
Avenue Capital Management II, L.P.(8)	14,161,040	(4	)	7.9	%
Blue Mountain Capital Management LLC(8)	12,086,502	(5	)	6.7	%
Blue Mountain Credit Alternatives Master Fund L.P.(8)	8,282,285	(5	)	4.6	%
Aristeia Capital L.L.C.(8)	9,580,000	(6	)	5.3	%
Monarch Alternative Capital LP(8)	10,105,288	(7	)	5.6	%
Directors and executive officers as a group(9)	6,858,390			3.8	%

____________________

(1) Calculated based on 180,299,695 common shares outstanding as of December 31, 2014.

(2) Excludes 2,168,741 common shares payable under the Administrative Services Agreement.

(3) This information is derived from Schedule 13G/A filed with the SEC on March 10, 2015.

(4) This information is derived from Schedule 13G/A filed with the SEC on November 17, 2014.

(5) This information is derived from Schedule 13G/A filed with the SEC on February 5, 2015.

(6) This information is derived from Schedule 13G filed with the SEC on February 17, 2015.

(7) This information is derived from Schedule 13G/A filed with the SEC on December 24, 2014.

(8) Includes common shares held by funds managed thereby.

(9) Emanuele Lauro, our Director and Chief Executive Officer, Robert Bugbee, our Director and President, and Cameron Mackey, our Chief Operating Officer, own 10%, 10% and 7% of Scorpio Services Holdings Limited, respectively.

B. Related Party Transactions

Management of Our Fleet

Commercial and Technical Management Agreements

Our vessels are commercially managed by SCM and technically managed by SSM pursuant to a Master Agreement, which may be terminated by either party upon 24 months notice. SCM and SSM are companies affiliated with us. The vessels we charter-in are also commercially managed by SCM. We expect that additional vessels that we may acquire in the future, including the drybulk vessels in our Newbuilding Program, will also be managed under the Master Agreement or on substantially similar terms.

SCM’s services include securing employment for our vessels in the spot market and on time charters. SCM also manages the Scorpio Group Pools in which our vessels are, or are expected to be employed. For commercial management of any of our vessels that does not operate in one of these pools, we pay SCM a daily fee of $300 per vessel, plus a 1.75% commission on the gross revenues per charter fixture. The Scorpio Group Pool participants, including us and third-party owners of similar vessels, are each expected to pay SCM a pool management fee of $300 per vessel per day, plus a 1.75% commission on the gross revenues per charter fixture. Effective November 20, 2014, SCM has agreed to reduce the 1.75% commission to 1.00% until the first day on which the closing price of our common shares is not less than $9.75 per share, adjusted to include all authorized dividends paid on our share capital.

SSM’s services include providing technical support, such as arranging the hiring of qualified officers and crew, supervising the maintenance and performance of vessels, purchasing supplies, spare parts and new equipment, arranging and supervising drydocking and repairs, and monitoring regulatory and classification society compliance and customer standards. We will pay SSM an annual fee of $200,000 per vessel to provide technical management services for each of the vessels in our Newbuilding Program upon delivery. In addition, representatives of SSM, including certain subcontractors, provide us with construction

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supervisory services while our vessels are being constructed in shipyards. For these services, we compensate SSM for its direct expenses, which can vary between $200,000 and $500,000 per vessel.

Administrative Services Agreement

We have entered into an Administrative Services Agreement with SSH for the provision of administrative staff, office space and accounting, legal compliance, financial and information technology services. SSH is a company affiliated with us. The services provided to us by SSH may be sub-contracted to other entities within the Scorpio Group. Pursuant to the Administrative Services Agreement, we reimburse SSH for the reasonable direct or indirect expenses it incurs in providing us with the administrative services described above and a pro-rata portion of the salary incurred by SSH for an internal auditor. We also pay SSH a fee for arranging vessel acquisitions, including newbuildings, which is payable in our common shares. The amount of common shares payable is determined by dividing $250,000 by the market value of our common shares based on the volume weighted average price of our common shares over the 30 trading day period immediately preceding the contract date of a definitive agreement to acquire any vessel. In November 2014, SSH agreed to waive its fee on vessel acquisitions contracted after November 20, 2014, until the first day on which the closing price of our common shares is not less than $9.75 per share, adjusted to include all authorized dividends paid on our share capital. As of the date of this annual report, we issued an aggregate of 223,638 common shares to SSH in connection with the deliveries of eight of our newbuilding vessels, and expect to issue an additional 1,945,103 common shares to SSH throughout the deliveries of the remaining vessels in our Newbuilding Program.

SSH has agreed with us not to own any drybulk carriers greater than 30,000 dwt for so long as the Administrative Services Agreement is in full force and effect. This agreement may be terminated by SSH after the third anniversary of our initial public offering upon 12 months’ prior written notice or by us with 24 months notice.

Transactions with entities controlled by the Lolli-Ghetti family and with Scorpio Tankers (herein referred to as related party affiliates) in the consolidated statement of operations and balance sheet are as follows:

For the year ended December 31, 2014 and 2013,we had the following balances with related parties, which have been included in the consolidated statement of operations (tabular amounts in thousands of U.S. dollars):

	For the year ended December 31,
	2014		2013
Vessel revenue
Scorpio Kamsarmax Pool (1)	$	34,986	$	—
Scorpio Ultramax Pool (1)	10,196		—
SCM (2)	31		—
Total vessel revenue	$	45,213	$	—
Vessel operating cost:
SSM (3)	$	122	$	—
General and administrative expense:
SCM (2)	148		—
SSM (3)	51		—
SSH (4)	56		—
SUK (5)	717		—
Total general and administrative expense	$	972	$	—

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At December 31, 2014 and 2013, we had the following balances with related parties, which have been included in the consolidated balance sheets (tabular amounts in thousands of U.S. dollars):

	As of		For the period from March 20, 2013 (date of inception) to
	December 31, 2014		December 31, 2013
Assets
Due from related parties-current:
Scorpio Kamsarmax Pool (1)	$	8,482	$	—
Scorpio Ultramax Pool (1)	2,460		—
Scorpio Tankers(6)	31,277		—
SSM (3)	154		—
Total due from related parties-current	$	42,373	$	—
Due from related parties non-current:
Scorpio Kamsarmax Pool (1)	$	3,272	$	—
Scorpio Ultramax Pool (1)	2,033		—
Total due from related parties non-current	$	5,305	$	—
Liabilities
Due to related parties-current:
SUK (5)	$	44	$	—
SSM (3)	1,131		—
SSH (4)	56		—
Total due from related parties-current	$	1,231	$	—

(1) During the year ended December 31, 2014, we earned $35.0 million from chartering our owned and chartered-in vessels to the Scorpio Kamsarmax Pool and $10.2 million from chartering our chartered-in vessels to the Scorpio Ultramax Pool. As of December 31, 2014, we have balances due from these charterers (primarily consisting of working capital, undistributed earnings and reimbursable costs) which have been classified as current assets of $8.5 million and $2.5 million from the Scorpio Kamsarmax Pool and the Scorpio Ultramax Pool, respectively. As of December 31, 2014, there were non-current balances due from these charterers which relate to working capital retained by the pools for member vessels that do not have provisions to exit the pool in the next 12 months of $3.3 million and $2.0 million for the Scorpio Kamsarmax Pool and Scorpio Ultramax pool, respectively.

The Scorpio Kamsarmax Pool and the Scorpio Ultramax Pool were significant customers for the year ended December 31, 2014, accounting 71.4%and 20.8% of our total vessel revenue, respectively.

(2) For commercial management of any of our vessels that does not operate in one of these pools, we will pay SCM a daily fee of $300 per vessel, plus a 1.75% commission on the gross revenues per charter fixture. Effective November 20, 2014, SCM has agreed to reduce the1.75% commission to 1.00% until the first day when the closing price of the Company’s common stock is not less than $9.75 per share, adjusted to include all authorized dividends paid on the Company’s share capital, at which time the commission will revert to 1.75% . The Scorpio Ultramax Pool and the Scorpio Kamsarmax Pool participants, including us and third-party owners of similar vessels, pay SCM a pool management fee of $300 per vessel per day, plus a 1.75% commission on the gross revenues per charter fixture. During the year ended December 31, 2014, we recorded $31,000 of vessel revenue relating to SCM, consisting of: (a) a $100,000 reduction in commissions charged to the Scorpio Group Pools pursuant to the decrease of commission SCM receives on gross freight from 1.75% to 1.00% effective November 20, 2014. SCM has agreed to refund to the Company $100,000 as a result of this reduced commission; partially offset by (b) $69,000 of commissions on the gross revenue of certain vessels time chartered-in for which their initial voyage took place before being admitted to the Scorpio Group Pools. In addition, the Company incurred $148,000 of general and administrative expenses to SCM consisting of a fee of $300 per vessel day for the periods in which our time chartered-in vessels were not operating in one of the pools and for fees charged to four time chartered-in vessels which were returned to their owners.

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(3) SSM’s services include providing technical support, such as arranging the hiring of qualified officers and crew, supervising the maintenance and performance of vessels, purchasing supplies, spare parts and new equipment, arranging and supervising drydocking and repairs, and monitoring regulatory and classification society compliance and customer standards. We pay SSM an annual fee of $200,000 per vessel to provide technical management services for each of our vessels upon delivery. For the year ended December 31, 2014, we incurred a cost to SSM for technical support, which is a component of vessel operating costs, of $122,000, none of which is unpaid at December 31, 2014. For the year ended December 31, 2014, we incurred $51,000 of rent allocated from SSM. In addition, representatives of SSM, including certain subcontractors, provide us with construction supervisory services while our vessels are being constructed in shipyards. For these services, we will compensate SSM for its direct expenses, which can vary between $200,000 and $500,000 per vessel. In connection with supervision of 67 of the vessels in our Newbuilding Program, as of December 31, 2014, we incurred a cost to SSM of $29,000 per vessel. Of this aggregate cost of $1.9 million, $1.1 million is unpaid as of December 31, 2014. We also advanced to SSM $154,000 as of December 31, 2014, relating to equipment to be placed on board certain of the Vessels under construction.

(4) We incur a fee to SSH of $300 per day for each owned vessel, which is included in general and administrative expenses, which aggregated $56,000 for the year ended December 31, 2014. As of December 31, 2014 this amount was unpaid.

(5) For the year December 31, 2014, SUK charged us $717,000 for allocated salaries of certain SUK employees relating to the services such employees performed for the Company, of which $44,000 was unpaid as of December 31, 2014.

(6) In December 31, 2014, we agreed to sell four LR2 tankers to Scorpio Tankers and granted Scorpio Tankers an option to purchase two additional LR2 tankers (see Note 7 to our consolidated financial statements). Pursuant to this, we paid Scorpio Tankers $31.3 million as a security deposit relating to estimated costs we would incur to the shipyard for converting the vessels from Capesize contracts to LR2 contracts and scheduled installments on vessels expected to occur prior to the closing date of the sale. This deposit is reimbursable to us upon closing.

Share Issuances

Upon our formation in March 2013, we issued 1,500 common shares to SSH. During July 2013, we issued and sold an additional 1,250,000 common shares to SSH for $10.0 million as part of a series of Norwegian private transactions exempt from registration under the Securities Act, which are subject to a contractual lock-up until July 2014.

In November 2014, certain of our executive officers and SSH purchased an aggregate of 4,146,000 common shares in our November 2014 Private Placement.

C. INTERESTS OF EXPERTS AND COUNSEL

Not applicable.

ITEM 8. FINANCIAL INFORMATION

A. Consolidated Statements and Other Financial Information

See “Item 18. Financial Statements.”

Legal Proceedings

To our knowledge, we are not currently a party to any lawsuit that, if adversely determined, would have a material adverse effect on our financial position, results of operations or liquidity. As such, we do not believe that pending legal proceedings, taken as a whole, should have any significant impact on our financial statements. From time to time in the future we may be subject to legal proceedings and claims in the ordinary course of business, principally personal injury and property casualty claims. While we expect that these claims would be covered by our existing insurance policies, those claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources. We have not been involved in any legal proceedings which may have, or have had, a significant effect on our financial position, results of operations or liquidity, nor are we aware of any proceedings that are pending or threatened which may have a significant effect on our financial position, results of operations or liquidity.

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Dividend Policy

We currently do not intend to pay dividends to the holders of our common shares but rather to invest our available cash in the growth of our fleet and development of our business. We will continue to assess our dividend policy and our board of directors may determine it is in the best interest of the Company to pay dividends in the future. Upon the delivery of one or more vessels in our Newbuilding Program and depending on prevailing charter market conditions, our operating results and capital requirements and other relevant factors, our board of directors will re-evaluate our dividend policy.

The declaration and payment of dividends is subject at all times to the discretion of our board of directors. The timing and amount of dividends, if any, depends on our earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in the loan agreements, the provisions of Marshall Islands law affecting the payment of dividends and other factors.

In addition, since we are a holding company with no material assets other than the shares of our subsidiaries through which we conduct our operations, our ability to pay dividends will depend on our subsidiaries’ distributing to us their earnings and cash flow.

B. Significant Changes.

There have been no significant changes since the date of the consolidated financial statements included in this annual report.

ITEM 9. OFFER AND THE LISTING

A. Offer and Listing Details.

Our common shares have traded on the NYSE since December 12, 2013 under the symbol “SALT.” In addition, during the period from July 3, 2013 through July 31, 2014, our common shares minimally traded on the Norwegian OTC under the symbol “SALT.” The following table sets forth the high and low prices for our common shares for the periods indicated, as reported by the NYSE.

	NYSE
For the Fiscal Year Ended	High (U.S.$)		Low (U.S.$)
December 31, 2014	$	10.73	$	1.76
December 31, 2013 (beginning December 12, 2013)	10.18		9.04

	NYSE
For the Quarter Ended	High (U.S.$)		Low (U.S.$)
March 31, 2015	$	2.76	$	1.31
December 31, 2014	6.08		1.76
September 30, 2014	9.09		5.75
June 30, 2014	10.33		8.30
March 31, 2014	10.73		9.09
December 31, 2013 (beginning December 12, 2013)	10.18		9.04

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	NYSE
For the Month	High (U.S.$)		Low (U.S.$)
March 2015	$	2.76	$	2.09
February 2015	2.55		1.66
January 2015	2.35		1.30
December 2014	3.29		1.76
November 2014	4.95		3.27
October 2014	6.08		4.00
September 2014	8.26		5.75

B. Plan of Distribution

Not applicable

C. Markets

Our common shares have traded on NYSE, since December 12, 2013, under the symbol “SALT,” and our 7.50% Senior Notes due 2019 have traded on the NYSE since September 29, 2014 under the symbol “SLTB.” During the period from July 3, 2013 through July 31, 2014, our common shares minimally traded on the Norwegian OTC under the symbol “SALT.”

D. Selling Shareholders

Not applicable.

E. Dilution

Not applicable.

F. Expenses of the Issue

Not applicable.

ITEM 10. ADDITIONAL INFORMATION

A. Share capital.

Not applicable.

B. Memorandum and Articles of Association.

Our amended and restated articles of incorporation and bylaws have been filed as Exhibit 3.1 and Exhibit 3.2, respectively, to our Registration Statement on Form F-1 (Registration No. 333-192246), declared effective by the Securities and Exchange Commission on December 11, 2013, and are hereby incorporated by reference into this annual report.

Information regarding the rights, preferences and restrictions attaching to each class of our shares is described in the section entitled “Description of Capital Stock” in the accompanying prospectus to our Registration Statement on Form F-3 (File No. 333-201354) declared effective by the Securities and Exchange Commission on January 15, 2015, provided that since the date of such Registration Statement, our total issued and outstanding common shares has increased to 180,470,939 as of the date of this annual report.

Registration Rights Agreements

On December 11, 2013, in connection with our initial public offering, we entered into a registration rights agreement with one of our shareholders, or the IPO Shareholder, pursuant to which we agreed to register for resale up to 10,863,500 of our

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common shares, in accordance with the terms set forth in the agreement, that the IPO Shareholder purchased in one of our Norwegian private placements.

On November 18, 2014, we entered into a registration rights agreement with the purchasers in our November 2014 Private Placement, including the IPO Shareholder, pursuant to which we agreed to register for resale 40,000,000 of our common shares that were purchased in the November 2014 Private Placement, plus the common shares held by the purchasers in the private offering as of November 18, 2014. On January 2, 2015, we filed Form F-3 with the Securities and Exchange Commission for the registration of these shares (File No. 333-201354) and on January 16, 2015, we filed a prospectus supplement related thereto, which included the registration of all, or the remaining portion of, the 10,863,500 common shares discussed above that were previously purchased by the IPO Shareholder.

C. Material contracts.

Attached as exhibits to this annual report are the contracts we consider to be both material and outside the ordinary course of business during the two-year period immediately preceding the date of this annual report. We refer you to “Item 4. Information on the Company”, “Item 6. Directors, Senior Management and Employees—B. Compensation” and “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions” for a discussion of these agreements.

Other than as set forth above, there were no material contracts, other than contracts entered into in the ordinary course of business, to which we were a party during the two year period immediately preceding the date of this annual report.

D. Exchange controls.

Under Marshall Islands law, there are currently no restrictions on the export or import of capital, including foreign exchange controls or restrictions that affect the remittance of dividends, interest or other payments to non-resident holders of our common shares.

E. Taxation

The following is a discussion of the material Marshall Islands and U.S. federal income tax considerations of the ownership and disposition by a U.S. Holder and a Non-U.S. Holder, each as defined below, with respect to the common shares. This discussion does not purport to deal with the tax consequences of owning common shares to all categories of investors, some of which, such as dealers in securities or commodities, financial institutions, insurance companies, tax-exempt organizations, U.S. expatriates, persons liable for the alternative minimum tax, persons who hold common shares as part of a straddle, hedge, conversion transaction or integrated investment, U.S. Holders whose functional currency is not the United States dollar and investors that own, actually or under applicable constructive ownership rules, 10% or more of the Company’s common shares, may be subject to special rules. This discussion deals only with holders who hold the common shares as a capital asset. You are encouraged to consult your own tax advisors concerning the overall tax consequences arising in your own particular situation under U.S. federal, state, local or foreign law of the ownership of common shares. 

Marshall Islands Tax Considerations

In the opinion of Seward & Kissel LLP, the following are the material Marshall Islands tax consequences of our activities to us and of our common shares to our shareholders. We are incorporated in the Marshall Islands. Under current Marshall Islands law, we are not subject to tax on income or capital gains, and no Marshall Islands withholding tax will be imposed upon payments of dividends by us to our shareholders.

U.S. Federal Income Tax Considerations

In the opinion of Seward & Kissel LLP, our U.S. counsel, the following are the material U.S. federal income tax consequences of our activities to us, and of the ownership of common shares to U.S. Holders and Non-U.S. Holders, each as defined below. The following discussion of U.S. federal income tax matters is based on the, Code, judicial decisions, administrative pronouncements, and existing and proposed regulations issued by the U.S. Department of the Treasury, or the Treasury Regulations, all of which are subject to change, possibly with retroactive effect.

U.S. Federal Income Taxation of Operating Income: In General

We anticipate that we will earn substantially all our income from the hiring or leasing of vessels for use on a spot or time charter basis, from participation in a pool or from the performance of services directly related to those uses, all of which we refer to as “shipping income.”

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Unless we qualify from an exemption from U.S. federal income taxation under Section 883 of the Code, or Section 883, as discussed below, a foreign corporation will be subject to U.S. federal income taxation on its “shipping income” that is treated as derived from sources within the United States, to which we refer as “U.S. source shipping income.” For U.S. federal income tax purposes, “U.S. source shipping income” includes 50% of shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States.

Shipping income attributable to transportation exclusively between non-U.S. ports will be considered to be 100% derived from sources entirely outside the United States. Shipping income derived from sources outside the United States will not be subject to any U.S. federal income tax.

Shipping income attributable to transportation exclusively between U.S. ports is considered to be 100% derived from U.S. sources. However, we are not permitted by U.S. law to engage in the transportation that produces 100% U.S. source shipping income.

In the absence of exemption from tax under Section 883, we anticipate that our gross U.S. source shipping income would be subject to a 4% U.S. federal income tax imposed without allowance for deductions, as described below.

Exemption of Operating Income from U.S. Federal Income Taxation

Under Section 883 and the Treasury Regulations thereunder, a foreign corporation will be exempt from U.S. federal income taxation of its U.S. source shipping income if:

(1) it is organized in a “qualified foreign country” which is one that grants an “equivalent exemption” from tax to corporations organized in the U.S. in respect of each category of shipping income for which exemption is being claimed under Section 883; and

(2) one of the following tests is met: (A) more than 50% of the value of its shares is beneficially owned, directly or indirectly, by “qualified shareholders,” which as defined includes individuals who are “residents” of a qualified foreign country, to which we refer as the “50% Ownership Test”; or (B) its shares are “primarily and regularly traded on an established securities market” in a qualified foreign country or in the United States, to which we refer as the “Publicly-Traded Test.”

The Republic of the Marshall Islands, the jurisdiction where we are incorporated, has been officially recognized by the U.S. Internal Revenue Service, or the IRS, as a qualified foreign country that grants the requisite “equivalent exemption” from tax in respect of each category of shipping income we earn and currently expect to earn in the future. Therefore, we will be exempt from U.S. federal income taxation with respect to our U.S. source shipping income if we satisfy either the 50% Ownership Test or the Publicly-Traded Test.

Given the widely held nature of our common shares, we do not currently anticipate circumstances under which we would be able to satisfy the 50% Ownership Test.

Publicly-Traded Test

The Treasury Regulations under Section 883 provide, in pertinent part, that shares of a foreign corporation will be considered to be “primarily traded” on an established securities market in a country if the number of shares of each class of stock that are traded during any taxable year on all established securities markets in that country exceeds the number of shares in each such class that are traded during that year on established securities markets in any other single country. Our common shares, which constitute our sole class of issued and outstanding stock, are “primarily traded” on the NYSE, which is an established market for these purposes.

Under the Treasury Regulations, our common shares will be considered to be “regularly traded” on an established securities market if one or more classes of our shares representing more than 50% of our outstanding stock, by both total combined voting power of all classes of stock entitled to vote and total value, are listed on such market, to which we refer as the “listing threshold.” Our common shares, which constitutes our sole class of issued and outstanding stock, is listed on the NYSE. Accordingly, we will satisfy the listing threshold.

The Treasury Regulations also require that with respect to each class of stock relied upon to meet the listing threshold, (1) such class of stock is traded on the market, other than in minimal quantities, on at least 60 days during the taxable year or one-sixth of the days in a short taxable year, which we refer to as the “trading frequency test”; and (2) the aggregate number of shares of such class of stock traded on such market during the taxable year must be at least 10% of the average number of shares of such class of stock outstanding during such year or as appropriately adjusted in the case of a short taxable year, which we refer to as the “trading volume” test. Even if this were not the case, the Treasury Regulations provide that the trading frequency and trading

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volume tests will be deemed satisfied if, as is expected to be the case with our common shares, such class of stock is traded on an established securities market in the United States and such shares are regularly quoted by dealers making a market in such shares.

Notwithstanding the foregoing, the Treasury Regulations provide, in pertinent part, that a class of shares will not be considered to be “regularly traded” on an established securities market for any taxable year in which 50% or more of the vote and value of the outstanding shares of such class are owned, actually or constructively under specified share attribution rules, on more than half the days during the taxable year by persons who each own 5% or more of the vote and value of such class of outstanding stock, to which we refer as the “5% Override Rule.”

For purposes of being able to determine the persons who actually or constructively own 5% or more of the vote and value of our common shares, or “5% Shareholders,” the Treasury Regulations permit us to rely on those persons that are identified on Schedule 13G and Schedule 13D filings with the Securities and Exchange Commission, as owning 5% or more of our common shares. The Treasury Regulations further provide that an investment company which is registered under the Investment Company Act of 1940, as amended, will not be treated as a 5% Shareholder for such purposes.

In the event the 5% Override Rule is triggered, the Treasury Regulations provide that the 5% Override Rule will nevertheless not apply if we can establish that within the group of 5% Shareholders, qualified shareholders (as defined for purposes of Section 883) own sufficient number of shares to preclude non-qualified shareholders in such group from owning 50% or more of our common shares for more than half the number of days during the taxable year.

We believe that we satisfy the Publicly-Traded Test for the 2014 taxable year and were not subject to the 5% Override Rule, and we intend to take that position on our 2014 U.S. federal income tax returns.

Taxation in Absence of Section 883 Exemption

If the benefits of Section 883 are unavailable, our U.S. source shipping income would be subject to a 4% tax imposed by Section 887 of the Code on a gross basis, without the benefit of deductions, or the “4% gross basis tax regime,” to the extent that such income is not considered to be “effectively connected” with the conduct of a U.S. trade or business, as described below. Since under the sourcing rules described above, no more than 50% of our shipping income would be treated as being U.S. source shipping income, the maximum effective rate of U.S. federal income tax on our shipping income would never exceed 2% under the 4% gross basis tax regime.

To the extent our U.S. source shipping income is considered to be “effectively connected” with the conduct of a U.S. trade or business, as described below, any such “effectively connected” U.S. source shipping income, net of applicable deductions, would be subject to U.S. federal income tax, currently imposed at rates of up to 35%. In addition, we would generally be subject to the 30% “branch profits” tax on earnings effectively connected with the conduct of such trade or business, as determined after allowance for certain adjustments, and on certain interest paid or deemed paid attributable to the conduct of our U.S. trade or business.

Our U.S. source shipping income would be considered “effectively connected” with the conduct of a U.S. trade or business only if: 

(1) we have, or are considered to have, a fixed place of business in the U.S. involved in the earning of U.S. source shipping income; and

(2) substantially all of our U.S. source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States.

We do not intend to have, or permit circumstances that would result in having, any vessel sailing to or from the United States on a regularly scheduled basis. Based on the foregoing and on the expected mode of our shipping operations and other activities, it is anticipated that none of our U.S. source shipping income will be “effectively connected” with the conduct of a U.S. trade or business.

U.S. Taxation of Gain on Sale of Vessels

Regardless of whether we qualify for exemption under Section 883, we will not be subject to U.S. federal income tax with respect to gain realized on a sale of a vessel, provided the sale is considered to occur outside of the United States under U.S. federal income tax principles. In general, a sale of a vessel will be considered to occur outside of the U.S. for this purpose if title to the vessel, and risk of loss with respect to the vessel, pass to the buyer outside of the United States. It is expected that any sale of a vessel by us will be considered to occur outside of the United States. 

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U.S. Federal Income Taxation of U.S. Holders

As used herein, the term “U.S. Holder” means a holder that for U.S. federal income tax purposes is a beneficial owner of common shares and is an individual U.S. citizen or resident, a U.S. corporation or other U.S. entity taxable as a corporation, an estate the income of which is subject to U.S. federal income taxation regardless of its source, or a trust if a court within the U.S. is able to exercise primary jurisdiction over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust.

If a partnership holds the common shares, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. If you are a partner in a partnership holding the common shares, you are encouraged to consult your tax advisor.

Distributions

Subject to the discussion of passive foreign investment companies below, any distributions made by us with respect to our common shares to a U.S. Holder will generally constitute dividends to the extent of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of such earnings and profits will be treated first as a nontaxable return of capital to the extent of the U.S. Holder’s tax basis in its common shares and thereafter as capital gain. Because we are not a U.S. corporation, U.S. Holders that are corporations will not be entitled to claim a dividends received deduction with respect to any distributions they receive from us. Dividends paid with respect to our common shares will generally be treated as foreign source dividend income and will generally constitute “passive category income” for purposes of computing allowable foreign tax credits for U.S. foreign tax credit purposes.

Dividends paid on our common shares to certain non-corporate U.S. Holders will generally be treated as “qualified dividend income” that is taxable to such U.S. Holders at preferential tax rates provided that (1) the common shares are readily tradable on an established securities market in the U.S. (such as the NYSE); (2) we are not a passive foreign investment company for the taxable year during which the dividend is paid or the immediately preceding taxable year (as discussed in detail below); (3) the non-corporate U.S. Holder has owned the common shares for more than 60 days in the 121-day period beginning 60 days before the date on which the common shares become ex-dividend; and (4) certain other conditions are met.

There is no assurance that any dividends paid on our common shares will be eligible for these preferential rates in the hands of such non-corporate U.S. Holders. Any dividends paid by us which are not eligible for these preferential rates will be taxed as ordinary income to a non-corporate U.S. Holder.

Special rules may apply to any “extraordinary dividend”—generally, a dividend in an amount which is equal to or in excess of 10% of a shareholder’s adjusted tax basis in a common share—paid by us. If we pay an “extraordinary dividend” on our common shares that is treated as “qualified dividend income,” then any loss derived by certain non-corporate U.S. Holders from the sale or exchange of such common shares will be treated as long term capital loss to the extent of such dividend. 

3.8% Tax on Net Investment Income

For taxable years beginning after December 31, 2012, a U.S. Holder that is an individual, estate, or, in certain cases, a trust, will generally be subject to a 3.8% tax on the lesser of (1) the U.S. Holder’s net investment income for the taxable year and (2) the excess of the U.S. Holder’s modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals will be between $125,000 and $250,000). A U.S. Holder’s net investment income will generally include distributions we make on the common shares which are treated as dividends for U.S. federal income tax purposes and capital gains from the sale, exchange or other disposition of the common shares. This tax is in addition to any income taxes due on such investment income.

If you are a U.S. Holder that is an individual, estate or trust, you are encouraged to consult your tax advisors regarding the applicability of the 3.8% tax on net investment income to your common shares.

Sale, Exchange or Other Disposition of Common Shares

Assuming we do not constitute a passive foreign investment company for any taxable year, a U.S. Holder generally will recognize taxable gain or loss upon a sale, exchange or other disposition of our common shares in an amount equal to the difference between the amount realized by the U.S. Holder from such sale, exchange or other disposition and the U.S. Holder’s tax basis in such shares. Such gain or loss will be treated as long-term capital gain or loss if the U.S. Holder’s holding period is greater than one year at the time of the sale, exchange or other disposition. Such capital gain or loss will generally be treated as U.S. source income or loss, as applicable, for U.S. foreign tax credit purposes. Long-term capital gains of certain non-corporate U.S. Holders are currently eligible for reduced rates of taxation. A U.S. Holder’s ability to deduct capital losses is subject to certain limitations.

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Passive Foreign Investment Company Status and Significant Tax Consequences

Special U.S. federal income tax rules apply to a U.S. Holder that holds shares in a foreign corporation classified as a “passive foreign investment company,” or a PFIC, for U.S. federal income tax purposes. In general, we will be treated as a PFIC with respect to a U.S. Holder if, for any taxable year in which such holder holds our common shares, either 

(1) at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business), which we refer to as the income test; or

(2) at least 50% of the average value of our assets during such taxable year produce, or are held for the production of, passive income, which we refer to as the asset test.

For purposes of determining whether we are a PFIC, cash will be treated as an asset which is held for the production of passive income. In addition, we will be treated as earning and owning our proportionate share of the income and assets, respectively, of any of our subsidiary corporations in which we own at least 25% of the value of the subsidiary’s stock. Income earned, or deemed earned, by us in connection with the performance of services would not constitute passive income. By contrast, rental income would generally constitute “passive income” unless we were treated under specific rules as deriving our rental income in the active conduct of a trade or business.

The PFIC rules contain an exception pursuant to which a foreign corporation will not be treated as a PFIC during its “start-up year.” Under this exception, a foreign corporation will not be treated as a PFIC for the first taxable year the corporation has gross income if (1) no predecessor of the corporation was a PFIC; (2) the corporation satisfies the IRS that it will not be a PFIC for either of the first two taxable years following the start-up year; and (3) the corporation is not in fact a PFIC for either of those taxable years. We may be able to rely upon the start-up exception to avoid being treated as a PFIC for our 2013 taxable year. However, as discussed below, we may be treated as a PFIC during either our 2014 taxable year or our 2015 taxable year. In addition, there is limited guidance regarding the application of the start-up exception. Therefore, there can be no assurance that we will be able to satisfy the exception.

Whether we are treated as a PFIC for our 2014 and 2015 taxable years (and our 2013 taxable year under the start-up exception described above) will depend, in part, upon whether the deposits that we make on newbuilding contracts are treated as being held for the production of “passive income” and on the amount of “passive income” that we derive in our 2014 and 2015 taxable years. In making the determination as to whether we are a PFIC, we intend to treat the deposits that we make on our newbuilding contracts as assets which are not held for the production of passive income for purposes of determining whether we are a PFIC. We note that there is no direct authority on this point and it is possible that the IRS may disagree with our position.

After our acquisition of vessels, our status as a PFIC will depend upon the operations of those vessels. In making the determination as to whether we are a PFIC, we intend to treat the gross income we derive or are deemed to derive from the spot chartering and time chartering activities of us or any of our subsidiaries as services income, rather than rental income. Correspondingly, such income should not constitute passive income, and the assets that we or our wholly owned subsidiaries own and operate in connection with the production of such income should not constitute passive assets for purposes of determining whether we are a PFIC. We believe that there is substantial legal authority supporting our position consisting of case law and IRS pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, there is also authority which characterizes time charter income as rental income rather than services income for other tax purposes. In the absence of any legal authority specifically relating to the statutory provisions governing PFICs, the IRS or a court could disagree with our position. In addition, although we intend to conduct our affairs in a manner to avoid being classified as a PFIC with respect to any taxable year, we cannot assure you that the nature of our operations will not change in the future.

As discussed more fully below, if we were to be treated as a PFIC for any taxable year, a U.S. Holder would be subject to different taxation rules depending on whether the U.S. Holder makes an election to treat us as a “Qualified Electing Fund,” which election we refer to as a “QEF election.” As an alternative to making a QEF election, a U.S. Holder should be able to make a “mark-to-market” election with respect to our common shares, as discussed below. If we were treated as a PFIC for any taxable year ending on or after December 31, 2013, a U.S. Holder will be required to file IRS Form 8621 with respect to each such taxable year containing information regarding the Company. We intend to promptly notify our shareholders if we determine that we are a PFIC for any taxable year.

Taxation of U.S. Holders Making a Timely QEF Election

If a U.S. Holder makes a timely QEF election, which U.S. Holder we refer to as an “Electing Holder,” the Electing Holder must report for U.S. federal income tax purposes its pro rata share of our ordinary earnings and net capital gain, if any, for each

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of our taxable years during which we are a PFIC that ends with or within the taxable year of the Electing Holder, regardless of whether distributions were received from us by the Electing Holder. No portion of any such inclusions of ordinary earnings will be treated as “qualified dividend income.” Net capital gain inclusions of certain non-corporate U.S. Holders may be eligible for preferential capital gains tax rates. The Electing Holder’s adjusted tax basis in the common shares will be increased to reflect any income included under the QEF election. Distributions of previously taxed income will not be subject to tax upon distribution but will decrease the Electing Holder’s tax basis in the common shares. An Electing Holder would not, however, be entitled to a deduction for its pro rata share of any losses that we incur with respect to any taxable year. An Electing Holder would generally recognize capital gain or loss on the sale, exchange or other disposition of our common shares. A U.S. Holder would make a timely QEF election for our common shares by filing IRS Form 8621 with his U.S. federal income tax return for the first year in which he held such shares when we were a PFIC. If we determine that we are a PFIC for any taxable year, we would provide each U.S. Holder with all necessary information in order to make the QEF election described above. If, we take the position that we are not a PFIC for any taxable year and it is later determined that we were a PFIC for such taxable year, it may be possible for a U.S. Holder to make a retroactive QEF election effective in such year. If we were to be treated as a PFIC for our 2013 Taxable Year, our 2014 taxable year and our 2015 taxable year, we anticipate that, based on our current projections, we would not have a significant amount of taxable income or gain that would be required to be taken into account by U.S. Holders making a QEF election effective for such taxable years.

Taxation of U.S. Holders Making a “Mark-to-Market” Election

Alternatively, if we were to be treated as a PFIC for any taxable year and, as we anticipate will be the case, our shares are treated as “marketable stock,” a U.S. Holder would be allowed to make a “mark-to-market” election with respect to our common shares, provided the U.S. Holder completes and files IRS Form 8621 in accordance with the relevant instructions and related Treasury Regulations. If that election is made, the U.S. Holder generally would include as ordinary income in each taxable year the excess, if any, of the fair market value of the common shares at the end of the taxable year over such Holder’s adjusted tax basis in the common shares. The U.S. Holder would also be permitted an ordinary loss in respect of the excess, if any, of the U.S. Holder’s adjusted tax basis in the common shares over its fair market value at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. A U.S. Holder’s tax basis in his common shares would be adjusted to reflect any such income or loss amount recognized. Any gain realized on the sale, exchange or other disposition of our common shares would be treated as ordinary income, and any loss realized on the sale, exchange or other disposition of the common shares would be treated as ordinary loss to the extent that such loss does not exceed the net mark-to-market gains previously included by the U.S. Holder.

Taxation of U.S. Holders Not Making a Timely QEF or Mark-to-Market Election

If we were to be treated as a PFIC for any taxable year, a U.S. Holder who does not make either a QEF election or a “mark-to-market” election for that year, whom we refer to as a “Non-Electing Holder,” would be subject to special rules with respect to (1) any excess distribution (i.e., the portion of any distributions received by the Non-Electing Holder on the common shares in a taxable year in excess of 125% of the average annual distributions received by the Non-Electing Holder in the three preceding taxable years, or, if shorter, the Non-Electing Holder’s holding period for the common shares), and (2) any gain realized on the sale, exchange or other disposition of our common shares. Under these special rules: 

(1) the excess distribution or gain would be allocated ratably over the Non-Electing Holder’s aggregate holding period for the common shares;

(2) the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, would be taxed as ordinary income and would not be “qualified dividend income”; and

(3) the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed tax deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.

U.S. Federal Income Taxation of “Non-U.S. Holders”

As used herein, the term “Non-U.S. Holder” means a holder that, for U.S. federal income tax purposes, is a beneficial owner of common shares (other than a partnership) that is not a U.S. Holder.

If a partnership holds our common shares, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. If you are a partner in a partnership holding our common shares, you are encouraged to consult your tax advisor.

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Dividends on Common Shares

A Non-U.S. Holder generally will not be subject to U.S. federal income or withholding tax on dividends received from us with respect to our common shares, unless that income is effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States. In general, if the Non-U.S. Holder is entitled to the benefits of an applicable U.S. income tax treaty with respect to those dividends, that income is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States.

Sale, Exchange or Other Disposition of Common Shares

A Non-U.S. Holder generally will not be subject to U.S. federal income or withholding tax on any gain realized upon the sale, exchange or other disposition of our common shares, unless: 

(1) the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States; in general, in the case of a Non-U.S. Holder entitled to the benefits of an applicable U.S. income tax treaty with respect to that gain, that gain is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States; or

(2) the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met.

Income or Gains Effectively Connected with a U.S. Trade or Business

If the Non-U.S. Holder is engaged in a U.S. trade or business for U.S. federal income tax purposes, dividends on the common shares and gain from the sale, exchange or other disposition of the shares, that is effectively connected with the conduct of that trade or business (and, if required by an applicable U.S. income tax treaty, is attributable to a U.S. permanent establishment), will generally be subject to regular U.S. federal income tax in the same manner as discussed in the previous section relating to the taxation of U.S. Holders. In addition, in the case of a corporate Non-U.S. Holder, its earnings and profits that are attributable to the effectively connected income, which are subject to certain adjustments, may be subject to an additional U.S. federal branch profits tax at a rate of 30%, or at a lower rate as may be specified by an applicable U.S. income tax treaty.

Backup Withholding and Information Reporting

In general, dividend payments, or other taxable distributions, and the payment of gross proceeds on a sale or other disposition of our common shares, made within the United States to a non-corporate U.S. Holder will be subject to information reporting. Such payments or distributions may also be subject to backup withholding if the non-corporate U.S. Holder: 

(1) fails to provide an accurate taxpayer identification number;

(2) is notified by the IRS that it has have failed to report all interest or dividends required to be shown on its U.S. federal income tax returns; or

(3) in certain circumstances, fails to comply with applicable certification requirements.

Non-U.S. Holders may be required to establish their exemption from information reporting and backup withholding with respect to dividends payments or other taxable distribution on our common shares by certifying their status on an applicable IRS Form W-8. If a Non-U.S. Holder sells our common shares to or through a U.S. office of a broker, the payment of the proceeds is subject to both U.S. backup withholding and information reporting unless the Non-U.S. Holder certifies that it is a non-U.S. person, under penalties of perjury, or it otherwise establish an exemption. If a Non-U.S. Holder sells our common shares through a non-U.S. office of a non-U.S. broker and the sales proceeds are paid outside the U.S., then information reporting and backup withholding generally will not apply to that payment. However, U.S. information reporting requirements, but not backup withholding, will apply to a payment of sales proceeds, even if that payment is made outside the United States, if a Non-U.S. Holder sells our common shares through a non-U.S. office of a broker that is a U.S. person or has some other contacts with the United States. Such information reporting requirements will not apply, however, if the broker has documentary evidence in its records that the Non-U.S. Holder is not a U.S. person and certain other conditions are met, or the Non-U.S. Holder otherwise establishes an exemption.

Backup withholding is not an additional tax. Rather, a refund may generally be obtained of any amounts withheld under backup withholding rules that exceed the taxpayer’s U.S. federal income tax liability by filing a timely refund claim with the IRS.

Individuals who are U.S. Holders (and to the extent specified in applicable Treasury Regulations, Non-U.S. Holders and certain U.S. entities) who hold “specified foreign financial assets” (as defined in Section 6038D of the Code) are required to file

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IRS Form 8938 with information relating to the asset for each taxable year in which the aggregate value of all such assets exceeds $75,000 at any time during the taxable year or $50,000 on the last day of the taxable year (or such higher dollar amount as prescribed by applicable Treasury Regulations). Specified foreign financial assets would include, among other assets, our common shares, unless the common shares are held in an account maintained with a U.S. financial institution. Substantial penalties apply to any failure to timely file IRS Form 8938, unless the failure is shown to be due to reasonable cause and not due to willful neglect. Additionally, in the event an individual U.S. Holder (and to the extent specified in applicable Treasury Regulations, a Non-U.S. Holder or a U.S. entity) that is required to file IRS Form 8938 does not file such form, the statute of limitations on the assessment and collection of U.S. federal income taxes of such holder for the related tax year may not close until three years after the date that the required information is filed. U.S. Holders (including U.S. entities) and Non-U.S. Holders are encouraged consult their own tax advisors regarding their reporting obligations in respect of our common shares.

F. Dividends and paying agents.

Not applicable.

G. Statement by experts.

Not applicable.

H. Documents on display.

We file reports and other information with the SEC. These materials, including this annual report and the accompanying exhibits, may be inspected and copied at the public reference facilities maintained by the Securities and Exchange Commission at 100 F Street, N.E. Washington, D.C. 20549, or from its website http://www.sec.gov. You may obtain information on the operation of the public reference room by calling 1 (800) SEC-0330, and you may obtain copies at prescribed rates.

Shareholders may also request a copy of our filings at no cost, by writing or telephoning us at the following address: 9, Boulevard Charles III, Monaco, 98000.

I. Subsidiary Information

Not applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We are exposed to the impact of interest rate changes primarily through our unhedged variable-rate borrowings. Significant increases in interest rates could adversely affect our operating margins, results of operations and our ability to service our debt. As of December 31, 2014, we have variable-rate borrowings totaling $33.6 million. A one percent increase in LIBOR rates would increase our interest expense by $0.3 million per year from January 1, 2015.

Spot Market Rate Risk

The cyclical nature of the tanker industry causes significant increases or decreases in the revenue that we earn from our vessels, particularly those vessels that operate in the spot market or participate in pools that are concentrated in the spot market such as the Scorpio Group Pools. Although we currently have one vessels on a time charter contract, our owned and chartered-in vessels during the year ended December 31, 2014, operated for 5,707 days only in the spot market or in the Scorpio Group Pools. Additionally, we have the ability to remove our vessels from the pools on relatively short notice if attractive time charter opportunities arise. A $1,000 per day increase or decrease in spot rates for all of our vessel classes would have increased or decreased our operating income / (loss) by $5.7 million for the year ended December 31, 2014.

Foreign Exchange Rate Risk

Our primary economic environment is the international shipping market. This market utilizes the U.S. dollar as its functional currency. Consequently, virtually all of our revenues and the majority of our operating expenses will be in U.S. dollars. However, we will incur some of our combined expenses in other currencies, particularly the Euro. The amount and frequency of some of these expenses (such as vessel repairs, supplies and stores) may fluctuate from period to period. Depreciation in the value of the U.S. dollar relative to other currencies will increase the U.S. dollar cost of us paying such expenses. The portion of our

business conducted in other currencies could increase in the future, which could expand our exposure to losses arising from currency fluctuations.

There is a risk that currency fluctuations will have a negative effect on our cash flows. We have not entered into any hedging contracts to protect against currency fluctuations. However, we have some ability to shift the purchase of goods and services from one country to another and, thus, from one currency to another, on relatively short notice. We may seek to hedge this currency fluctuation risk in the future.

Inflation

We do not expect inflation to be a significant risk to direct expenses in the current and foreseeable economic environment.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Not applicable.

ITEM 15. CONTROLS AND PROCEDURES

A. Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Our controls and procedures are designed to provide reasonable assurance of achieving their objectives.

We carried out an evaluation under the supervision, and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15e under the Securities Act) as of December 31, 2014. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2014 to provide reasonable assurance that (1) information required to be disclosed by us in the reports that we file under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (2) that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

B. Management’s Annual Report on Internal Control Over Financial Reporting.

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In accordance with Rule 13a-15(f) of the Exchange Act, the management of the Company is responsible for the establishment and maintenance of adequate internal controls over financial reporting for the Company. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s system of internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements. Management has performed an assessment of the effectiveness of the Company’s internal controls over financial reporting as of December 31, 2014 based on the provisions of Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission or COSO in 2013. Based on our assessment, management determined that the Company’s internal controls over financial reporting was effective as of December 31, 2014 based on the criteria in Internal Control—Integrated Framework issued by COSO (2013).

The Company’s internal control over financial reporting, at December 31, 2014, has been audited by PricewaterhouseCoopers Audit, an independent registered public accounting firm, who also audited the Company’s consolidated financial statements for that year. Their audit report on the effectiveness of internal control over financial reporting is presented in “Item 18 Financial Statements”.

C. Attestation Report of the Registered Public Accounting Firm.

The attestation report of the Registered Public Accounting Firm is presented on page F-2 of the Financial Statements filed as part of this annual report.

D. Changes in Internal Control Over Financial Reporting.

None

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

Our Board of Directors has determined that Mr. Einar Michael Steimler, who serves on the Audit Committee, qualifies as an “audit committee financial expert” and that he is “independent” according to Securities and Exchange Commission rules.

ITEM 16B. CODE OF ETHICS

We have adopted a code of ethics that applies to all entities controlled by the Company and its employees, directors, officers and agents. A copy of our code of ethics has been filed as an exhibit to our Registration Statement on Form F-1 (Registration No. 333-192246) and is incorporated by reference herein.

Shareholders may also request a copy of our code of ethics at no cost, by writing to us at 9, Boulevard Charles III, Monaco, 98000 or telephoning us at + 377 9798 5716.

ITEM 16C. PRINCIPAL ACCOUNTING FEES AND SERVICES

A. Audit Fees

Our principal accountant for the year ended December 31, 2014 and for the period from March 20, 2013 (date of inception) to December 31, 2013 was PricewaterhouseCoopers Audit, and the audit fees for those periods were $202,000 and $215,000, respectively.

During 2014, our principal accountant, PricewaterhouseCoopers Audit, provided services related to the issuance of our Senior Notes that was completed in September 2014 and for the registration of 40,000,000 shares of common stock issued in a private placement that was completed in November 2014; the fees for these services were $71,357 and $71,475, respectively.

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B. Audit-Related Fees

None.

C. Tax Fees

None.

D. All Other Fees

None.

E. Audit Committee’s Pre-Approval Policies and Procedures

Our Audit Committee pre-approves all audit, audit-related and non-audit services not prohibited by law to be performed by our independent auditors and associated fees prior to the engagement of the independent auditor with respect to such services.

F. Audit Work Performed by Other Than Principal Accountant if Greater Than 50%

Not applicable.

ITEM 16D. EXEMPTIONS FROM LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Name	Period	(a) No. of Common Shares Purchased	(b) Average Price Paid per Common Share		(c) Total No. of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number of Common Shares that May Yet Be Purchased Under the Plans or Programs
Hugh Baker	November 2014	80,000(1)	$	3.75	N/A	N/A
Bruce Crane Trust u/a/ 12/21/79 f/b/o Cameron K. Mackey	November 2014	66,000(1)	$	3.75	N/A	N/A
Scorpio Services Holding Ltd.	November 2014	4,000,000(1)	$	3.75	N/A	N/A

(1) These common shares were purchased in the November 2014 Private Placement.

ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

None.

ITEM 16G. CORPORATE GOVERNANCE

Pursuant to an exception for foreign private issuers, we, as a Marshall Islands company, are not required to comply with the corporate governance practices followed by U.S. companies under the NYSE listing standards. We believe that our established practices in the area of corporate governance are in line with the spirit of the NYSE standards and provide adequate protection to our shareholders. In this respect, we have voluntarily adopted NYSE required practices, such as (i) having a majority of independent directors, (ii) establishing audit, compensation and nominating committees and (iii) adopting a Code of Ethics.

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There are two significant differences between our corporate governance practices and the practices required by the NYSE. The NYSE requires that non-management directors meet regularly in executive sessions without management. The NYSE also requires that all independent directors meet in an executive session at least once a year. The Marshall Islands law and our bylaws do not require our non-management directors to regularly hold executive sessions without management. During 2014 and through the date of this annual report, our non-management directors met in executive session four times. The NYSE requires companies to adopt and disclose corporate governance guidelines. The guidelines must address, among other things: director qualification standards, director responsibilities, director access to management and independent advisers, director compensation, director orientation and continuing education, management succession and an annual performance evaluation. We are not required to adopt such guidelines under Marshall Islands law and we have not adopted such guidelines.

ITEM 16H. MINE SAFETY DISCLOSURE

Not applicable.

PART III

ITEM 17. FINANCIAL STATEMENTS

See “Item 18. Financial Statements.”

ITEM 18. FINANCIAL STATEMENTS

The financial statements, together with the report of PricewaterhouseCoopers thereon, beginning on page F-1, are filed as a part of this annual report.

ITEM 19. EXHIBITS

Number	Description
1.1	Amended and Restated Articles of Incorporation of the Company (1)
1.2	Amended and Restated Bylaws of the Company (1)
2.1	Form of Common Share Certificate (1)
2.2	Base Indenture, dated September 22, 2014, by and between the Company and Deutsche Bank Trust Company Americas, relating to the 7.50% Senior Notes due 2019 (5)
2.3	First Supplemental Indenture, dated September 22, 2014, by and between the Company and Deutsche Bank Trust Company Americas (5)
4.1	Master Agreement (1)
4.2	Administrative Services Agreement (1)
4.3	Equity Incentive Plan (1)
4.4	Form of Shipbuilding Contract of Chengxi Shipyard Co. Ltd (1)
4.5	Form of Shipbuilding Contract of Dalian COSCO KHI Ship Engineering Co. Ltd. (1)
4.6	Form of Shipbuilding Contract of Hudong-Zhongdua Shipbuilding (Group) Co., Inc. (1)
4.7	Form of Shipbuilding Contract of Imabari Shipbuilding Co. Ltd. (1)
4.8	Form of Shipbuilding Contract of Daewoo Mangalia Heavy Industries S.A. (1)
4.9	Form of Shipbuilding Contract of Tsuneishi Group (Zhoushan) Shipbuilding Inc. (1)
4.10	Form of Shipbuilding Contract of Mitsui Engineering & Shipbuilding Co. Ltd. (1)
4.11	Form of Shipbuilding Contract of Nantong COSCO KHI Ship Engineering Co., Ltd. (1)
4.12	Form of Shipbuilding Contract of Jiangsu Yangzijian Shipbuilding Co. Ltd. (1)
4.13	Form of Shipbuilding Contract of Shanghai Jiangnan-Changxing Shipbuilding Co., Ltd. (1)
4.14	Form of Shipbuilding Contract of Sungdong Shipbuilding & Marine Engineering Co., Ltd. (2)
4.15	Form of Shipbuilding Contract of Daehan Shipbuilding Co., Ltd. (2)

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4.16	Share Purchase Agreement, dated December 5, 2013, by and among SBI Zumba Shipping Company Limited, Berkeley Shipping Inc., TCV Management and Trust Services Limited and Belgrave Shipping Limited (1)
4.17	Share Purchase Agreement, dated December 5, 2013, by and among SBI Conga Shipping Company Limited, Berkeley Shipping Inc., TCV Management and Trust Services Limited and Cavendish Shipping Limited (1)
4.18	Share Purchase Agreement, dated December 5, 2013, by and among SBI Bolero Shipping Company Limited, Berkeley Shipping Inc., TCV Management and Trust Services Limited and Fitzroy Shipping Limited (1)
4.19	Share Purchase Agreement, dated December 5, 2013, by and among SBI Reggae Shipping Company Limited, Berkeley Shipping Inc., TCV Management and Trust Services Limited and Sloane Shipping Limited (1)
4.20	Share Purchase Agreement, dated December 5, 2013, by and among SBI Sousta Shipping Company Limited, Berkeley Shipping Inc., TCV Management and Trust Services Limited and Bedford Shipping Limited (1)
4.21	Registration Rights Agreement, dated December 11, 2013 (3)
4.22	Registration Rights Agreement, dated November 18, 2014 (4)
4.23	Share Purchase Agreement, dated November 18, 2014 (4)
4.24	$67.5 Million Senior Secured Credit Facility (2)
4.25	$330.0 Million Senior Secured Credit Facility (2)
4.26	$39.6 Million Senior Secured Credit Facility (2)
4.27	$409.0 Million Senior Secured Credit Facility
4.28	$240.3 Million Senior Secured Credit Facility
4.29	$42.0 Million Senior Secured Credit Facility
4.30	$26.0 Million Senior Secured Credit Facility
4.31	$19.8 Million Senior Secured Credit Facility
8.1	List of Subsidiaries
11.1	Code of Ethics (1)
12.1	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer
12.2	Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer
13.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1	Consent of Independent Registered Public Accounting Firm
15.2	Consent of SSY Consultancy Research Ltd.
101. INS	XBRL Instance Document
101. SCH	XBRL Taxonomy Extension Schema
101. CAL	XBRL Taxonomy Extension Schema Calculation Linkbase
101. DEF	XBRL Taxonomy Extension Schema Definition Linkbase
101. LAB	XBRL Taxonomy Extension Schema Label Linkbase
101. PRE	XBRL Taxonomy Extension Schema Presentation Linkbase

(1) Incorporated by reference to the Company’s Registration Statement on Form F-1, which was declared effective by the Securities and Exchange Commission on December 11, 2013 (File No. 333-192246).

(2) Incorporated by reference to the Company’s Registration Statement on Form F-1, which was declared effective by the Securities and Exchange Commission on September 15, 2015 (File No. 333-197949).

(3) Incorporated by reference to the Company’s Annual Report on Form 20-F, filed with the Securities and Exchange Commission on April 2, 2014.

(4) Incorporated by reference to the Company’s Periodic Report on Form 6-K, filed with the Securities and Exchange Commission on November 18, 2014.

(5) Incorporated by reference to the Company’s Periodic Report on Form 6-K, filed with the Securities and Exchange Commission on September 25, 2014.

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SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and has duly caused and authorized the undersigned to sign this annual report on its behalf.

Dated April 2, 2015
	Scorpio Bulkers Inc.
	(Registrant)
	/s/ Emanuele Lauro
	Emanuele Lauro
	Chief Executive Officer

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm	F- 2
Consolidated Balance Sheets as of December 31, 2014 and 2013	F- 3
Consolidated Statement of Operations for the year ended December 31, 2014 and for the period from March 20, 2013 (date of inception) to December  31, 2013	F- 4
Consolidated Statements of Changes in Shareholders’ Equity for the year ended December 31, 2014 and for the period from March  20, 2013 (date of inception) to December 31, 2013	F- 5
Consolidated Statements of Cash Flows for the year ended December 31, 2014 and the period March 20, 2013 (date of inception) to December 31, 2013	F- 6
Notes to the Consolidated Financial Statements	F- 7

F- 1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Scorpio Bulkers Inc.

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, changes in shareholders’ equity and cash flows present fairly, in all material respects, the financial position of Scorpio Bulkers Inc. and its subsidiaries at December 31, 2014 and December 31, 2013 and the results of their operations and their cash flows for the year ended December 31, 2014 and for the period from March 20, 2013 (date of inception) to December 31, 2013 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express opinions on these financial statements and on the Company's internal control over financial reporting based on our audits (which was an integrated audit in 2014).We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PRICEWATERHOUSECOOPERS AUDIT

Monaco, Principality of Monaco

April 1, 2015

F- 2

Scorpio Bulkers Inc. and Subsidiaries

Consolidated Balance Sheets

(Dollars in Thousands, Except Per Share Data)

	As of December 31,
Assets	2014			2013
Current assets
Cash and cash equivalents	$	272,673		$	733,896
Due from related parties	42,373			—
Prepaid expenses and other current assets	3,872			61
Assets held for sale	43,781			—
Total current assets	362,699			733,957
Non-current assets
Vessels, net	66,633			—
Vessels under construction	866,844			371,692
Deferred financing cost	3,181			—
Other assets	19,543			35
Due from related parties	5,305			—
Total non-current assets	961,506			371,727
Total assets	$	1,324,205		$	1,105,684
Liabilities and shareholders’ equity
Current liabilities
Bank loans	$	3,300		$	—
Accounts payable and accrued expenses	15,811			1,472
Due to related parties	1,231			—
Total current liabilities	20,342			1,472
Non-current liabilities
Bank loans	30,250			—
Senior Notes	73,625			—
Total non-current liabilities	103,875			—
Total liabilities	124,217			1,472
Commitment and contingencies (Note 8)
Shareholders’ equity
Common stock, $0.01 par value per share; authorized 450,000,000 shares; issued and outstanding 180,299,695 and 133,403,931 shares as of December 31, 2014 and December 31, 2013, respectively	1,803			1,334
Paid-in capital	1,321,057			1,109,185
Accumulated deficit	(122,872		)	(6,307		)
Total shareholders’ equity	1,199,988			1,104,212
Total liabilities and shareholders’ equity	$	1,324,205		$	1,105,684

See notes to consolidated financial statements.

F- 3

Scorpio Bulkers Inc. and Subsidiaries

Consolidated Statements of Operations

(Dollars in Thousands, Except Per Share Data)

	Year ended			Period from March 20, 2013 (date of inception) to
	December 31, 2014			December 31, 2013
Revenue:
Vessel revenue	$	3,774		$	—
Vessel revenue-related party pools (Note 15)	45,213			—
Total vessel revenue	48,987			—
Operating expenses:
Voyage expenses	3,579			—
Vessel operating costs	1,478			—
Vessel operating costs-related party (Note 15)	122			—
Charterhire expense	73,214			—
Vessel depreciation	686			—
General and administrative expenses	30,937			5,505
General and administrative expenses-related party (Note 15)	972			—
Write down on assets held for sale	55,487			—
Total operating expenses	166,475			5,505
Operating loss	(117,488		)	(5,505		)
Other income (expense):
Interest income	1,052			341
Foreign exchange gain (loss)	43			(1,135		)
Financial expense, net	(172		)	(8		)
Total other income (loss)	923			(802		)
Net loss	$	(116,565	)	$	(6,307	)
Weighted-average shares outstanding:
Basic	137,592,861			39,925,160
Diluted	137,592,861			39,925,160
Loss per common share:
Basic	$	(0.85	)	$	(0.16	)
Diluted	$	(0.85	)	$	(0.16	)

See notes to consolidated financial statements.

F- 4

Scorpio Bulkers Inc. and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity

(Dollars in Thousands)

	Number of shares outstanding	Common stock		Paid-in capital			Accumulated deficit			Total
Balance at March 20, 2013 (date of inception)	—	$	—	$	—		$	—		$	—
Net loss							(6,307		)	(6,307		)
Shares issued upon formation	1,500
Net proceeds from common stock offerings:
Norwegian private placements	97,240,411	972		823,307						824,279
Initial public offering	31,300,000	313		282,568						282,881
Issuance of shares of restricted stock	4,862,020	49		(49		)				—
Restricted stock amortization				3,359						3,359
Balance as of December 31, 2013	133,403,931	$	1,334	$	1,109,185		$	(6,307	)	$	1,104,212
Net loss							(116,565		)	(116,565		)
Net proceeds from common stock offering:
Overallotment of initial public offering	4,695,000	47		42,298						42,345
Private placement	40,000,000	400		145,227						145,627
Common Stock issued to SSH	52,394	1		499						500
Issuance of shares of restricted stock	2,148,370	21		(21		)				—
Restricted stock amortization				23,869						23,869
Balance as of December 31, 2014	180,299,695	$	1,803	$	1,321,057		$	(122,872	)	$	1,199,988

See notes to consolidated financial statements.

F- 5

Scorpio Bulkers Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Dollars in Thousands)

	Year ended			Period from March 20, 2013 (date of inception) to
	December 31, 2014			December 31, 2013
Operating activities
Net loss	$	(116,565	)	$	(6,307	)
Adjustment to reconcile net loss to net cash used by operating activities:
Restricted stock amortization	23,869			3,359
Amortization of deferred financing costs	150			—
Vessel depreciation	686			—
Write down on assets held for sale	55,487			—
Changes in operating assets and liabilities:
Increase in prepaid expenses and other assets	(3,811		)	(96		)
Increase in accounts payable and accrued expenses	5,014			807
Related party balances	(15,170		)	—
Net cash used in operating activities	(50,340		)	(2,237		)
Investing activities
Security deposit paid on assets held for sale	(31,277		)	—
Payments for vessels and vessels under construction	(651,505		)	(371,692		)
Net cash used by investing activities	(682,782		)	(371,692		)
Financing activities
Proceeds from issuance of common stock	187,615			1,107,825
Proceeds from bank loans	33,550			—
Proceed from Senior Notes offering	73,625			—
Debt issue cost paid	(22,891		)	—
Net cash provided by financing activities	271,899			1,107,825
(Decrease) increase in cash and cash equivalents	(461,223		)	733,896
Cash at cash equivalents, beginning of period	733,896			—
Cash and cash equivalents, end of period	$	272,673		$	733,896

See notes to consolidated financial statements.

F- 6

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

1. General information and significant accounting policies

Company

Scorpio Bulkers Inc. and its subsidiaries (together “we”, “us” or the “Company”) is a company formed for the purpose of acquiring and operating the latest generation newbuilding drybulk carriers with fuel-efficient specifications and carrying capacities of greater than 30,000 dwt in the international shipping markets. Scorpio Bulkers Inc. was incorporated in the Republic of the Marshall Islands on March 20, 2013.

As of the report date, which was December 31, 2014, the Company owns two Kamsarmax vessels and has ordered 71 newbuilding drybulk carriers, which it intends to operate. The Company also has one Kamsarmax vessel contract and six contracts for the construction of LR2 tankers which are classified on the balance sheet as assets held for sale.

Our vessels are commercially managed by Scorpio Commercial Management S.A.M. (“SCM”), which is majority owned by the Lolli-Ghetti family of which, Emanuele Lauro, our Chairman and Chief Executive Officer is a member. SCM’s services include securing employment, in pools, in the spot market and on time charters.

Our vessels are technically managed by Scorpio Ship Management S.A.M. (“SSM”), which is majority owned by the Lolli-Ghetti family. SSM facilitates vessel support such as crew, provisions, deck and engine stores, insurance, maintenance and repairs, and other services as necessary to operate the vessels such as drydocks and vetting/inspection under a technical management agreement.

We also have an administrative services agreement with Scorpio Services Holding Ltd. (“SSH”), which is majority owned by the Lolli-Ghetti family. The administrative services provided under this agreement primarily include accounting, legal compliance, financial, information technology services, and the provision of administrative staff and office space, which are contracted to SCM. We pay our managers fees for these services and reimburse them for direct or indirect expenses that they incur in providing these services. 

Basis of accounting

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany accounts and transactions have been eliminated in consolidation.

Going concern

The Company’s revenue is derived from time charter revenue, voyage revenue and pool revenue. The bulker shipping industry is volatile and has been experiencing a sustained cyclical downturn. If the downturn continues, this could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows.

The fair market values of the Company’s vessels also experience high volatility. The fair market value of the vessels may increase and decrease depending on a number of factors including, but not limited to, the prevailing level of charter rates and day rates, general economic and market conditions affecting the international shipping industry, types, sizes and ages of vessels, supply and demand for vessels, availability of or developments in other modes of transportation, competition from other shipping companies, cost of newbuildings, governmental or other regulations and technological advances. In addition, as vessels grow older, they generally decline in value. If the fair market value of vessels declines, the Company may not be in compliance with certain provisions of its credit facilities and it may not be able to refinance its debt and obtain additional financing. The prepayment of certain credit facilities may be necessary to cause the Company to maintain compliance with certain covenants in the event that the value of its vessels falls below a certain level. Additionally, if the Company sells one or more of its vessels at a time when vessel prices have fallen, the sale price may be less than the vessel’s carrying value on its consolidated financial statements, resulting in a loss on sale or an impairment loss being recognized, ultimately leading to a reduction in earnings. Furthermore, if vessel values fall significantly, this could indicate a decrease in the recoverable amount for the vessel which may result in an impairment adjustment in the carrying value of the vessel.

As described in Note 8, the Company has commitments to pay for its vessels currently under construction that exceed the amount of financing presently secured for these. If the Company is not able to borrow additional funds, raise other capital or utilize

F- 7

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

available cash on hand, it may not be able to acquire these newbuilding vessels, which could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows.

These consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, nor to the amounts and classification of liabilities that may be necessary should the Company be unable to continue as a going concern.

Significant Accounting Policies

Additional information-Development stage company

The Company reported in its December 31, 2013 financial statements that it was a “development stage company”.  In June 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-10, which removes the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinctions between development stage entities and other reporting entities from U.S. GAAP.  Therefore, this Update removes retrospectively all incremental financial reporting requirements for development stage entities.

This Update is effective for annual reporting periods beginning after December 15, 2014, and interim periods therein.  Entities are allowed to apply such guidance early for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued.  The Company elected to adopt this guidance during the second quarter ended June 30, 2014.

Accounting estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

In addition to the estimates noted above, significant estimates will include vessel valuations, residual value of vessels, useful life of vessels and the fair value of derivative instruments.

Segment reporting

The Company has three reportable segments, Ultramax vessels, Kamsarmax vessels and Capesize vessels, which are engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk carrier vessels. See Note 16.

Revenue recognition

Vessel revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of discounts, and other sales-related or value added taxes.

Vessel revenue is comprised of either time charter revenue, voyage revenue and/or pool revenue.

(1) Time charter revenue is recognized ratably as services are performed based on the daily rates specified in the time charter contract. We do not recognize revenue when a vessel is off hire.

(2) Voyage charter agreements are charter hires, where a contract is made in the spot market for the use of a vessel for a specific voyage for a specified charter rate. Revenue from voyage charter agreements is recognized on a pro rata basis based on the relative transit time in each period. The period over which voyage revenues are recognized commences at the time the vessel departs from its last discharge port and ends at the time the discharge of cargo at the next discharge port is completed. We do not begin recognizing revenue until a charter has been agreed to by the customer and us, even if the vessel has discharged its cargo and is sailing to the anticipated load port on its next voyage. Estimated losses on voyages are provided for in full at the time such losses become evident. In the application of this policy, we do not begin recognizing revenue until (i) the amount of revenue can be measured reliably, (ii) it is probable that the economic benefits associated with the transaction will flow to the entity, (iii) the

F- 8

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

transactions’ stage of completion at the balance sheet date can be measured reliably and (iv) the costs incurred and the costs to complete the transaction can be measured reliably.

(3) Pool revenue for each vessel is determined in accordance with the profit sharing terms specified within each pool agreement. In particular, the pool manager aggregates the revenues and expenses of all of the pool participants and distributes the net earnings to participants based on:

• the pool points (vessel attributes such as cargo carrying capacity, fuel consumption, and construction characteristics are taken into consideration); and

• the number of days the vessel participated in the pool in the period.

We recognize pool revenue on a monthly basis, when the vessel has participated in a pool during the period and the amount of pool revenue for the month can be estimated reliably. We receive estimated vessel earnings based on the known number of days the vessel has participated in the pool, the contract terms, and the estimated monthly pool revenue. On a quarterly basis, we receive a report from the pool which identifies the number of days the vessel participated in the pool, the total pool points for the period, the total pool revenue for the period, and the calculated share of pool revenue for the vessel. We review the quarterly report for consistency with each vessel’s pool agreement and vessel management records. The estimated pool revenue is reconciled quarterly, coinciding with our external reporting periods, to the actual pool revenue earned, per the pool report. Consequently, in our financial statements, reported revenues represent actual pooled revenues. While differences do arise in the performance of these quarterly reconciliations, such differences are not material to total reported revenues.

Voyage expenses

Voyage expenses, which primarily include bunkers, port charges, canal tolls, cargo handling operations and brokerage commissions paid by us under voyage charters are expensed as incurred.

Charterhire expense

Charterhire expense is the amount we pay the owner for time chartered-in vessels. The amount is usually for a fixed period of time at charter rates that are generally fixed, but may contain a variable component based on drybulk indices, inflation, interest rates, profit sharing, or current market rates. The vessel’s owner is responsible for crewing and other vessel operating costs. Charterhire expense is recognized ratably over the charterhire period.

Operating leases

Costs in respect of operating leases are charged to the consolidated statement of operations on a straight line basis over the lease term.

Vessel operating costs

Vessel operating costs, which include crewing, repairs and maintenance, insurance, stores, lube oils, communication expenses, and technical management fees, are expensed as incurred. Expenses for repairs and maintenance tend to fluctuate from period to period because most repairs and maintenance typically occur during periodic drydocking. We expect these expenses to increase as our fleet matures and to the extent that it expands.

Additionally, these costs include technical management fees that we pay to SSM (See Note 15). Pursuant to an agreement, or the Master Agreement, SSM provides us with technical services, and we provide them with the ability to subcontract technical management of our vessels with our approval.

Foreign currencies

The individual financial statements of Scorpio Bulkers Inc. and each of its subsidiaries are presented in the currency of the primary economic environment in which we operate (its functional currency), which in all cases is U.S. dollars. For the purpose of the consolidated financial statements, our results and financial position are also expressed in U.S. dollars.

In preparing the financial statements of Scorpio Bulkers Inc. and each of its subsidiaries, transactions in currencies other than the U.S. dollar are recorded at the rate of exchange prevailing on the dates of the transactions. Any change in exchange rate between

F- 9

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

the date of recognition and the date of settlement may result in a gain or loss which is recognized in the consolidated statement of operations. At the end of each reporting period, monetary assets and liabilities denominated in other currencies are retranslated into the functional currency at rates ruling at that date. All resultant exchange differences have been recognized in the consolidated statement of operations.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly-liquid investments with original maturities of three months or less, and that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. The carrying value of cash and cash equivalents approximates fair value due to the short-term nature of these instruments.

Inventories

Inventories, which are included in Prepaid expenses and other current assets, consist of lubricating oils and other items including stock provisions, and are stated at the lower of cost and net realizable value. Cost is determined using the first in first out method. Stores and spares are charged to vessel operating costs when purchased.

Assets held for sale

Assets held for sale include vessels and contracts for the construction of vessels and are classified in accordance ASC 360, Property, Plant, and Equipment. The Company considers such assets to be held for sale when all of the following criteria are met:

• management commits to a plan to sell the property;

• it is unlikely that the disposal plan will be significantly modified or discontinued;

• the property is available for immediate sale in its present condition;

• actions required to complete the sale of the property have been initiated;

• sale of the property is probable and we expect the completed sale will occur within one year; and

• the property is actively being marketed for sale at a price that is reasonable given its current market value.

Upon designation as an asset held for sale, the Company records the carrying value of the asset at the lower of its carrying value or its estimated fair value, less estimated costs to sell, and, if the asset is a vessel, the Company ceases depreciation.

Vessels, net

Vessels, net is stated at historical cost less accumulated depreciation. Included in vessel costs are acquisition costs directly attributable to the acquisition of a vessel and expenditures made to prepare the vessel for its initial voyage. The Company also capitalizes interest costs for a vessel under construction as a cost which is directly attributable to the acquisition cost of a vessel. Vessels are depreciated on a straight-line basis over their estimated useful lives, determined to be 25 years from the date the vessel is ready for its first voyage. Depreciation is based on cost less the estimated residual value which is the lightweight tonnage of each vessel multiplied by scrap value per ton. The scrap value per ton is estimated taking into consideration the historical four years average scrap market rates at the balance sheet date with changes accounted for in the period of change and in future periods. The Company believes that a 25-year depreciable life for its vessels is consistent with that of other ship owners and with its economic useful life. An increase in the useful life of the vessel or in its residual value would have the effect of decreasing the annual depreciation charge and extending it into later periods. A decrease in the useful life of the vessel or in its residual value would have the effect of increasing the annual depreciation charge. However, when regulations place limitations over the ability of a vessel to trade on a worldwide basis, or when the cost of complying with such regulations is not expected to be recovered, we will adjust the vessel’s useful life to end at the date such regulations preclude such vessel’s further commercial use. The carrying value of the Company’s vessels does not represent the fair market value of such vessels or the amount it could obtain if it were to sell any of its vessels, which could be more or less. Under U.S. GAAP, the Company would not record a loss if the fair market value of a vessel (excluding its charter) is below our carrying value unless and until it determines to sell that vessel or the vessel is impaired as discussed below under “Impairment of long-lived assets.” 

Vessels under construction

Vessels under construction are measured at cost and include costs incurred that are directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. These costs include

F- 10

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

installment payments made to the shipyards, capitalized interest, professional fees and other costs deemed directly attributable to the construction of the asset. Vessels under construction are not depreciated.

Deferred drydocking costs

The vessels are required to undergo planned drydocks for replacement of certain components, major repairs and maintenance of other components, which cannot be carried out while the vessels are operating, approximately every 30 months or 60 months depending on the nature of work and external requirements. These drydock costs are capitalized and depreciated on a straight-line basis over the estimated period until the next drydock. When the drydock expenditure is incurred prior to the expiry of the period, the remaining balance is expensed. The Company had no drydocking activity during the year ended December 31, 2014 and for the period from March 20, 2013 (date of inception) to December 31, 2013.

We only include in deferred drydocking those direct costs that are incurred as part of the drydocking to meet regulatory requirements, or are expenditures that add economic life to the vessel, increase the vessel’s earnings capacity or improve the vessel’s efficiency. Direct costs include shipyard costs as well as the costs of placing the vessel in the shipyard; cost of travel, lodging and subsistence of personnel sent to the drydocking site to supervise; and the cost of hiring a third party to oversee the drydocking. Expenditures for normal maintenance and repairs, whether incurred as part of the drydocking or not, are expensed as incurred.

Deferred financing costs

Deferred financing costs consist of fees, commissions and legal expenses associated with securing loan facilities and other debt offerings.  These costs are amortized over the life of the related debt and are recorded as financial expense, net.

Other assets

Other assets consists primarily of deferred financing costs relating to the portions of loan facilities that have not yet been drawn down. As the loan facilities are drawn down, the related portion of costs incurred relating to such facilities will be reclassified to Deferred financing costs and amortized over the life of the related debt.

Impairment of long-lived assets held for use

The Company follows ASC Subtopic 360-10, Property, Plant and Equipment (“ASC 360-10”), which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. If indicators of impairment are present, the Company performs an analysis of the anticipated undiscounted future net cash flows of the related long-lived assets, including vessels and vessels under construction. If the carrying value of the related asset exceeds the undiscounted cash flows, the carrying value is reduced to its fair value.

Due to continuing poor industry conditions, impairment tests on a vessel by vessel basis were performed as at December 31, 2014. The most significant assumptions made for the determination of expected cash flows are (i) charter rates on expiry of existing charters, which are based on the current fixing applicable to 5-year time charter rates and thereafter, a reversion to the ten years-year historical average for each category of vessel (ii) off-hire days, which are based on actual off-hire statistics for the Company’s fleet (iii) operating costs, based on current levels escalated over time based on long term trends (iv) dry docking frequency, duration and cost, (v) estimated useful life which is assessed as a total of 25 years and (vi) estimated scrap values. In the case of an indication of impairment, the results of a recoverability test would also be sensitive to the discount rate applied.

The assumptions used involve a considerable degree of estimation. Actual conditions may differ significantly from the assumptions and thus actual cash flows may be significantly different to those expected with a material effect on the recoverability of each vessel’s carrying amount.

No impairment charges were recorded on the Company’s long-lived assets held for use as at December 31, 2014 based on the assumptions made, the expected undiscounted future cash flows exceeding the vessels’ carrying amounts.

Fair value of financial instruments

The estimated fair values of our financial instruments such as amounts due to / due from charterers, accounts payable and long-term debt, approximate their individual carrying amounts due to their short-term maturity or the variable-rate nature of the respective borrowings under the credit facilities.

F- 11

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

The fair value of any interest rate swaps is the estimated amount we would receive or have to pay in order to terminate these agreements at the reporting date, taking into account current interest rates and the creditworthiness of the counterparty for assets and our creditworthiness for liabilities.

Provisions

Provisions are recognized when we have a present obligation as a result of a past event, and it is probable that we will be required to settle that obligation. Provisions are measured at our best estimate of the expenditure required to settle the obligation at the balance sheet date, and are discounted to present value where the effect is material.

Deferred financing costs, net

Deferred financing costs, included in other assets, consist of fees, commissions and legal expenses associated with obtaining loan facilities and amending existing loan facilities. These costs are amortized over the life of the related debt and are included in interest expense. Amortization was $150 for the year ended December 31, 2014. Accumulated amortization was $150 as of December 31, 2014.

Earnings per share

Basic earnings per share is calculated by dividing the net income (loss) attributable to equity holders of the common shares by the weighted average number of common shares outstanding. Diluted earnings per share are calculated by adjusting the net income (loss) attributable to equity holders of the parent and the weighted average number of common shares used for calculating basic per share for the effects of all potentially dilutive shares. Such dilutive common shares are excluded when the effect would be to increase earnings per share or reduce a loss per share.

Restricted stock

We follow Accounting Standards Codification (“ASC”) Subtopic 718-10, Compensation-Stock Compensation (“ASC 718-10”), for restricted stock issued under our equity incentive plans. Stock-based compensation costs from restricted stock are classified as a component of additional paid-in capital. The restricted stock awards granted to our employees and directors contain only service conditions and are classified as equity settled. Accordingly, the fair value of our restricted stock awards is calculated by multiplying the share price on the grant date and the number of restricted stock shares granted that are expected to vest. We believe that the share price at the grant date serves as a proxy for the fair value of services to be provided by the employees and directors under the plan.

Compensation expense related to the awards is recognized ratably over the vesting period, based on our estimate of the number of awards that will eventually vest. The vesting period is the period during which an employee or director is required to provide service in exchange for an award and is updated at each balance sheet date to reflect any revisions in estimates of the number of awards expected to vest as a result of the effect of non-market-based vesting conditions.

Income tax

Scorpio Bulkers Inc. and its subsidiaries are incorporated in the Republic of the Marshall Islands, and in accordance with the income tax laws of the Marshall Islands, are not subject to Marshall Islands’ income tax. We are also exempt from income tax in other jurisdictions including the United States of America due to tax treaties; therefore, we will not have any tax charges, benefits, or balances.

Concentration of credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk are amounts due from charterers and from related parties. With respect to balances due from the Scorpio Ultramax Pool and the Scorpio Kamsarmax Pool (see Note 15), the Company, through SCM, limits its credit risk by performing ongoing credit evaluations and, when deemed necessary, requires letters of credit, guarantees or collateral.  The Company earned 71.4% and 20.8% of its revenues from two customers during the year ended December 31, 2014.  Management does not believe significant risk exists in connection with the Company’s concentrations of credit at December 31, 2014.

At December 31, 2014, the Company maintains all of its cash and cash equivalents with five financial institutions.  None of the Company’s cash and cash equivalent balances is covered by insurance in the event of default by these financial institutions.

F- 12

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

Interest rate risk

The Company is exposed to the impact of interest rate changes primarily through its variable-rate borrowings which consist of borrowings under its secured credit facilities. Significant increases in interest rates could adversely affect our operating margins, results of operations and our ability to service our debt. The Company intends to selectively enter into derivative contracts to hedge its overall exposure to interest rate risk exposure. Entering into swaps and derivatives transactions is inherently risky and presents various possibilities for incurring significant expenses. The derivatives strategies that the Company employs in the future may not be successful or effective, and it could, as a result, incur substantial additional interest costs.

Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in raising funds to meet commitments associated with financial instruments.

We manage liquidity risk by maintaining adequate reserves and borrowing facilities and by continuously monitoring forecast and actual cash flows.

Current economic conditions make forecasting difficult, and there is the possibility that our actual trading performance during the coming year may be materially different from expectations. Based on internal forecasts and projections that take into account reasonably possible changes in our trading performance, we believe that we have adequate financial resources to continue in operation and meet our financial commitments (including but not limited to newbuilding installments, debt service obligations and charterhire commitments) for a period of at least twelve months from the date of approval of these consolidated financial statements. Accordingly, we continue to adopt the going concern basis in preparing our financial statements.

Currency and exchange rate risk

The international shipping industry’s functional currency is the U.S. Dollar. Virtually all of our revenues and most of our operating costs are in U.S. Dollars. We incur certain operating expenses in currencies other than the U.S. Dollar, and the foreign exchange risk associated with these operating expenses is immaterial.

Recent accounting pronouncements

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers”, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. This Update defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, and shall be applied either retrospectively to each period presented or as a cumulative effect adjustment as of the date of adoption. The Company is evaluating the potential impact of this adoption on its consolidated financial statements.

The following are accounting policies that the Company will adopt going forward when and if it becomes party to derivative financial instruments.

Derivative financial instruments

Derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each balance sheet date. A derivative with a positive fair value is recognized as a financial asset whereas a derivative with a negative fair value is recognized as a financial liability. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedging relationship. We designate certain derivatives as hedges of highly probable forecast transactions (cash flow hedges) as described further below.

A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months, and it is not expected to be realized or settled within 12 months.

F- 13

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

2. Cash Flow Information

For the year ended December 31, 2014, the Company had non-cash investing activities not included in the consolidated statement of cash flows of $7,568 relating to costs associated with vessels and vessels under construction that had not been paid as of December 31, 2014.

For the year ended December 31, 2014, the Company had non-cash financing activities not included in the statement of cash flows of $532 relating to deferred financing costs that had not been paid as of December 31, 2014 and $357 relating to costs of issuing common stock that have not been paid as of December 31, 2014. For the period from March 20, 2013 (date of inception) to December 31, 2013, the Company had non-cash financing activities not included in the statement of cash flows of $665 relating to costs of issuing common stock that have not been paid as of December 31, 2013.

For the year ended December 31, 2014, the Company transferred $67,319 from vessels under construction to vessels at the time of delivery from the shipyard.

For the year ended December 31, 2014, the Company transferred $97,103 from vessels under construction to assets held for sale (see Note 7).

For the year ended December 31, 2014, the Company paid interest of $1,273 and capitalized $1,600 of interest, which is included in consolidated statement of cash flows as investing activities.

3. Cash and cash equivalents

Included in cash and cash equivalents as of December 31, 2014 is $75,029 of short-term deposits with original maturities of less than three months.

4. Earnings Per Common Share 

The computation of basic earnings per share is based on the weighted-average number of common shares issued and outstanding during the year, excluding unvested shares of restricted stock (see Note 11). The computation of diluted earnings per share assumes the lapsing of restrictions on unvested restricted stock awards, for which the assumed proceeds upon lapsing of restrictions are deemed to be the amount of compensation cost attributable to future services and not yet recognized using the treasury stock method, to the extent dilutive.

The components of the denominator for the calculation of basic earnings per share and diluted earnings per share are as follows:

	For the year ended	Period from March 20, 2013 (date of inception) to
	December 31, 2014	December 31, 2013
Common shares outstanding basic:
Weighted average common shares outstanding basic	137,592,861	39,925,160
Common shares outstanding, diluted:
Weighted average common shares outstanding basic	137,592,861	39,925,160
Restricted stock awards	—	—
Weighted average common shares outstanding, diluted	137,592,861	39,925,160

Due to the net loss realized for the year ended December 31, 2014, potentially dilutive restricted stock awards totaling 865,758 shares were determined to be anti-dilutive; accordingly, they are not taken into account for the calculation of earnings per share. Due to the net loss realized for the period from March 20, 2013 (date of inception) to December 31, 2013, potentially dilutive restricted stock awards totaling 373,046 shares were determined to be anti-dilutive; accordingly, they are not taken into account for the calculation of earnings per share.

5. Vessels

The Company took delivery of the SBI Cakewalk on August 26, 2014 and SBI Charleston on September 26, 2014. These vessels have an aggregate carrying value of $66,633 which is net of accumulated depreciation of $686 as of December 31, 2014.

Owned vessels

Vessel Name	Year Built	DWT	Vessel Type
SBI Cakewalk	2014	82,000	Kamsarmax
SBI Charleston	2014	82,000	Kamsarmax
Total DWT		164,000

6. Vessels under construction

Vessels under construction was $866,844 as of December 31, 2014. Substantially all of this amount relates to installments paid to shipyards on 71 of our newbuilding contracts.

A rollforward of activity within vessels under construction is as follows:

Balance, March 20, 2013 (date of inception)	$	—
Installment payments and other capitalized expenses	371,692
Balance, December 31, 2013	371,692
Installment payments and other	657,974
Capitalized interest	1,600
Transferred to vessels	(67,319		)
Transferred to assets held for sale	(97,103		)
Balance December 31, 2014	$	866,844

As of December 31, 2014, we had contracts, excluding those classified as assets held for sale (see Note 7), to acquire 71 newbuilding drybulk carriers, including 29 Ultramax vessels with carrying capacities between 60,200 and 64,000 dwt, 20 Kamsarmax vessels with carrying capacities between 81,600 and 84,000 dwt and 22 Capesize vessels with carrying capacities of 180,000 dwt. The aggregate purchase price of these 71 newbuildings is approximately $2,662,876 of which we have paid $848,526 through December 31, 2014.

F- 14

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

A summary of our vessels under construction is as follows:

Capesize Vessels
	Vessel Name	Expected Delivery (1)	DWT	Shipyard
1	Hull H1309 - TBN SBI Puro	Q1-15	180,000	Shanghai Waigaoqiao Shipbuilding Co., Ltd.
2	Hull H1310 - TBN SBI Valrico	Q3-15	180,000	Shanghai Waigaoqiao Shipbuilding Co., Ltd.
3	Hull H1311 - TBN SBI Maduro	Q4-15	180,000	Shanghai Waigaoqiao Shipbuilding Co., Ltd.
4	Hull H1364 - TBN SBI Belicoso	Q3-15	180,000	Shanghai Waigaoqiao Shipbuilding Co., Ltd.
5	Hull H1365 - TBN SBI Corona	Q1-16	180,000	Shanghai Waigaoqiao Shipbuilding Co., Ltd.
6	Hull H1366 - TBN SBI Diadema	Q1-16	180,000	Shanghai Waigaoqiao Shipbuilding Co., Ltd.
7	Hull H1367 - TBN SBI Estupendo	Q2-16	180,000	Shanghai Waigaoqiao Shipbuilding Co., Ltd.
8	Hull S1205 - TBN SBI Camacho	Q2-15	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
9	Hull S1206 - TBN SBI Montesino	Q2-15	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
10	Hull S1211 - TBN SBI Magnum	Q2-15	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
11	Hull S1212 - TBN SBI Montecristo	Q3-15	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
12	Hull S1213 - TBN SBI Aroma	Q3-15	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
13	Hull S1214 - TBN SBI Cohiba	Q4-15	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
14	Hull S1215 - TBN SBI Habano	Q1-16	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
15	Hull S1216 - TBN SBI Lonsdale *	Q4-15	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
16	Hull S1217 - TBN SBI Partagas *	Q1-16	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
17	Hull S1219 - TBN SBI Toro *	Q2-16	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
18	Hull H1059 - TBN SBI Churchill	Q4-15	180,000	Daewoo Mangalia Heavy Industries S.A.
19	Hull H1060 - TBN SBI Perfecto	Q1-16	180,000	Daewoo Mangalia Heavy Industries S.A.
20	Hull H1061 - TBN SBI Presidente	Q2-16	180,000	Daewoo Mangalia Heavy Industries S.A.
21	Hull HN1058 - TBN SBI Behike	Q4-15	180,000	Daehan Shipbuilding Co., Ltd.
22	Hull HN1059 - TBN SBI Monterrey	Q4-15	180,000	Daehan Shipbuilding Co., Ltd.
	Capesize NB DWT		3,960,000

* Subsequently converted to LR1 product tanker contracts. See Note18.

F- 15

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

Kamsarmax Vessels
	Vessel Name	Expected Delivery (1)	DWT	Shipyard
1	Hull S1680 - TBN SBI Samba	Q1-15	84,000	Imabari Shipbuilding Co., Ltd.
2	Hull S1681 - TBN SBI Rumba	Q3-15	84,000	Imabari Shipbuilding Co., Ltd.
3	Hull 1090 - TBN SBI Electra	Q3-15	82,000	Jiangsu Yangzijiang Shipbuilding Co., Ltd.
4	Hull 1091 - TBN SBI Flamenco	Q3-15	82,000	Jiangsu Yangzijiang Shipbuilding Co., Ltd.
5	Hull 1092 - TBN SBI Rock	Q4-15	82,000	Jiangsu Yangzijiang Shipbuilding Co., Ltd.
6	Hull 1093 - TBN SBI Twist	Q1-16	82,000	Jiangsu Yangzijiang Shipbuilding Co., Ltd.
7	Hull SS179 - TBN SBI Merengue	Q1-16	81,600	Tsuneishi Group (Zhoushan) Shipbuilding Inc.
8	Hull S1228 - TBN SBI Capoeira	Q2-15	82,000	Hudong-Zhonghua (Group) Co., Ltd.
9	Hull S1722A - TBN SBI Conga	Q2-15	82,000	Hudong-Zhonghua (Group) Co., Ltd.
10	Hull S1723A - TBN SBI Bolero	Q3-15	82,000	Hudong-Zhonghua (Group) Co., Ltd.
11	Hull S1229 - TBN SBI Carioca	Q3-15	82,000	Hudong-Zhonghua (Group) Co., Ltd.
12	Hull S1724A - TBN SBI Sousta	Q3-15	82,000	Hudong-Zhonghua (Group) Co., Ltd.
13	Hull S1725A - TBN SBI Reggae	Q4-15	82,000	Hudong-Zhonghua (Group) Co., Ltd.
14	Hull S1726A - TBN SBI Zumba	Q1-16	82,000	Hudong-Zhonghua (Group) Co., Ltd.
15	Hull S1231 - TBN SBI Macarena	Q1-16	82,000	Hudong-Zhonghua (Group) Co., Ltd.
16	Hull S1735A - TBN SBI Parapara	Q2-16	82,000	Hudong-Zhonghua (Group) Co., Ltd.
17	Hull S1736A - TBN SBI Mazurka	Q2-16	82,000	Hudong-Zhonghua (Group) Co., Ltd.
18	Hull S1230 - TBN SBI Lambada	Q3-15	82,000	Hudong-Zhonghua (Group) Co., Ltd.
19	Hull S1232 - TBN SBI Swing	Q2-16	82,000	Hudong-Zhonghua (Group) Co., Ltd.
20	Hull S1233 - TBN SBI Jive	Q3-16	82,000	Hudong-Zhonghua (Group) Co., Ltd.
	Kamsarmax NB DWT		1,643,600

F- 16

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

Ultramax Vessels
	Vessel Name	Expected Delivery (1)	DWT	Shipyard
1	Hull 1907 - TBN SBI Hera	Q2-16	60,200	Mitsui Engineering & Shipbuilding Co., Ltd.
2	Hull 1906 - TBN SBI Zeus	Q2-16	60,200	Mitsui Engineering & Shipbuilding Co., Ltd.
3	Hull 1911 - TBN SBI Poseidon	Q2-16	60,200	Mitsui Engineering & Shipbuilding Co., Ltd.
4	Hull 1912 - TBN SBI Apollo	Q2-16	60,200	Mitsui Engineering & Shipbuilding Co., Ltd.
5	Hull S870 - TBN SBI Echo	Q3-15	61,000	Imabari Shipbuilding Co., Ltd.
6	Hull S871 - TBN SBI Tango	Q3-15	61,000	Imabari Shipbuilding Co., Ltd.
7	Hull S-A098 - TBN SBI Achilles	Q4-15	61,000	Imabari Shipbuilding Co., Ltd.
8	Hull S-A089 - TBN SBI Cronos	Q4-15	61,000	Imabari Shipbuilding Co., Ltd.
9	Hull S-A090 - TBN SBI Hermes	Q1-16	61,000	Imabari Shipbuilding Co., Ltd.
10	Hull NE180 - TBN SBI Bravo	Q1-15	61,000	Nantong COSCO KHI Ship Engineering Co. Ltd.
11	Hull NE181 - TBN SBI Antares	Q1-15	61,000	Nantong COSCO KHI Ship Engineering Co. Ltd.
12	Hull NE182 - TBN SBI Maia	Q3-15	61,000	Nantong COSCO KHI Ship Engineering Co. Ltd.
13	Hull NE183 - TBN SBI Hydra	Q3-15	61,000	Nantong COSCO KHI Ship Engineering Co. Ltd.
14	Hull NE194 - TBN SBI Hyperion	Q2-16	61,000	Nantong COSCO KHI Ship Engineering Co. Ltd.
15	Hull NE195 - TBN SBI Tethys	Q2-16	61,000	Nantong COSCO KHI Ship Engineering Co. Ltd.
16	Hull DE018 - TBN SBI Leo	Q1-15	61,000	Dalian COSCO KHI Ship Engineering Co. Ltd.
17	Hull DE019 - TBN SBI Lyra	Q2-15	61,000	Dalian COSCO KHI Ship Engineering Co. Ltd.
18	Hull DE020 - TBN SBI Subaru	Q2-15	61,000	Dalian COSCO KHI Ship Engineering Co. Ltd.
19	Hull DE021 - TBN SBI Ursa	Q3-15	61,000	Dalian COSCO KHI Ship Engineering Co. Ltd.
20	Hull CX0610 - TBN SBI Athena	Q1-15	64,000	Chengxi Shipyard Co. Ltd.
21	Hull CX0651 - TBN SBI Pegasus	Q3-15	64,000	Chengxi Shipyard Co. Ltd.
22	Hull CX0652 - TBN SBI Orion	Q4-15	64,000	Chengxi Shipyard Co. Ltd.
23	Hull CX0612 - TBN SBI Thalia	Q4-15	64,000	Chengxi Shipyard Co. Ltd.
24	Hull CX0653 - TBN SBI Hercules	Q4-15	64,000	Chengxi Shipyard Co. Ltd.
25	Hull CX0627 - TBN SBI Perseus	Q1-16	64,000	Chengxi Shipyard Co. Ltd.
26	Hull CX0654 - TBN SBI Kratos	Q1-16	64,000	Chengxi Shipyard Co. Ltd.
27	Hull CX0655 - TBN SBI Samson	Q2-16	64,000	Chengxi Shipyard Co. Ltd.
28	Hull CX0613 - TBN SBI Phoebe	Q3-16	64,000	Chengxi Shipyard Co. Ltd.
29	Hull CX0656 - TBN SBI Phoenix	Q3-16	64,000	Chengxi Shipyard Co. Ltd.
	Ultramax NB DWT		1,795,800
	Total Newbuild DWT		7,399,400

(1) Expected delivery date relates to quarter during which each vessel is currently expected to be delivered from the shipyard.

F- 17

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

7. Assets Held for Sale

In December 2014, the Company (i) reached agreements with shipyards in South Korea and Romania to modify six newbuilding contracts for Capesize bulk carriers into newbuilding contracts for LR2 product tankers, (ii) reached an agreement to sell four of these LR2 newbuilding contracts to Scorpio Tankers Inc., a related party, and (iii) granted options to Scorpio Tankers Inc. to purchase the two remaining LR2 newbuilding contracts.

The sale price for each of the four LR2 newbuilding contracts is $51,000. The two option contracts, which expire on May 31, 2015, may be exercised by Scorpio Tankers Inc. for a fixed purchase price of $52,500 for each contract.

Also in December 31, 2014, the Company entered into an agreement to sell one Kamsarmax newbuilding drybulk vessel for approximately $30,650. The vessel is currently being constructed at Tsuneishi Group (Zhoushan) Shipbuilding Inc., and has an expected delivery date in the third quarter of 2015.

The Company has classified these contracts for seven vessels as assets held for sale as of December 31, 2014.   Assets held for sale was $43,781 as of December 31, 2014 and represents the proceeds expected to be realized from the sale of these contracts. The Company recorded a write down on assets held for sale aggregating $55,487 which includes (i) the amount by which balances in vessels under construction for these contracts exceeded the selling prices of the contracts net of remaining installments yet to be made under the contracts, including modifications to contract prices of the six LR2 product tanker contracts, (ii) costs expected to be incurred to suppliers relating to the cancellation of orders for the purchase of components that would have been used in the construction of the Capesize vessels prior to their modification, and (iii) the write off of a portion of deferred financing costs associated with a reduction in negotiated loan facilities that would have been collateralized by certain of the modified Capesize vessels.

A summary of assets held for sale is as follows:

	Vessel Name	Expected Delivery (1)	DWT	Shipyard
1	Hull S3120 - TBN SBI Parejo	Q3-16	115,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
2	Hull S3121 - TBN SBI Tuscamina	Q3-16	115,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
3	Hull H5023 - TBN SBI Panatela	Q4-16	112,000	Daewoo Mangalia Heavy Industries S.A.
4	Hull H5024 - TBN SBI Robusto	Q1-17	112,000	Daewoo Mangalia Heavy Industries S.A.
5	Hull H.5003 - TBN SBI Macanudo	Q1-16	115,000	Daehan Shipbuilding Co., Ltd.
6	Hull H.5004 - TBN SBI Cuaba	Q2-16	115,000	Daehan Shipbuilding Co., Ltd.
	Total LR2 HFS NB DWT		684,000
	Kamsarmax Held for Sale
1	Hull SS164 - TBN SBI Salsa	Q3-15	81,600	Tsuneishi Group (Zhoushan) Shipbuilding Inc.
	Total Kamsarmax NB DWT		81,600
	Total HFS DWT		765,600

(1) Expected delivery date relates to quarter during which each vessel is currently expected to be delivered from the shipyard.

8. Commitment and Contingencies

As of December 31, 2014, the Company’s estimated commitments through the expected delivery dates of the 71 vessels under construction aggregate approximately $1,814,350, which will be payable as follows:

2015	$	1,181,099
2016	633,251
	$	1,814,350

F- 18

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

As of December 31, 2014, the Company’s estimated commitments for the seven vessels under construction classified as assets held for sale through the expected delivery dates aggregate approximately $295,305, which will be payable as follows:

2015	$	92,906
2016	175,013
2017	27,386
	$	295,305

As of December 31, 2014, we had a cash balance of $272,673 to fund these future newbuilding commitments; however, a significant portion of our remaining commitments are currently unfunded. If we are not able to borrow additional funds, raise other capital or utilize available cash on hand, we may not be able to acquire these newbuilding vessels, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. 

During the year ended December 31, 2014, the Company incurred charterhire expense of $73,214. As of December 31, 2014, the Company had time chartered-in 20 drybulk vessels. The future estimated minimum charterhire payments for the 19 vessels on fixed dollar amount time charters, excluding the vessel time chartered-in at a rate based on an index and excluding optional periods, are as follows:

2015	$	54,951
2016	31,513
2017	9,978
2018	378
	$	96,820

Time chartered-in vessels

The Company has agreed to time charter-in 20 drybulk vessels. The terms of the time charter-in contracts are summarized as follows:

Vessel Type	Year Built	DWT	Where Built	Daily Base Rate	Earliest Expiry
Post-Panamax	2012	98,700	China	$13,000	15-Oct-16 (1)
Post-Panamax	2009	93,000	China	See Note (2)	09-May-15 (2)
Post-Panamax	2011	93,000	China	$9,500	11-Aug-15 (3)
Kamsarmax	2014	82,500	South Korea	$12,000	23-Jul-15 (4)
Kamsarmax	2009	82,500	Japan	$14,500	28-Jan-15 (5)
Kamsarmax	2012	82,000	South Korea	$15,500	23-Jul-17 (6)
Kamsarmax	2011	81,900	South Korea	$12,750	04-Mar-15 (7)
Kamsarmax	2011	81,500	South Korea	$15,000	15-Jan-16 (8)
Kamsarmax	2012	81,000	South Korea	$15,000	06-Mar-15 (9)
Kamsarmax	2012	79,500	China	$14,000	07-Feb-15 (10)
Panamax	2004	77,500	China	$14,000	03-Jan-17 (11)
Panamax	2014	77,000	Japan	$16,000	10-Jan-15 (12)
Panamax	2014	76,000	China	See Note (13)	19-Jun-15 (13)
Panamax	2007	75,500	South Korea	$13,750	17-Feb-15 (14)
Ultramax	2010	61,000	Japan	$14,200	01-Apr-17 (15)
Supramax	2010	58,000	China	$14,250	12-Dec-15 (16)
Supramax	2011	58,000	China	$13,750	13-Jan-15 (17)
Supramax	2008	58,000	China	$12,250	13-Jun-16 (18)
Supramax	2015	55,000	Japan	$14,000	27-Jan-18 (19)
Handymax	2002	48,500	Japan	$12,000	31-Jan-17 (20)
Aggregate TC DWT		1,500,100

F- 19

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

(1) This vessel has been time chartered-in for 21 to 25 months, with such term to be determined at the Company’s option at $13,000 per day. The Company has the option to extend this time charter for one year at $14,000 per day. The vessel was delivered February 22, 2015.

(2) This vessel has been time chartered-in for ten to 14 months at the Company's option at a rate of 90% of the Baltic Panamax 4TC Index. The Company has the option to extend this time charter for an additional ten to 14 months at the same rate of hire. The vessel was delivered on July 9, 2014.

(3) This vessel has been time chartered-in for 11 to 13 months, with such term to be determined at the Company’s option at $9,500 per day. The Company has the option to extend this time charter for one year at $11,500 per day. The vessel was delivered on September 11, 2014.

(4) This vessel has been time chartered-in for 11 to 14 months, with such term to be determined at the Company’s option at $12,000 per day. The Company has the option to extend this time charter for one year. The vessel was delivered on August 22, 2014.

(5) This vessel has been time chartered-in for 11 to 13 months, with such term to be determined at the Company’s option at $14,500 per day. The Company has the option to extend this time charter for one year at $15,500 per day. The vessel was delivered on March 8, 2014 and was returned to its owner on January 28, 2015.

(6) This vessel has been time chartered-in for 39 to 44 months, with such term to be determined at the Company’s option at $15,500 per day. The Company has the option to extend this time charter for one year at $16,300 per day. The vessel was delivered on April 23, 2014.

(7) This vessel has been time chartered-in for 11 to 13 months, with such term to be determined at the Company’s option at $12,750 per day. The Company has the option to extend this time charter for one year at $13,750 per day. The vessel was delivered on May 3, 2014 and was returned to its owner on March 4, 2015.

(8) This vessel has been time chartered-in for 23 to 28 months, with such term to be determined at the Company’s option at $15,000 per day. The Company has the option to extend the charter for an additional 11 to 13 months at $16,000 per day. The vessel was delivered on February 15, 2014.

(9) This vessel has been time chartered-in for 12 to 14 months, with such term to be determined at the Company’s option at $15,000 per day. The vessel was delivered on February 10, 2014 and was returned to its owner on March 6, 2015.

(10) This vessel has been time chartered-in for 11 to 14 months, with such term to be determined at the Company’s option at $14,000 per day. The Company has the option to extend the charter for an additional 11 to 14 months at $14,750 per day. The vessel was delivered on February 23, 2014 and was returned to its owner on February 7, 2015.

(11) This vessel has been time chartered-in for 32 to 38 months, at the Company’s option at $14,000 per day. The vessel was delivered on May 3, 2014.

(12) This vessel has been time chartered-in for 12 to 13 months, with such term to be determined at the Company’s option at $16,000 per day. The vessel was delivered on March 4, 2014 and was returned to its owner on January 10, 2015, for which the Company incurred a fee of $375 for the early redelivery of this vessel.

(13) This vessel has been time chartered-in for ten to 13 months, with at the Company’s option at $5,000 per day for the first 40 days and $10,000 per day thereafter. The Company has the option to extend the charter for an additional year. The vessel was delivered on August 10, 2014.

(14) This vessel has been time chartered-in for 11 to 13 months, with such term to be determined at the Company’s option at $13,750 per day. The Company has the option to extend the charter for an additional year at $14,750 per day. This vessel was delivered on March 14, 2014 and was returned to its owner on February 17, 2015.

(15) This vessel has been time chartered-in for three years at $14,200 per day. The Company has options to extend the charter for up to three consecutive one year periods at $15,200 per day, $16,200 per day and $17,200 per day, respectively. The vessel was delivered on April 13, 2014.

(16) This vessel has been time chartered-in for 20 to 24 months, with such term to be determined at the Company’s option at $14,250 per day. The Company has the option to extend the charter for an additional ten to 12 months at $14,850 per day. The vessel was delivered on April 12, 2014.

(17) This vessel has been time chartered-in for ten to 13 months, with such term to be determined at the Company’s option at $13,750 per day. The vessel was delivered on March 18, 2014 and was returned to its owner on January 13, 2015.

F- 20

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

(18) This vessel has been time chartered-in for 21 to 25 months, with such term to be determined at the Company’s option at $12,250 per day. The Company has the option to extend this time charter for one year at $13,000 per day. The vessel was delivered on September 13, 2014.

(19) This vessel has been time chartered-in for three years at $14,000 per day. The Company has options to extend the charter for up to two consecutive one year periods at $15,000 per day and $16,000 per day, respectively. The vessel was delivered January 27, 2015.

(20) This vessel has been time chartered-in for 34 to 37 months, with such term to be determined at the Company’s option at $12,000 per day. The Company has options to extend the charter for up to three consecutive one year periods at $12,750 per day, $13,600 per day and $14,800 per day, respectively. The vessel was delivered on March 31, 2014.

The following table sets forth the Company’s total contractual obligations at December 31, 2014 that are not shown elsewhere in the notes to consolidated financial statements:

	Year ending December 31,
	2015		2016		2017		2018		2019		Thereafter		Total
Interest payments (1)	$	6,548	$	6,444	$	6,351	$	6,278	$	4,254	$	—	$	29,875
Commitment fees (2)	7,612		1,330		—		—		—		—		8,942
Commercial management fee (3)	219		219		—		—		—		—		438
Technical management fee (4)	400		400		—		—		—		—		800
	$	14,779	$	8,393	$	6,351	$	6,278	$	4,254	—		$	40,055

(1) Represents the interest payments on outstanding balances of Senior Notes at 7.5% per annum and bank loans, for which the LIBOR rate in effect as of December 31, 2014 of 0.2356% plus a margin of 2.925%.

(2) Represents the commitment fees we will pay under our three credit facilities at December 31, 2014 on which we are incurring commitment fees (as defined in Note 12, the $67.5 Million Senior Secured Credit Facility, the $330.0 Million Senior Secured Credit Facility and the $409.0 Million Senior Secured Credit Facility). Such fees are calculated on the undrawn portion of these credit facilities and assume that the committed amount of each vessel will be drawn when the vessel collateralizing the credit facility is delivered from the shipyards.

(3) Represents the commercial management fee we pay to SCM of $300 per day for each vessel that we own based on the two vessels we owned as of December 31, 2014.

(4) Represents the annual technical management fee we pay to SSM of $200,000 per vessel that we own based on the two vessels we owned as of December 31, 2014.

9. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following:

	December 31,
	2014	2013
Accounts payable	7,934	591
Accrued operating	6,111	41
Accrued administrative	1,766	840
	15,811	1,472

Accrued operating relates to obligations arising from operation of the Company’s owned and chartered-in vessels and construction of the Company’s fleet, such as operating costs and installments on Vessels under construction. Accrued administrative relates to obligations that are corporate or financing in nature, such as payroll, professional fees, interest and commitment fees.

F- 21

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

10. Common Shares

On March 20, 2013, the Company issued 1,500 common shares in connection with its formation.

Between July 1, 2013 and July 16, 2013, the Company issued and sold 31,250,000 common shares, par value $0.01 per share, for net proceeds of $242,800.

On September 24, 2013, the Company issued and sold an additional 33,400,000 common shares for net proceeds of $290,490, as denominated in Norwegian kroner (NOK) as of that date, in Norwegian private placement transactions exempt from registration under the Securities Act. As of September 24, 2013, the Company recorded a receivable from shareholders of $289,956, denominated in NOK, which was not paid until October 2013 when the Company received $288,822 in full settlement of that receivable. The $1,134 difference between the amount initially recorded as a shareholder receivable and the amount subsequently collected was attributable to a change in exchange rate and recorded as foreign exchange loss on the Company’s consolidated statement of operations.

In November 2013, the Company received $291,000 of proceeds from the sale of 32,590,411 common shares that had been consummated in October 2013 in a Norwegian private transaction exempt from registration under the Securities Act.

On December 17, 2013, the Company received $284,018 of proceeds from the sale of 31,300,000 common shares in its initial public offering.

In January 2014, the underwriters in the Company’s initial public offering, which closed on December 17, 2013, exercised in full their option to purchase an additional 4,695,000 common shares at the public offering price of $9.75 per share. The sale of these common shares resulted in net proceeds to the Company of approximately $42,360, after deducting underwriters’ discounts and commissions.

During the third quarter of 2014, the Company issued a total of 52,394 shares to Scorpio Services Holding Limited, or SSH, pursuant to the Administrative Services Agreement relating to two Kamsarmax Vessels delivered under our Newbuilding program (See Note 15). The aggregate value of these shares was $500.

On November 20, 2014 the Company issued 40,000,000 Common shares through a Securities Purchase Agreement with certain institutional investors for the private placement of shares of its common stock, par value $0.01 per share for $150,000. Of this share issuance, SSH acquired 4,000,000 shares for $15,000.

As of December 31, 2014 we have:

• 180,299,695 common shares outstanding, the $0.01 par value of which is recorded as common stock of $1,803.

• Paid-in capital of $1,321,057 which substantially represents the excess of net proceeds from common stock issuances over the par value as well as the amount of cumulative restricted stock amortization.

11. Equity Incentive Plan

Our board of directors has adopted an equity incentive plan, which we refer to as the Equity Incentive Plan, under which directors, officers and employees of us and our subsidiaries, as well as employees of affiliated companies are eligible to receive incentive stock options and non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units and unrestricted common shares. As of December 31, 2014 we reserved a total of 7,012,391 common shares, for issuance under the Equity Incentive Plan, subject to adjustment for changes in capitalization as provided in the Equity Incentive Plan. Our Equity Incentive Plan is administered by our Compensation Committee.

Under the terms of the plan, stock options and stock appreciation rights granted under the plan will have an exercise price equal to the fair market value of a common share on the date of grant, unless otherwise determined by the plan administrator, but in no event will the exercise price be less than the fair market value of a common share on the date of grant. Options and stock appreciation rights will be exercisable at times and under conditions as determined by the plan administrator, but in no event will they be exercisable later than ten years from the date of grant.

The plan administrator may grant shares of restricted stock and awards of restricted stock units subject to vesting, forfeiture and other terms and conditions as determined by the plan administrator.

F- 22

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

Adjustments may be made to outstanding awards in the event of a corporate transaction or change in capitalization or other extraordinary event. In the event of a “change in control” (as defined in the plan), unless otherwise provided by the plan administrator in an award agreement, awards then outstanding will become fully vested and exercisable in full.

Our board of directors may amend or terminate the plan and may amend outstanding awards, provided that no such amendment or termination may be made that would materially impair any rights, or materially increase any obligations, of a grantee under an outstanding award. Shareholder approval of plan amendments will be required under certain circumstances. Unless terminated earlier by our board of directors, the plan will expire ten years from the date the plan is adopted.

On September 30, 2013, we granted an aggregate of 2,775,000 restricted shares to officers and employees. Of this total, 1,395,000 restricted shares vest in three equal installments on July 27, 2015, July 27, 2016 and July 27, 2017. The remaining 1,380,000 restricted shares vest in three equal installments on September 30, 2015, September 30, 2016 and September 30, 2017. The aggregate fair value of these awards is $26,918, which will be amortized as stock-based compensation expense, a component of general and administrative expense, over the vesting periods of each grant.

On November 6, 2013, we granted 1,380,000 restricted shares to officers and employees of the Company. These restricted shares vest in three equal installments on November 6, 2015, November 6, 2016 and November 6, 2017. The fair value of these awards was $13,289, which will be amortized as stock-based compensation expense, a component of general and administrative expense, over the vesting periods of each grant.

On December 17, 2013, we granted 707,020 restricted shares to officers, members of the board of directors and employees of the Company. Of these restricted shares, 617,020 restricted shares vest in three equal installments on December 17, 2015, December 17, 2016 and December 17, 2017 and 90,000 restricted shares vest in three equal installments on December 17, 2014, December 17, 2015 and December 17, 2016. The fair value of these awards was $6,780, which will be amortized as stock-based compensation expense, a component of general and administrative expense, over the vesting periods of each grant.

On February 21, 2014, we granted 2,080,370 restricted shares to officers, members of the board of directors, employees of the Company and certain employees of the Scorpio Group (see Note 15). Of these restricted shares, 1,990,370 restricted shares vest in three equal installments on February 21, 2016, February 21, 2017 and February 21, 2018 and 90,000 restricted shares vest in three equal installments on February 21, 2015, February 21, 2016 and February 21, 2017. The fair value of these awards was $19,410, which will be amortized as stock-based compensation expense, a component of general and administrative expense, over the vesting periods of each grant. 

On May 20, 2014, we granted 68,000 restricted shares to certain employees of the Scorpio Group. These restricted shares vest in three equal installments on February 21, 2016, February 21, 2017 and February 21, 2018. The fair value of these awards was $590, which will be amortized as stock-based compensation expense, a component of general and administrative expense, over the vesting periods of each grant.

F- 23

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

A summary of activity for restricted stock awards during the year ended December 31, 2014 and for the period from March 20, 2013 (date of inception) to December 31, 2013 is a follows:

	Number of Shares		Weighted Average Grant Date Fair Value
Outstanding and nonvested, March 20, 2013	—		$	—
Granted	4,862,020		9.66
Vested	—		—
Forfeited	—		—
Outstanding and nonvested, December 31, 2013	4,862,020		9.66
Granted	2,148,370		9.31
Vested	(30,000	)	9.59
Forfeited	—		—
Outstanding and nonvested, December 31, 2014	6,980,390		$	9.56

The following table summarizes the amortization, which will be included in general and administrative expenses, of all of the Company’s restricted stock grants as of December 31, 2014: 

Restricted Stock Grant Date:
	2015		2016		2017		2018		Total
September 30, 2013	$	8,456	$	4,330	$	1,506	$	—	$	14,292
November 6, 2013	4,463		2,367		940		—		7,770
December 18, 2013	2,335		1,221		474		—		4,030
February 21, 2014	6,976		4,172		1,854		220		13,222
May 20, 2014	235		140		62		7		444
Total by year	$	22,465	$	12,230	$	4,836	$	227	$	39,758

For the year ended December 31, 2014 and for the period from March 20, 2013 (date of inception) to December 31, 2013 we incurred $23,869 and $3,359, respectively, of compensation cost relating to the amortization of restricted stock awards.

As of December 31, 2014, unrecognized compensation cost of $39,758 relating to nonvested stock will be recognized over the weighted average period of 1.1 years.

12. Debt

The Company’s long-term debt consists of Senior Notes and bank loans, summarized as follows:

	December 31, 2014			December 31, 2013
Senior Notes	$	73,625		$	—
Bank Loans:
$39.6 Million Credit Facility	$	33,550		$	—
Less: Current portion	(3,300		)	—
	$	30,250		$	—

F- 24

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

The future principal repayments under the Company’s long-term debt over the next five years is as follows:

	Year ending December 31,
	2015	2016	2017	2018	2019	Total
Senior Notes	—	—	—	—	73,625	73,625
$39.6 Million Credit Facility	3,300	3,300	2,260	2,260	22,430	33,550
Total	3,300	3,300	2,260	2,260	96,055	107,175

Unsecured Senior Notes

On September 22, 2014, the Company issued $65,000 in aggregate principal amount of 7.5% Senior Notes due September 2019 (the “Senior Notes”) and on October 16, 2014 the Company issued an additional $8,625 aggregate principal amount of Senior Notes when the underwriters partially exercised their option to purchase additional Senior Notes on the same terms and conditions.

All terms mentioned are defined in the indenture.

The Senior Notes will mature on September 15, 2019 and bear interest at a rate of 7.5% per year, payable quarterly on each March 15, June 15, September 15 and December 15, commencing on December 15, 2014. The Senior Notes are redeemable at the Company’s option in whole or in part, at any time on or after September 15, 2016 at a redemption price equal to 100% of the principal amount to be redeemed plus accrued and unpaid interest to, but excluding, the redemption date.

The Senior Notes are our senior unsecured obligations and rank equally with all of our existing and future senior unsecured and unsubordinated debt and are effectively subordinated to our existing and future secured debt, to the extent of the value of the assets securing such debt, and will be structurally subordinated to all existing and future debt and other liabilities of our subsidiaries. No sinking fund is provided for the Senior Notes. The Senior Notes were issued in minimum denominations of $25.00 and integral multiples of $25.00 in excess thereof and are listed on the New York Stock Exchange under the symbol “SLTB.”The Senior Notes require us to comply with certain covenants, including financial covenants; restrictions on consolidations, mergers or sales of assets and prohibitions on paying dividends or returning capital to equity holders if a covenant breach or an event of default has occurred or would occur as a result of such payment. If the Company undergoes a change of control, holders may require us to repurchase for cash all or any portion of their notes at a change of control repurchase price equal to 101% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to, but excluding, the change of control purchase date.

The financial covenants include:

• Net borrowings shall not equal or exceed 70% of total assets.

• Net worth shall always exceed $500,000.

The outstanding balance at December 31, 2014 was $73,625, which is classified as long-term, and we were in compliance with the financial covenants relating to the Senior Notes as of that date.

Secured Credit Facilities

As of December 31, 2014, the Company has four credit agreements in place, which are collateralized by certain of the Company’s vessels.

On June 27, 2014, the Company signed a $39,600 loan agreement (the “$39.6 Million Facility”) which will be used to finance a portion of the market value of two Kamsarmax vessels which have been delivered to the Company as of December 31, 2014. The Company was permitted to draw down in two tranches of $19,800, one for each vessel, against which the Company drew down an aggregate of $33,550 in November 2014. The remaining $6,050 is no longer available to be drawn down upon. This facility, which is secured by those two Kamsarmax vessels with an aggregate carrying value of $66,633 as of December 31, 2014, bears interest at LIBOR plus a margin of 2.925% per annum, bore a commitment fee of 1.17% per annum through November 2014 on the undrawn portion of the facility, and matures on June 27, 2019. Quarterly principal repayments for each tranche are $413 for the first eight installments and $283 thereafter with the balance due at maturity. Principal installments under the $39.6 Million Facility in 2015, 2016, 2017, 2018 and 2019 are $3,300, $3,300, $2,260, $2,260 and $22,430, respectively.

On July 29, 2014, the Company signed a $330,000 loan agreement which will be used to finance a portion of the contract price of 16 Ultramax and six Kamsarmax vessels currently under construction for delivery in 2015 and 2016. This facility, which is

F- 25

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

secured by those vessels, bears interest at LIBOR plus a margin of 2.925% per annum, bears a commitment fee of 1.17% per annum on the undrawn portion of the facility, and matures on July 29, 2021.

The Company may draw down in 22 tranches of up to $15,000, one for each vessel. For each tranche, repayment is to be made in quarterly installments with the balance due on the maturity date. For each tranche, repayment is to be made in quarterly installments of $313, with the balance due on the maturity date.

On July 30, 2014, the Company signed a loan agreement for up to $67,500 (the “$67.5 Million Facility”) which will be used to finance a portion of the contract price of two Ultramax and two Kamsarmax vessels currently under construction for delivery in 2015 and 2016. This facility, which is secured by those vessels, bears interest at LIBOR plus a margin of 2.95% per annum, bears a commitment fee of 1.25% per annum on the undrawn portion of the facility, and each tranche matures on earlier of seven years from its drawdown or December 31, 2023.

Under the $67.5 Million Facility, the Company may draw down tranches of up to $16,350 for each of the two Ultramax vessels and up to $17,400 for each of the two Kamsarmax vessels. For each tranche, repayment is to be made in quarterly installments with the balance due on the maturity date. For the Ultramax tranches, installments are made in 28 quarterly payments of $292 with a balloon installment of $8,174 due with the 28th installment. For the Kamsarmax tranches, installments are made in 28 quarterly payments of $311 with a balloon installment of $8,692 due with the 28th installment.

On December 30, 2014, the Company signed a $408,976 senior secured loan facility with two leading European financial institutions (the “$409.0 Million Facility”). The proceeds of this facility are expected to finance a portion of the purchase price of 20 of the vessels in our Newbuilding Program (six Ultramax, nine Kamsarmax, and five Capesize vessels) with expected deliveries in 2015 and 2016. This facility has a six year term with customary financial and restrictive covenants, and interest at LIBOR plus a margin of 3.00% and has a term of six years. This facility is secured by, among other things, a first preferred mortgage on each of the 20 newbuilding vessels and guaranteed by each of the collateral vessel owning subsidiaries.

Each of these four credit agreements has the following financial covenants that require us to maintain (based on terms defined in the credit agreements:

• The ratio of net debt to total capitalization no greater than 0.60 to 1.00.

• Consolidated tangible net worth no less than $500,000 plus (i) 25% of cumulative positive net income (on a consolidated basis) for each fiscal quarter commencing on or after December 31, 2013 and (ii) 50% of the value of any new equity issues occurring on or after December 31, 2013.

• The ratio of EBITDA to net interest expense calculated on a trailing four quarter basis of greater than 1.00 to 1.00 from the quarter ending September 30, 2015 until and including the quarter ending December 31, 2016, 2.00 to 1.00 for the quarter ending March 31, 2017 until and including the quarter ending December 31, 2017 and 2.50 to 1.00 thereafter.

• Minimum liquidity of not less than the greater of $50,000 or $850 per owned vessel.

• Maintain a minimum fair value of the collateral for each credit facility, such that the aggregate fair value of the vessels collateralizing the credit facility be at least between 130% to 140%, depending on the credit facility, of the aggregate principal amount outstanding under such credit facility.

Our credit facilities discussed above have, among other things, the following restrictive covenants which would restrict our ability to:

• incur additional indebtedness;

• sell the collateral vessel, if applicable;

• make additional investments or acquisitions;

• pay dividends, in the event of a default, or if an event of default would occur as a result of the payment of dividends; and

• effect a change of control of us.

In addition, our credit facilities contain customary events of default, including cross-default provisions.

As of December 31, 2014, we are in compliance with the financial covenants of each of our four credit facilities.

F- 26

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

A summary of our outstanding balances and amounts available under our four credit facilities as of December 31, 2014 is as follows:

	As of December 31, 2014
	Amount outstanding		Amount available
$39.6 Million Credit Facility	33,550		—
$330 Million Credit Facility	—		330,000
$67.5 Million Credit Facility	—		67,500
$408.976 Million Credit Facility	—		408,976
Total	$	33,550	$	806,476

13. Fair value of financial instruments

The fair values and carrying values of the Company’s financial instruments at December 31, 2014 and December 31, 2013 which are required to be disclosed at fair value, but not recorded at fair value, are noted below.

	December 31, 2014				December 31, 2013
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial assets:
Cash and cash equivalents	$	272,673	$	272,673	$	733,896	$	733,896
Due from related parties	47,678		47,678		—		—
Prepaid expenses and other current assets	3,872		3,872		61		61
Assets held for sale	43,781		43,781		—		—
Financial liabilities:
Accounts payable and accrued expenses	$	15,811	$	15,811	$	1,472	$	1,472
Due to related parties	1,231		1,231		—		—
Bank loans	33,550		33,550		—		—
Senior Notes	73,625		57,133		—		—

ASC Subtopic 820-10, Fair Value Measurements & Disclosures, applies to all assets and liabilities that are being measured and reported on a fair value basis. This guidance enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 requires significant management judgment. The three levels are defined as follows:

Level 1-Valuations based on quoted prices in active markets for identical instruments that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these instruments does not entail a significant degree of judgment.

Level 2-Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

Level 3-Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

Cash and cash equivalents are considered Level 1 items as they represent liquid assets with short-term maturities. The fair value of bank loans is estimated based on current rates offered to the Company for similar debt of the same remaining maturities. The carrying value approximates the fair market value for the variable rate loans.

The Senior Notes are publicly traded on the New York Stock Exchange and are considered a Level 1 item. The carrying amounts of the Company’s other financial instruments at December 31, 2014 and December 31, 2013 (principally balances with related

F- 27

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

parties, Prepaid expenses and other current assets and Accounts payable and accrued expenses) approximate fair values because of the relatively short maturity of these instruments. The carrying value of amounts Due from related parties classified as noncurrent assets represents working capital balances due from the Scorpio Kamsarmax Pool and Scorpio Ultramax Pool (see Note 15) which are known amounts of cash withheld by from pool distributions which approximate fair value.

The fair value of Assets held for sale (see Note 7) was determined based on the selling price, net of estimated costs to sell, of such assets based on contracts negotiated in December 2014, are considered to be Level 3 items. The following table summarizes the valuation of assets measured on a nonrecurring basis:

	Year ended December 31, 2014				For the period from March 20, 2013 (date of inception) to December 31, 2013
	Total		Significant Unobservable Inputs (Level 3)		Total		Significant Unobservable Inputs (Level 3)
Assets held for sale	$	43,781	$	43,781	$	—	$	—

14. General and Administrative Expenses

General and administrative expense was $30,937 and $5,505 for the year ended December 31, 2014 and for the period from March 20, 2013 (date of inception) to December 31, 2013, respectively. Such amount included $23,869 and $3,359 of restricted stock amortization (noncash) for the year ended December 31, 2014 and for the period from March 20, 2013 (date of inception) to December 31, 2013. The balance was primarily for payroll, directors’ fees, professional fees and insurance.

15. Related Party Transactions

Our Chairman and Chief Executive Officer, Mr. Emanuele Lauro, is a member of the Lolli-Ghetti family, which in 2009 founded Scorpio Tankers Inc. (NYSE: “STNG”), or Scorpio Tankers, a large international shipping company engaged in seaborne transportation of refined petroleum products, of which Mr. Lauro is currently the Chairman and Chief Executive Officer. The Lolli-Ghetti family also owns and controls the Scorpio Group, which includes Scorpio Ship Management S.A.M., or SSM, which provides us with vessel technical management services, Scorpio Commercial Management S.A.M., or SCM, which provides us with vessel commercial management services, Scorpio Services Holding Limited, or SSH, which provides us and other related entities with administrative services and services related to the acquisition of vessels and Scorpio UK Limited, or SUK. Our Co-Founder, President and Director, Mr. Robert Bugbee is also the President and a Director of Scorpio Tankers, has a senior management position at the Scorpio Group. SSM and SCM also provide technical and commercial management services to Scorpio Tankers as well as unaffiliated vessel owners.

We entered into an Administrative Services Agreement with SSH, a party related to us, for the provision of administrative staff, office space and accounting, legal compliance, financial and information technology services. Under the terms of this agreement, we reimburse SSH for the reasonable direct or indirect expenses it incurs in providing us with the administrative services described above. SSH also arranges vessel sales and purchases for us. The services provided to us by SSH may be sub-contracted to other entities within the Scorpio Group. We have begun incurring costs to SSH which will increase as the vessels in our Newbuilding Program are delivered to us.

Pursuant to the Administrative Services Agreement, we will reimburse SSH for the reasonable direct or indirect expenses it incurs in providing us with the administrative services described above and a pro-rata portion of the salary incurred by SSH for an internal auditor. We will also pay SSH a fee for arranging vessel acquisitions, including newbuildings, payable in shares of our common stock. The number of shares to be issued was 31,250 shares for each of the first 17 vessels ordered under our Newbuilding Program. For the remaining newbuildings ordered, the number of shares for each vessel ordered was determined by dividing $250,000 by the market value of our common shares based on the volume weighted average price of our common shares over the 30 trading day period immediately preceding the contract date of a definitive agreement to acquire any vessel. For the 80 vessels in our Newbuilding Program, an aggregate of 2,168,741 shares will be issued to SSH, ranging from 25,497 shares to 31,250 shares for each vessel. These shares will be issued to SSH upon the delivery of each vessel. Of this total, we issued 52,394 shares of our common stock to SSH for the two vessels delivered to us in 2014. In addition, SSH has agreed with us not to own any drybulk carriers greater than 30,000 dwt for so long as the Administrative Services Agreement is in full force and effect. This agreement may be terminated by SSH after the third anniversary of our initial public offering upon 12 months’ notice or by us with 24 months’ notice.

F- 28

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

During July 2013, we issued and sold 1,250,000 common shares to SSH for $10,000 as part of a series of Norwegian private transactions exempt from registration under the Securities Act. These common shares were subject to a contractual lock-up until July 2014. During November 2014, we issued and sold 4,000,000 shares to SSH for $15,000 as part of a private placement transaction.

Our vessels are commercially managed by Scorpio Commercial Management S.A.M. (“SCM”) and technically managed by SSM pursuant to a Master Agreement, which may be terminated by either party upon 24 months’ notice. SCM and SSM are companies affiliated with us. In addition, our Co-founder, Chairman and Chief Executive Officer, Emanuele Lauro, is a member of the Lolli-Ghetti family, which owns and controls SCM, our commercial manager, and SSM, our technical manager. We expect that additional vessels that we may acquire in the future will also be managed under the Master Agreement or on substantially similar terms.

SCM’s services include securing employment for our vessels in the spot market and on time charters. SCM also manages the Scorpio Group Pools (spot market-oriented vessel pools) which include Scorpio Ultramax Pool and the Scorpio Kamsarmax Pool and will manage the Scorpio Capesize Pool in which we expect our Newbuilding Program will be employed and in which our owned and time chartered-in vessels are employed.

Transactions with entities controlled by the Lolli-Ghetti family and with Scorpio Tankers (herein referred to as related party affiliates) in the consolidated statement of operations and balance sheet are as follows:

For the year ended December 31, 2014 and 2013,we had the following balances with related parties, which have been included in the consolidated statement of operations:

	For the year ended December 31,
	2014		2013
Vessel revenue
Scorpio Kamsarmax Pool (1)	$	34,986	$	—
Scorpio Ultramax Pool (1)	10,196		—
SCM (2)	31		—
Total vessel revenue	$	45,213	$	—
Vessel operating cost:
SSM (3)	$	122	$	—
General and administrative expense:
SCM (2)	148		—
SSM (3)	51		—
SSH (4)	56		—
SUK (5)	717		—
Total general and administrative expense	$	972	$	—

F- 29

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

At December 31, 2014 and 2013, we had the following balances with related parties, which have been included in the consolidated balance sheets:

	As of		For the period from March 20, 2013 (date of inception) to
	December 31, 2014		December 31, 2013
Assets
Due from related parties-current:
Scorpio Kamsarmax Pool (1)	$	8,482	$	—
Scorpio Ultramax Pool (1)	2,460		—
Scorpio Tankers(6)	31,277		—
SSM (3)	154		—
Total due from related parties-current	$	42,373	$	—
Due from related parties non-current:
Scorpio Kamsarmax Pool (1)	$	3,272	$	—
Scorpio Ultramax Pool (1)	2,033		—
Total due from related parties non-current	$	5,305	$	—
Liabilities
Due to related parties-current:
SUK (5)	$	44	$	—
SSM (3)	1,131		—
SSH (4)	56		—
Total due from related parties-current	$	1,231	$	—

(1) During the year ended December 31, 2014, we earned $34,986 from chartering our owned and chartered-in vessels to the Scorpio Kamsarmax Pool and $10,196 from chartering our chartered-in vessels to the Scorpio Ultramax Pool. As of December 31, 2014, we have balances due from these charterers (primarily consisting of working capital, undistributed earnings and reimbursable costs) which have been classified as current assets of $8,482 and $2,460 from the Scorpio Kamsarmax Pool and the Scorpio Ultramax Pool, respectively. As of December 31, 2014, there were non-current balances due from these charterers which relate to working capital retained by the pools for member vessels that do not have provisions to exit the pool in the next 12 months of $3,272 and $2,033 for the Scorpio Kamsarmax Pool and Scorpio Ultramax pool, respectively.

The Scorpio Kamsarmax Pool and the Scorpio Ultramax Pool were significant customers for the year ended December 31, 2014, accounting 71.4%and 20.8% of our total vessel revenue, respectively.

(2) For commercial management of any of our vessels that does not operate in one of these pools, we will pay SCM a daily fee of $300 per vessel, plus a 1.75% commission on the gross revenues per charter fixture. Effective November 20, 2014, SCM has agreed to reduce the1.75% commission to 1.00% until the first day when the closing price of the Company’s common stock is not less than $9.75 per share, adjusted to include all authorized dividends paid on the Company’s share capital, at which time the commission will revert to 1.75%. The Scorpio Ultramax Pool and the Scorpio Kamsarmax Pool participants, including us and third-party owners of similar vessels, pay SCM a pool management fee of $300 per vessel per day, plus a 1.75% commission on the gross revenues per charter fixture. During the year ended December 31, 2014, we recorded $31 of vessel revenue relating to SCM, consisting of: (a) a $100 reduction in commissions charged to the Scorpio Group Pools pursuant to the decrease of commission SCM receives on gross freight from 1.75% to 1.00% effective November 20, 2014. SCM has agreed to refund to the Company $100 as a result of this reduced commission; partially offset by (b) $69 of commissions on the gross revenue of certain vessels time chartered-in for which their initial voyage took place before being admitted to the Scorpio Group Pools. In addition, the Company incurred $148 of general and administrative expenses to SCM

F- 30

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

consisting of a fee of $300 per vessel day for the periods in which our time chartered-in vessels were not operating in one of the pools and for fees charged to four time chartered-in vessels which were returned to their owners.

(3) SSM’s services include providing technical support, such as arranging the hiring of qualified officers and crew, supervising the maintenance and performance of vessels, purchasing supplies, spare parts and new equipment, arranging and supervising drydocking and repairs, and monitoring regulatory and classification society compliance and customer standards. We pay SSM an annual fee of $200,000 per vessel to provide technical management services for each of our vessels upon delivery. For the year ended December 31, 2014, we incurred a cost to SSM for technical support, which is a component of vessel operating costs, of $122, none of which is unpaid at December 31, 2014. For the year ended December 31, 2014, we incurred $51 of rent allocated from SSM. In addition, representatives of SSM, including certain subcontractors, provide us with construction supervisory services while our vessels are being constructed in shipyards. For these services, we will compensate SSM for its direct expenses, which can vary between $200,000 and $500,000 per vessel. In connection with supervision of 67 of the vessels in our Newbuilding Program, as of December 31, 2014, we incurred a cost to SSM of $29,000 per vessel. Of this aggregate cost of $1,943, $1,131 is unpaid as of December 31, 2014. We also advanced to SSM $154 as of December 31, 2014, relating to equipment to be placed on board certain of the Vessels under construction.

(4) We incur a fee to SSH of $300 per day for each owned vessel, which is included in general and administrative expenses, which aggregated $56 for the year ended December 31, 2014. As of December 31, 2014 this amount was unpaid.

(5) For the year December 31, 2014, SUK charged us $717 for allocated salaries of certain SUK employees relating to the services such employees performed for the Company, of which $44 was unpaid as of December 31, 2014.

(6) In December 31, 2014, we agreed to sell four LR2 tankers to Scorpio Tankers and granted Scorpio Tankers an option to purchase two additional LR2 tankers (see Note 7). Pursuant to this, we paid Scorpio Tankers $31,277 as a security deposit relating to estimated costs we would incur to the shipyard for converting the vessels from Capesize contracts to LR2 contracts and scheduled installments on vessels expected to occur prior to the closing date of the sale. This deposit is reimbursable to us upon closing.

F- 31

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

16. Segments

During 2014, the Company placed its time chartered-in vessels into two pools, the Scorpio Ultramax Pool, in which the Company placed its time chartered-in vessels ranging from 48,500 DWT to 61,000 DWT, and the Scorpio Kamsarmax Pool in which the Company placed its two owned Kamsarmax vessels and its time chartered-in vessels ranging from 75,500 DWT to 98,700 DWT. In addition to the Company’s Ultramax and Kamsarmax segments, the Company has identified a third Capesize segment which includes vessels of approximately 180,000 DWT. Although each vessel within its respective class qualifies as an operating segment under U.S. GAAP, each vessel also exhibits similar long-term financial performance and similar economic characteristics to the other vessels within the respective vessel class, thereby meeting the aggregation criteria in U.S. GAAP. We have therefore chosen to present our segment information by vessel class using the aggregated information from the individual vessels.

The Company’s vessels regularly move between countries in international waters, over dozens of trade routes and, as a result, the disclosure of financial information about geographic areas is impracticable.

Certain of the corporate general and administrative expenses incurred by the Company are not attributable to any specific segment. Accordingly, these costs are not allocated to any of the Company’s segments and are included in the results below as “Corporate”.

The following schedule presents segment information about the Company’s operations for the year ended December 31, 2014:

	Capesize			Kamsarmax			Ultramax			Corporate			Total
Vessel revenue	$	—		$	38,770		$	10,217		$	—		$	48,987
Voyage expenses	—			(3,505		)	(74		)	—			(3,579		)
Vessel operating cost	—			(1,600		)	—			—			(1,600		)
Charterhire expense	—			(57,909		)	(15,305		)	—			(73,214		)
Vessel depreciation	—			(686		)	—			—			(686		)
General and administrative expenses	(39		)	(251		)	(26		)	(31,593		)	(31,909		)
Write down on assets held for sale	(51,968		)	(2,934		)	—			(585		)	(55,487		)
Interest income	—			—			—			1,052			1,052
Foreign exchange gain	—			—			—			43			43
Financial expense, net	—			—			—			(172		)	(172		)
Segment loss	$	(52,007	)	$	(28,115	)	$	(5,188	)	$	(31,255	)	$	(116,565	)

The following schedule presents segment information about the Company’s balance sheet as of December 31, 2014 and December 31, 2013:

Identifiable assets
	December 31, 2014		December 31, 2013
Held by vessel owning subsidiaries or allocated to segments:
Capesize	$	438,256	$	54,772
Kamsarmax	236,278		132,114
Ultramax	288,828		184,905
Held by parent and other subsidiaries, not allocated to segments:
Cash and cash equivalents	265,818		733,818
Other	95,025		75
Total identifiable assets	$	1,324,205	$	1,105,684

F- 32

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

17. Unaudited Quarterly Results of Operations

In the opinion of the Company’s management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation have been included on a quarterly basis.

	2014 Quarter Ended												2013 Quarter Ended
	Mar-31			Jun-30			Sep-30			Dec-31			Mar-31		Jun-30			Sep-30			Dec-31
Revenues	$	5,467		$	13,180		$	12,608		$	17,732		$	—	$	—		$	—		$	—
Operating loss	(11,157		)	(15,289		)	(19,069		)	(71,973		)	—		(1		)	(675		)	(4,829		)
Net loss	(10,656		)	(15,002		)	(18,909		)	(71,998		)	—		(1		)	(2,737		)	(3,569		)
Net loss per share Basic (2)	$	(0.08	)	$	(0.11	)	$	(0.14	)	$	(0.48	)	$	—	$	—		$	(0.08	)	$	(0.04	)
Net loss per share Diluted(2)	(0.08		)	(0.11		)	(0.14		)	(0.48		)	—		—			(0.08		)	(0.04		)
Weighted average common shares outstanding- Basic	132,610,911			133,236,911			133,248,016			151,119,957			1,500		1,500			33,453,698			91,023,403
Weighted average common shares outstanding- Diluted	132,910,911			133,236,911			133,248,016			151,119,957			1,500		1,500			33,453,698			91,023,403

(1) Operating loss and net loss for the fourth quarter of 2014 includes a write down on assets held for sale of $55,487 .

(2) Amounts may not total to annual loss because each  quarter and year are calculated separately based on basic and diluted weighted-average common shares outstanding during that period.

18. Subsequent Events

$240,264 Credit Facility 

On January 15, 2015, we entered into a $411,264 senior secured credit facility with a group of financial institutions, which was subsequently reduced on March 26, 2015 by $171,000 to $240,264 due to the removal from financing under this facility of five Capesize newbuilding vessels that we have agreed to convert into product tankers. The proceeds of this facility are expected to finance a portion of the purchase price of seven Capesize vessels in our Newbuilding Program that are under construction at Sungdong. This facility is secured by, among other things, a first preferred mortgage on the seven Capesize newbuilding vessels and guaranteed by each of the collateral vessel owning subsidiaries. Portions of this facility bear interest at LIBOR plus an applicable margin of between 1.90% and 2.95% and a portion has a fixed coupon of 6.25%. This facility matures six years from the delivery of the final vessel securing the facility, and in certain circumstances, the facility matures 12 years after the delivery of each financed vessel. The terms and conditions of the facility, including covenants, are similar to those in our existing credit facilities and customary for financings of this type.

F- 33

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

$42,000 Credit Facility

On January 30, 2015, we entered into a $42,000 credit facility with a leading European financial institution. The proceeds of this facility are expected to finance a portion of the purchase price of two Kamsarmax vessels in our Newbuilding Program (of which one Kamsarmax vessel was delivered in January 2015 to us from Imabari and one Kamsarmax vessel is under construction at Imabari). The facility may be drawn in two tranches, each of which has a final maturity of six years from the date of the respective vessel delivery from the yard. This facility bears interest at LIBOR plus a margin of 2.80%. This facility is secured by, among other things, a first preferred mortgage on the two Kamsarmax newbuilding vessels and guaranteed by each of the collateral vessel owning subsidiaries. The terms and conditions of the facility, including covenants, are similar to those in our existing credit facilities and customary for financings of this type.

$26,000 Credit Facility

On February 27, 2015, we entered into a $26,000 senior secured credit facility with ABN AMRO Bank N.V., the Netherlands. The proceeds of this facility are expected to be used to finance a portion of the purchase price of one Capesize vessel, which was delivered to us during the first quarter of 2015. This facility matures at the earlier of (a) the date falling six months after the drawdown date; and (b) the date ten business days after the date on which the Chinese Ministry of Finance has approved insurance coverage to be provided by the China Export & Credit Insurance Corporation, or Sinosure, with respect to our $230,325 Credit Facility (discussed below) and drawings can be made under such facility. This facility bears interest at LIBOR plus an initial margin of 2.00% with monthly step ups of 0.25% until a margin of 3.25% is reached. This facility is secured by, among other things, a first preferred mortgage on the Capesize newbuilding vessel and a parent company guarantee. The terms and conditions of the facility, including covenants, are similar to those in our existing credit facilities and customary for financings of this type.

$19,800 Credit Facility

On March 2, 2015, we entered into a senior secured credit facility for up to $19,800. The facility was previously announced as a $39,600 credit facility, that has now been reduced to a size of $19,800 due to the removal of the financing on one Kamsarmax vessel which we have classified as held for sale. The facility was arranged by ABN AMRO Bank N.V., the Netherlands, with insurance cover provided from Sinosure. The proceeds of this facility are expected to be used to finance a portion of the purchase price of one Kamsarmax vessel currently under construction at Tsuneishi with expected delivery during the first quarter of 2016. The facility matures ten years from the date of delivery of the vessel and bears interest at LIBOR plus a margin of 2.50%. This facility is secured by, among other things, a first priority mortgage on one Kamsarmax newbuilding vessel and a parent company guarantee. The terms and conditions of the facility, including covenants, are similar to those in our existing credit facilities and customary for financings of this type.

$230,325 Credit Facility

On March 2, 2015, we received a commitment from ABN AMRO Bank N.V. and The Export-Import Bank of China, for a loan facility of up to $230,325. This commitment finalizes a previously announced memorandum of understanding for a $234,900 credit facility. This facility was arranged by ABN AMRO Bank N.V., The Netherlands, with insurance cover to be provided from Sinosure. The proceeds of this facility are expected to be used to finance a portion of the purchase price of seven Capesize vessels (of which one vessel was delivered to us in February 2015 from Waigaoqiao and six vessels are currently under construction at Waigaoqiao with expected deliveries between the third quarter of 2015 and the second quarter of 2016). The terms and conditions of this facility, including covenants, will be similar to those in our existing credit facilities and customary for financings of this type. This facility is subject to customary conditions precedent and the execution of definitive documentation. The creditfacility is pending approval from the Chinese Ministry of Finance on the insurance coverage to be provided by Sinosure.

Agreements to Modify Existing Shipbuilding Contracts for Three Capesize Vessels

On March 4, 2015 the Company reached agreements with a shipyard in South Korea to modify existing newbuilding contracts for three Capesize Vessels. The three contracts, two for vessels scheduled for delivery during the first quarter of 2016 and one for a vessel scheduled for delivery during the second quarter of 2016, will now provide for the construction of three LR1 product tankers, two of which will be scheduled for delivery during the second quarter of 2017 and one during the third quarter of 2017. As a result, the Company expects to incur a loss of approximately $23,000 relating to writing down the contracts to their estimated fair market value. Also, upon completion of customary documentation, the LR1 contracts will be re-classified on the balance sheet as assets held for sale.

F- 34

SCORPIO BULKERS INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014 AND 2013

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE, PER DAY AND PER VESSEL DATA)

Newbuilding Vessels Deliveries

The Company has taken delivery of the following Newbuilding vessels during 2015:

• SBI Bravo, an Ultramax vessel, was delivered from Nantong COSCO KHI Ship Engineering Co., Ltd. on January 9, 2015 and commenced operations in the Ultramax Pool.

• SBI Athena, an Ultramax vessel, was delivered from Chengxi Shipyard Co., Ltd. on January 9, 2015 and commenced operations in the Ultramax Pool.

• SBI Samba, a Kamsarmax vessel, was delivered from Imabari Shipbuilding Co. Ltd. on January 23, 2015 and commenced operations in the Kamsarmax Pool.

• SBI Antares, an Ultramax vessel, was delivered from Nantong COSCO KHI Ship Engineering Co., Ltd. on January 30, 2015 and commenced operations in the Ultramax Pool.

• SBI Puro, a Capesize vessel, was delivered from Shanghai Waigaoqiao Shipbuilding Co., Ltd. on February 6, 2015 and commenced employment under a time charter to a major European charterer for ten to13 months at $13,800 per day.

• SBI Leo, an Ultramax vessel, was delivered from Dalian COSCO KHI Ship Engineering Co. Ltd. on February 16, 2015 and commenced operations in the Ultramax Pool.

Installments Paid to Shipyards

From January 1, 2015 to March 31, 2015, we paid $176,023 of installments to shipyards, including payments for the six vessels delivered to us through March 31, 2015.

From January 1, 2015 to March 31, 2015, we paid $19,756 of installments to shipyards relating to vessels under construction that have been classified as held for sale as of December 31, 2014. Such payments are reflected as increases in Assets held for sale.

Borrowings Under Credit Facilities

From January 1, 2015 to March 31, 2015, we received proceeds of $106,388 from borrowings under our credit facilities.

F- 35

EX-4.27

Exhibit - 4.27

EXECUTION VERSION

CREDIT AGREEMENT

among

SCORPIO BULKERS INC.

as Borrower,

VARIOUS LENDERS

and

NORDEA BANK FINLAND PLC, NEW YORK BRANCH,

as Administrative Agent and as Collateral Agent

__________________________________

Dated as of December 30, 2014

__________________________________

NORDEA BANK FINLAND PLC, NEW YORK BRANCH and
MERCHANT BANKING, SKANDINAVISKA ENSKILDA BANKEN AB (PUBL),

as Joint Bookrunners and Lead Arrangers

Americas 9311184 (2K)

Exhibit - 4.27

TABLE OF CONTENTS

			Page
SECTION 1.    Definitions and Accounting Terms			1
	1.01	Defined Terms	1
	1.02	Other Definitional Provisions	31
	1.03	Rounding	31
SECTION 2.    Amount and Terms of Credit Facilities			32
	2.01	The Commitments	32
	2.02	Minimum Amount of Each Borrowing; Limitation on Number of Borrowings	33
	2.03	Notice of Borrowing	33
	2.04	Disbursement of Funds	33
	2.05	Notes	34
	2.06	Pro Rata Borrowings	35
	2.07	Interest	35
	2.08	Interest Periods	36
	2.09	Increased Costs, Illegality, Market Disruption, etc.	37
	2.10	Compensation	39
	2.11	Minimum Amount of Each Borrowing; Limitation on Number of Borrowings	39
	2.12	Change of Lending Office; Limitation on Additional Amounts	40
SECTION 3.    Commitment Commission; Reductions of Commitment			41
	3.01	Commitment Commission; Fees	41
	3.02	Voluntary Termination of Unutilized Commitments	41
	3.03	Mandatory Reduction of Commitments	42
SECTION 4.    Prepayments; Payments; Taxes			42
	4.01	Voluntary Prepayments	42
	4.02	Mandatory Repayments and Commitment Reductions	43
	4.03	Method and Place of Payment	45
	4.04	Net Payments; Taxes	45
	4.05	Application of Proceeds	47
SECTION 5.    Conditions Precedent			49
	5.01	Closing Date	49
	5.02	Conditions to each Vessel Acquisition Borrowing Date	51
	5.03	Conditions to each Borrowing Date	53
SECTION 6.    Representations and Warranties			54
	6.01	Corporate/Limited Liability Company/Limited Partnership Status	54
	6.02	Corporate Power and Authority	54
	6.03	Title; Maintenance of Properties	54

Americas 9311184 (2K) i

TABLE OF CONTENTS(continued)

			Page
	6.04	Legal Validity and Enforceability	54
	6.05	No Violation	55
	6.06	Governmental Approvals	55
	6.07	Balance Sheets; Financial Condition; Undisclosed Liabilities	56
	6.08	Litigation	56
	6.09	True and Complete Disclosure	56
	6.10	Use of Proceeds; Margin Regulations	57
	6.11	Taxes; Tax Returns and Payments	57
	6.12	Compliance with ERISA	58
	6.13	Subsidiaries	60
	6.14	Compliance with Statutes, etc.	60
	6.15	Investment Company Act	60
	6.16	Pollution and Other Regulations	60
	6.17	Insurance	61
	6.18	Concerning the Collateral Vessels	61
	6.19	Money Laundering and Sanctions Laws	61
	6.20	No Immunity	62
	6.21	Pari Passu or Priority Status	62
	6.22	Solvency; Winding‑up, etc.	62
	6.23	Completeness of Documentation	63
	6.24	No Undisclosed Commissions	63
SECTION 7.    Affirmative Covenants			63
	7.01	Information Covenants	63
	7.02	Books, Records and Inspections	66
	7.03	Maintenance of Property; Insurance	67
	7.04	Corporate Franchises	67
	7.05	Compliance with Statutes, etc.	67
	7.06	Compliance with Environmental Laws	67
	7.07	ERISA	68
	7.08	End of Fiscal Years; Fiscal Quarters	69
	7.09	Performance of Obligations	69
	7.10	Payment of Taxes	69
	7.11	Further Assurances	70
	7.12	Deposit of Earnings	70
	7.13	Ownership of Subsidiaries and Collateral Vessels	71
	7.14	Citizenship; Flag of Collateral Vessel; Collateral Vessel Classifications; Operation of Collateral Vessels	71
	7.15	Use of Proceeds	73
	7.16	Charter Contracts	73
	7.17	Separate Existence	73
	7.18	Sanctions	74
	7.19	Maintenance of Listing	74

Americas 9311184 (2K) ii

TABLE OF CONTENTS(continued)

			Page
SECTION 8.Negative Covenants			74
	8.01	Liens	74
	8.02	Consolidation, Merger, Sale of Assets, etc.	75
	8.03	Restricted Payments	76
	8.04	Indebtedness	77
	8.05	Advances, Investments and Loans	77
	8.06	Transactions with Affiliates	78
	8.07	Financial Covenants	78
	8.08	Limitation on Modifications of Certain Documents; etc	80
	8.09	Limitation on Certain Restrictions on Subsidiaries	80
	8.10	Limitation on Issuance of Capital Stock	80
	8.11	Business	80
	8.12	Bank Accounts	81
	8.13	Jurisdiction of Employment	81
	8.14	Operation of Collateral Vessels	81
	8.15	Interest Rate Protection Agreements	82
SECTION 9.Events of Default			82
	9.01	Payments	82
	9.02	Representations, etc.	82
	9.03	Covenants	82
	9.04	Default Under Other Agreements	82
	9.05	Bankruptcy, etc.	83
	9.06	ERISA	83
	9.07	Security Documents	84
	9.08	Subsidiaries Guaranty	84
	9.09	Judgments	85
	9.10	Illegality	85
	9.11	Termination of Business	85
	9.12	Material Adverse Effect	85
	9.13	Authorizations and Consents	85
	9.14	Arrest; Expropriation	85
SECTION 10.Agency and Security Trustee Provisions			86
	10.01	Appointment	86
	10.02	Nature of Duties	87
	10.03	Lack of Reliance on the Agents	87
	10.04	Certain Rights of the Agents	88
	10.05	Reliance	88
	10.06	Indemnification	88
	10.07	The Administrative Agent in its Individual Capacity	88
	10.08	Holders	89
	10.09	Resignation by the Administrative Agent	89

Americas 9311184 (2K) iii

TABLE OF CONTENTS(continued)

			Page
	10.10	Collateral Matters	89
	10.11	Delivery of Information	92
SECTION 11.    Miscellaneous			92
	11.01	Payment of Expenses, etc.	92
	11.02	Right of Setoff	93
	11.03	Notices	94
	11.04	Benefit of Agreement; Assignments; Participations	94
	11.05	No Waiver; Remedies Cumulative	96
	11.06	Payments Pro Rata	96
	11.07	Calculations; Computations	97
	11.08	Agreement Binding	97
	11.09	GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL	97
	11.10	Counterparts	99
	11.11	Effectiveness	99
	11.12	Headings Descriptive	99
	11.13	Amendment or Waiver; etc.	99
	11.14	Survival	101
	11.15	Domicile of Loans	101
	11.16	Confidentiality	101
	11.17	Register	102
	11.18	Judgment Currency	102
	11.19	Language	103
	11.20	Waiver of Immunity	103
	11.21	USA PATRIOT Act Notice	103
	11.22	Severability	103
	11.23	Flag Jurisdiction Transfer	104

Americas 9311184 (2K) iv

TABLE OF CONTENTS
(continued)

SCHEDULE I -    Commitments

SCHEDULE II -    Lender Addresses

SCHEDULE III -    Subsidiaries

SCHEDULE IV-A -    Required Insurance

SCHEDULE IV-B Vessel Insurance

SCHEDULE V -    ERISA

SCHEDULE VI -    Collateral Vessels

SCHEDULE VII -    Notice Addresses

SCHEDULE VIII -    Scheduled Term Amortization Payments and Scheduled Revolving Commitment Reductions

EXHIBIT A -    Form of Notice of Borrowing

EXHIBIT B-1 -    Form of Term Note

EXHIBIT B-2 -    Form of Revolving Note

EXHIBIT C -    Form of Solvency Certificate

EXHIBIT D -    Form of Joinder Agreement

EXHIBIT E Form of Subsidiaries Guaranty

EXHIBIT F -    Form of Pledge Agreement

EXHIBIT G -    Form of Global Assignment Agreement

EXHIBIT H -    Form of Compliance Certificate

EXHIBIT I -    Form of Subordination Provisions

EXHIBIT J -    Form of Assignment and Assumption Agreement

EXHIBIT K -    Form of Collateral Vessel Mortgage

Americas 9311184 (2K)

Exhibit - 4.27

CREDIT AGREEMENT, dated as of December 30, 2014, among SCORPIO BULKERS INC., a company incorporated under the laws of the Republic of the Marshall Islands (the “Borrower”), the Lenders party hereto from time to time, NORDEA BANK FINLAND PLC, NEW YORK BRANCH (“Nordea”) and MERCHANT BANKING, SKANDINAVISKA ENSKILDA BANKEN AB (PUBL), as Joint Bookrunners and Lead Arrangers (the “Lead Arrangers”), and NORDEA BANK FINLAND PLC, NEW YORK BRANCH, as Administrative Agent (in such capacity, the “Administrative Agent”) and as Collateral Agent under the Security Documents (in such capacity, the “Collateral Agent”). All capitalized terms used herein and defined in Section 1.01 are used herein as therein defined.

W I T N E S S E T H:

WHEREAS, subject to and upon the terms and conditions herein set forth, the Lenders are willing to make available to the Borrower the Credit Facilities provided for herein:

NOW, THEREFORE, IT IS AGREED:

Section 1.Definitions and Accounting Terms.

1.01Defined Terms. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

“Acceptable Classification Society” shall mean DNV GL, Lloyds Register, American Bureau of Shipping (ABS) and Bureau Veritas or such other first class vessel classification society that is a member of the International Association of Classification Societies that the Administrative Agent may approve from time to time.

“Acceptable Flag Jurisdiction” shall mean the Republic of the Marshall Islands or such other flag jurisdiction as may be reasonably acceptable to the Required Lenders.

“Acceptable Yard” shall mean Chengxi Shipyard Co. Ltd, Daehan Shipbuilding Co., Ltd, Daewoo Mangalia Heavy Industries S.A, Hudong-Zhonghua (Group) Co., Ltd, Jiangsu Yangzijiang Shipbuilding Co., Ltd, Imabari Shipbuilding Co. Ltd and Mitsui Engineering & Shipbuilding Co., Ltd or such other shipyard as may be reasonably acceptable to the Required Lenders.

“Account Control Agreement” shall have the meaning provided in the definition of “Collateral and Guaranty Requirements”.

“Additional Collateral” shall mean additional Collateral reasonably satisfactory to the Required Lenders posted in favor of the Collateral Agent to cure non-compliance with Section 8.07(e) (it being understood that (i) cash collateral comprised of Dollars (which shall be valued at par) and/or (ii) a vessel meeting the requirements of a Substitution Vessel shall be satisfactory), pursuant to security documentation reasonably satisfactory in form and substance to the Collateral Agent, in an aggregate amount sufficient to cure such non-compliance.

Americas 9311184 (2K)

Exhibit - 4.27

“Administrative Agent” shall have the meaning provided in the first paragraph of this Agreement, and shall include any successor thereto.

“Affiliate” shall mean, with respect to any Person, any other Person (including, for purposes of Section 8.06 only, all directors, officers and partners of such Person) directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person; provided, however, that for purposes of Section 8.06, an Affiliate of the Borrower shall include any Person that directly or indirectly owns more than 20% of any class of the capital stock of the Borrower and any officer or director of the Borrower or any of its Subsidiaries. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise. Notwithstanding anything to the contrary contained above, for purposes of Section 8.06, neither the Administrative Agent, nor the Collateral Agent, nor any Lead Arranger nor any Lender (or any of their respective affiliates) shall be deemed to constitute an Affiliate of the Borrower or its Subsidiaries in connection with the Credit Documents or its dealings or arrangements relating thereto.

“Agents” shall mean, collectively, the Administrative Agent, the Collateral Agent and the Lead Arrangers.

“Aggregate Appraised Value” shall mean at any time, the sum of the Appraised Value of all Collateral Vessels owned by the Subsidiary Guarantors at such time which are not then subject to an Event of Loss.

“Agreement” shall mean this Credit Agreement, as modified, supplemented, amended or restated from time to time.

“Applicable Margin” shall mean 3.00% per annum.

“Appraisal” shall mean, with respect to a Collateral Vessel, a written appraisal by an Approved Appraiser of the fair market value of such Collateral Vessel on the basis of a charter-free arm’s length transaction between any able buyer and seller not under duress.

“Appraised Value” of any Collateral Vessel at any time shall mean the average of the fair market value of such Collateral Vessel on an individual charter-free basis as set forth on the Appraisals of at least two Approved Appraisers most recently delivered to, or obtained by, the Administrative Agent prior to such time pursuant to Section 5.02(d) or 7.01(d).

“Approved Appraiser” shall mean Clarkson PLC, Astrup Fearnleys AS, R.S. Platou ASA, Arrow Sale & Purchase Limited, Braemar Seascope Limited, Howe Robinson, Maersk Broker, Barry Rogliano Salles (BRS) or such other independent appraisal firm nominated by the Borrower and consented to by the Administrative Agent (such consent not to be unreasonably withheld or delayed) for the purposes of providing an Appraisal for a Collateral Vessel.

“Assignment and Assumption Agreement” shall mean an assignment and assumption agreement substantially in the form of Exhibit J (appropriately completed).

Americas 9311184 (2K) 2

Exhibit - 4.27

“Attributable Loan Amount” shall mean, for any Collateral Vessel on any date of determination, an amount equal to:

(i)the principal amount of the Loans made in respect of such Collateral Vessel on the Vessel Acquisition Borrowing Date related to such Collateral Vessel, less

(ii)    the aggregate amount of the Collateral Vessel Amortization Amounts in respect of such Collateral Vessel for each Payment Date which have occurred prior to such date, less

(iii)    the amount by which the Attributable Loan Amount for such Collateral Vessel has been reduced prior to such date pursuant to Section 4.02(g).

“Authorized Officer” shall mean the chairman of the board, the president, any vice president, the treasurer, the secretary, any assistant secretary, any other financial officer, an authorized manager and any other officer (or a Person or Persons so designated by any officer) of any Credit Party.

“Available Revolving Loan Commitment” shall mean, at any time, the amount equal to the sum of the Attributable Loan Amounts for each Revolving Loan Vessel then owned by the Borrower or any Subsidiary Guarantor.

“Bankruptcy Code” shall have the meaning provided in Section 9.05.

“Borrower” shall have the meaning provided in the first paragraph of this Agreement.

“Borrowing” shall mean a borrowing of Loans from all the Lenders (other than any Lender which has not funded its share of a Borrowing in accordance with this Agreement) having Commitments on a given date having the same Interest Period.

“Borrowing Date” shall mean (i) a Vessel Acquisition Borrowing Date or (ii) at any time after the Revolving Loan Vessel Acquisition Period, the date on which Revolving Loans are incurred by the Borrower pursuant to Section 2.01(b).

“Business Day” shall mean any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions are authorized or required by law or other government action to close in New York City or London.

“Capital Expenditures” shall mean, with respect to any Person, all expenditures by such Person which should be capitalized in accordance with GAAP and, without duplication, the amount of Capitalized Lease Obligations incurred by such Person.

“Capitalized Lease Obligations” of any Person shall mean all rental obligations which, under GAAP, are or will be required to be capitalized on the books of such Person, in each case taken at the amount thereof accounted for as indebtedness in accordance with such principles.

Americas 9311184 (2K) 3

Exhibit - 4.27

“Cash Equivalents” shall mean:

(i)securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than one year from the date of acquisition,

(ii)time deposits and certificates of deposit of, or deposits held with, any commercial bank having, or which is the principal banking subsidiary of a bank holding company having capital, surplus and undivided profits aggregating in excess of $500,000,000, with maturities of not more than one year from the date of acquisition by such Person,

(iii)time deposits and certificates of deposit of, or deposits held with, any Lender,

(iv)repurchase obligations with a term of not more than 90 days for underlying securities of the types described in clause (i) above entered into with any bank meeting the qualifications specified in clause (ii) above,

(v)commercial paper issued by any Person incorporated in the United States rated at least A-1 or the equivalent thereof by S&P or at least P‑1 or the equivalent thereof by Moody’s and in each case maturing not more than one year after the date of acquisition by such Person,

(vi)investments in money market funds substantially all of whose assets are comprised of securities of the types described in clauses (i) through (v) above, and

(vii)such other securities or instruments as the Required Lenders shall agree in writing.

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as the same may be amended from time to time, 42 U.S.C. § 9601 etseq.

“Change in Law” shall mean the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, if not already enacted as of the Closing Date, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

Americas 9311184 (2K) 4

Exhibit - 4.27

“Change of Control” shall be deemed to occur if:

(a) any of the Subsidiary Guarantors ceases to be owned (directly or indirectly) 100% by the Borrower; provided that any sale of a Subsidiary Guarantor pursuant to Section 8.02 shall be permitted subject to compliance with Section 4.02(c),

(b) a “person” or “group” (within the meaning of Section 13(d) and 14(d)(2) of the Exchange Act, as in effect on the Closing Date) other than any holder of the Borrower’s Equity Interests (as of the Closing Date), becomes the ultimate “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 of the Exchange Act) and including by reason of any change in the ultimate “beneficial owner” of the Equity Interests of the Borrower of more than 35% of the total voting power or voting stock (calculated on a fully diluted basis), or

(c) the Continuing Directors shall cease to constitute a majority of the members of the board of directors of the Borrower.

“Claims” shall have the meaning provided in the definition of “Environmental Claims”.

“Closing Date” shall have the meaning provided in Section 11.11.

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to the Code are to the Code as in effect at the date of this Agreement and any subsequent provisions of the Code, amendatory thereof, supplemental thereto or substituted therefor.

“Collateral” shall mean all property (whether real or personal) with respect to which any security interests have been granted (or purported to be granted) pursuant to any Security Document, including, without limitation, all Pledge Agreement Collateral, all Earnings and Insurance Collateral, all Collateral Vessels, and all cash and Cash Equivalents at any time delivered as collateral thereunder or as required hereunder.

“Collateral Agent” shall mean the Administrative Agent acting as mortgagee, security trustee or collateral agent for the Secured Creditors pursuant to the Security Documents.

“Collateral and Guaranty Requirements” shall mean with respect to a Collateral Vessel, the requirement that:

(i)    each Subsidiary of the Borrower that is required to be a Subsidiary Guarantor in accordance with the definition thereof shall have duly authorized, executed and delivered to the Administrative Agent the Subsidiaries Guaranty, substantially in the form of Exhibit E (as modified, supplemented or amended from time to time, the “Subsidiaries Guaranty”) or a joinder thereto in the form of Exhibit D hereto, and the Subsidiaries Guaranty shall be in full force and effect;

(ii)    the Borrower and each Subsidiary Guarantor (determined as provided in clause (i) above) shall have duly authorized, executed and delivered the Pledge Agreement substantially in the form of Exhibit F (as modified, supplemented or amended from time to time,

Americas 9311184 (2K) 5

Exhibit - 4.27

the “Pledge Agreement”) or a joinder thereto in the form of Exhibit D hereto, and pursuant to which all of the Equity Interests of the Credit Party that owns such Collateral Vessel (and the Equity Interests of the Subsidiary that owns, directly or indirectly, the Equity Interests in such Credit Party, if any) shall have been pledged to secure the Obligations and shall have (A) delivered to the Collateral Agent all the Pledged Securities referred to therein, together with executed and undated stock powers in the case of capital stock constituting Pledged Securities, and (B) otherwise complied with all of the requirements set forth in the Pledge Agreement;

(iii)    the Borrower, the Subsidiary Guarantor that owns, directly or indirectly, such Collateral Vessel, the Collateral Agent and Nordea, as depositary bank, shall have duly executed and delivered a control agreement substantially in the form attached to the Pledge Agreement with respect to each Concentration Account (as modified, supplemented or amended from time to time, the “Account Control Agreement”);

(iv)    the Borrower and the Credit Party that owns such Collateral Vessel shall have duly authorized, executed and delivered a Global Assignment Agreement substantially in the form of Exhibit G (as modified, supplemented or amended from time to time, the “Global Assignment Agreement”) or a joinder thereto in the form of Exhibit D hereto, and shall use commercially reasonable efforts to provide appropriate notices and consents related thereto, together granting a security interest and lien on all of such Credit Party’s (i) present and future Earnings and Insurance Collateral and (ii) present and future rights and receivables under Intra-Group Charters and Permitted Third Party Charters, in each case together with proper Financing Statements (Form UCC-1) in form for filing under the UCC or in other appropriate filing offices of each jurisdiction as may be necessary to perfect the security interests purported to be created by the Global Assignment Agreement;

(v)    the Credit Party that owns such Collateral Vessel shall have duly authorized, executed and delivered, and caused to be recorded in the appropriate vessel registry a Collateral Vessel Mortgage with respect to such Collateral Vessel and such Collateral Vessel Mortgage shall be effective to create in favor of the Collateral Agent and/or the Lenders a legal, valid and enforceable first priority security interest, in and lien upon such Collateral Vessel, subject only to Permitted Liens;

(vi)    all filings, deliveries of instruments and other actions necessary or desirable in the reasonable opinion of the Collateral Agent to perfect and preserve the security interests described in clauses (ii) through and (v) above shall have been duly effected and the Collateral Agent shall have received evidence thereof in form and substance reasonably satisfactory to the Collateral Agent;

(vii)    the Administrative Agent shall have received an Appraisal from two Approved Appraisers of such Collateral Vessel of a recent date (and in no event dated earlier than 30 days prior to the relevant Borrowing Date) in scope, form and substance reasonably satisfactory to the Administrative Agent;

(viii)    the Administrative Agent shall have received each of the following:

Americas 9311184 (2K) 6

Exhibit - 4.27

(a)    evidence that such Collateral Vessel is registered in the name of the relevant Subsidiary Guarantor in the register of the applicable Acceptable Flag Jurisdiction and that such Collateral Vessel and all other Collateral related to such Collateral Vessel are free from Liens other than Permitted Liens; and

(b)    evidence that (i) the transfer of title to such Collateral Vessel from the builder to the relevant Subsidiary Guarantor has been duly recorded at the relevant registry in the applicable Approved Flag Jurisdiction free from Liens other than Permitted Liens and (ii) any prior registration of such Collateral Vessel in the name of any third party in any ship register, if any, has been deleted; and

(c)    an interim class certificate (and as soon as reasonably practicable after the delivery of such Collateral Vessel, a final class certificate) from an Acceptable Classification Society indicating that such Collateral Vessel meets the criteria specified in Section 7.14(c); and

(d)    certified copies of all agreements related to the technical and commercial management of each Collateral Vessel to which the Borrower or a Subsidiary Guarantor is a party; and

(e)    certified copies of all ISM Code and ISPS Code documentation for each Collateral Vessel; and

(f)    a report, in form and scope reasonably satisfactory to the Administrative Agent, from a firm of independent marine insurance brokers reasonably acceptable to the Administrative Agent (it being understood that AON and Marsh are reasonably acceptable) with respect to the insurance maintained by the Credit Parties in respect of such Collateral Vessel, together with a certificate from such broker certifying that such insurances, (i) are placed with such insurance companies and/or underwriters and/or clubs, in such amounts, against such risks, and in such form, as are customarily insured against by similarly situated insureds for the protection of the Administrative Agent and/or the Lenders as secured party and mortgagee, (ii) conform with the insurance requirements of each respective Collateral Vessel Mortgage (it being understood that, except as required by applicable law, the insurance requirements of such Collateral Vessel Mortgage shall not exceed the Required Insurance) and (iii) include, without limitation, copies of the Required Insurance;

(ix)    the Administrative Agent shall have received from:

(a)     special New York counsel to the Borrower and the Credit Parties (which shall be Seward & Kissel LLP or another New York law firm reasonably acceptable to the Administrative Agent), an opinion addressed to the Administrative Agent and each of the Lenders and dated as of the initial Borrowing Date for such Collateral Vessel,

(b)     special Republic of the Marshall Islands counsel to each of the Credit Parties (which shall be Seward & Kissel LLP or another law firm qualified to render an

Americas 9311184 (2K) 7

Exhibit - 4.27

opinion as to the Republic of the Marshall Islands law reasonably acceptable to the Administrative Agent), an opinion addressed to the Administrative Agent and each of the Lenders and dated as of the initial Borrowing Date for such Collateral Vessel, and

(c)     if applicable, counsel to each of the Credit Parties in the jurisdiction of the flag of such Collateral Vessel (other than the Marshall Islands, which is covered by the opinion in clause (b)), an opinion addressed to the Administrative Agent and each of the Lenders and dated as of the initial Borrowing Date for such Collateral Vessel covering such matters as shall be required by the Administrative Agent,

in each case which shall be in form and substance reasonably acceptable to the Administrative Agent; and

(x)    to the extent not previously delivered, the Administrative Agent shall have received (i) a certificate, dated the relevant Borrowing Date and reasonably acceptable to the Administrative Agent, signed by an Authorized Officer, member or general partner of each Credit Party which owns the Relevant Vessel, with appropriate insertions, together with copies of the Organizational Documents of such Credit Party and the resolutions of such Credit Party referred to in such certificate authorizing the consummation of the Transaction; and (ii) copies of governmental approvals (if any) and good standing certificates which the Administrative Agent may have reasonably requested in connection therewith.

“Collateral Disposition” shall mean (i) the sale, lease, transfer or other disposition by the Borrower or a Subsidiary Guarantor of any Collateral Vessel, other than (x) pursuant to an Intra-Group Charter or a Permitted Third Party Charter by the Borrower or any of its Subsidiaries to any Person or (y) by one Credit Party to another Credit Party, provided that the Collateral and Guaranty Requirements for such Collateral Vessel shall be satisfied at all times, or (ii) any Event of Loss of any Collateral Vessel.

“Collateral Vessel” shall mean (i) each Term Loan Vessel, (ii) each Revolving Loan Vessel or Substitution Vessel, the acquisition of which is financed by a Revolving Loan pursuant to the terms hereof and (iii) any vessel provided as Additional Collateral.

“Collateral Vessel Acquisition” shall mean the acquisition by a Subsidiary Guarantor of a Collateral Vessel.

“Collateral Vessel Amortization Amount” shall mean, for any Collateral Vessel for any Payment Date, the amount equal to

(x) the Attributable Loan Amount for such Collateral Vessel on the Vessel Acquisition Borrowing Date for such Collateral Vessel divided by

(y) the product of:

(i)    15 minus a fraction, the numerator of which is the number of days between the date of delivery of such Collateral Vessel by the builder thereof (whether to the relevant

Americas 9311184 (2K) 8

Exhibit - 4.27

Subsidiary Guarantor which owns such Collateral Vessel, in the case of Term Loan Vessels or Revolving Loan Vessels, or the original owner, in the case of Substitution Vessels) and the Vessel Acquisition Borrowing Date for such Collateral Vessel and the denominator of which is 365, and

(ii)    four,

provided, that with respect to only the first Payment Date for each Collateral Vessel (and not any subsequent Payment Date), the Collateral Vessel Amortization Amount for such Collateral Vessel for such Payment Date shall be reduced pro rata based on the number of days in the relevant fiscal quarter in which such Payment Date occurs which have elapsed prior to the Vessel Acquisition Borrowing Date for such Collateral Vessel.

“Collateral Vessel Mortgage” shall mean a first preferred mortgage, in substantially the form of Exhibit K attached hereto, or a first priority mortgage and related deed of covenant (as applicable) in such form as may be reasonably satisfactory to the Administrative Agent and the Borrower (including, without limitation, any first preferred mortgage or first priority mortgage and related deed of covenant, as applicable, delivered pursuant to a Flag Jurisdiction Transfer), as such mortgage (and deed of covenant, if applicable) may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof granted by the applicable Collateral Vessel Owner in favor of the Collateral Agent, as security trustee and as mortgagee.

“Collateral Vessel Owner” shall mean, at any time, a Subsidiary Guarantor which owns a Collateral Vessel.

“Commercial Manager” shall mean collectively, one or more commercial managers selected by the Borrower and reasonably acceptable to the Required Lenders including, without limitation, Scorpio Commercial Management S.A.M.

“Commitment” shall mean, for each Lender, a Term Loan Commitment, or a Revolving Loan Commitment.

“Commitment Commission” shall have the meaning provided in Section 3.01(a).

“Commitment Termination Date” shall mean (i) with respect to Term Loan Commitments, the Term Loan Commitment Termination Date and (ii) with respect to Revolving Loan Commitments, the Revolving Loan Commitment Termination Date.

“Concentration Accounts” shall mean those certain deposit accounts of any Subsidiary Guarantor designated in the Pledge Agreement as being pledged to the Collateral Agent, which deposit accounts shall be held by Nordea Bank Finland plc, New York Branch, and into which the Borrower shall procure that all hires, freights, insurance proceeds, pool income and other sums payable in respect of the Collateral Vessels are credited and which amounts shall be freely available to the Borrower, provided that no Event of Default has occurred and is continuing.

“Consolidated EBITDA” shall mean, for any accounting period, Consolidated Net Income for such accounting period:

Americas 9311184 (2K) 9

Exhibit - 4.27

(a)    plus, to the extent deducted in computing the Consolidated Net Income of the Borrower for such accounting period, the sum, without duplication, of:

(i)    federal, state, local and foreign income taxes and tax distributions,

(ii)    Consolidated Net Interest Expense,

(iii)     depreciation, depletion, amortization of intangibles, restricted stock and other non-cash charges or non-cash losses (including non-cash transaction expenses and the amortization of debt discounts) and any extraordinary losses not incurred in the ordinary course of business,

(iv)    expenses incurred in connection with a special or intermediate survey (including any underwater survey done in lieu thereof) of a vessel owned by the Borrower or any of its subsidiaries during such period, and

(v)    any drydocking expenses;

(b)    minus, to the extent added in computing Consolidated Net Income for such accounting period, (i) any non-cash income or losses or non-cash gains or losses and (ii) any extraordinary gains or losses on asset sales not incurred in the ordinary course of business.

“Consolidated Funded Debt” shall mean, as at any date of determination, the sum of the following for the Borrower and its Subsidiaries determined (without duplication) on a consolidated basis for such period and in accordance with GAAP consistently applied: (a) all Financial Indebtedness; and (b) all obligations to pay a specific purchase price for goods or services whether or not delivered or accepted (including take-or-pay and similar obligations which in accordance with GAAP would be shown on the liability side of a balance sheet); provided that balance sheet accruals for future dry-dock expenses shall not be classified as Consolidated Funded Debt.

“Consolidated Liquidity” shall mean, on a consolidated basis at any time, the sum of (a) cash, (b) Cash Equivalents, in each case held by the Borrower and its Subsidiaries at such time on a freely available and unencumbered basis and (c) amounts readily available for drawing under committed revolving credit facilities with a maturity date in excess of 12 months after the date of determination of Consolidated Liquidity and which remain undrawn and could be drawn for general working capital or other general corporate purposes and provided that no event of default has occurred and is continuing under any such revolving credit facility and the Borrower is entitled to draw under such revolving credit facility; provided that 66 2/3% of Consolidated Liquidity shall at all times consist of cash.

“Consolidated Net Income” shall mean, for any period, the consolidated net after tax income of the Borrower and its Subsidiaries for such period determined in accordance with GAAP.

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Exhibit - 4.27

“Consolidated Net Interest Expense” shall mean, for any period, the aggregate of all interest, commissions, discounts and other costs, charges or expenses accruing that are due from the Borrower and all of its Subsidiaries during such period less (i) commitment fees, (ii) interest income received and (iii) amortization of deferred charges and arrangement fees, determined on a consolidated basis in accordance with GAAP and as shown in the consolidated statements of income for the Borrower delivered pursuant to Section 7.01(a) and (b).

“Consolidated Tangible Net Worth” shall mean, at any time of determination for any Person, the Net Worth of such Person and its Subsidiaries at such time determined on a consolidated basis in accordance with GAAP minus goodwill.

“Consolidated Total Capitalization” shall mean, at any time of determination for any Person, the sum of Consolidated Funded Debt of such Person at such time and Consolidated Tangible Net Worth of such Person at such time.

“Contingent Obligation” shall mean, as to any Person, any obligation of such Person guaranteeing or intended to guarantee any Financial Indebtedness, leases, dividends or other obligations (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (x) for the purchase or payment of any such primary obligation or (y) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term Contingent Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business and any products warranties extended in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made (or, if the less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.

“Continuing Directors” shall mean the directors of the Borrower on the Closing Date and each other director, if such other director’s nomination for election to the board of directors of the Borrower is recommended by a majority of the then Continuing Directors.

“Credit Document Obligations” shall mean, except to the extent consisting of obligations, liabilities or indebtedness with respect to Interest Rate Protection Agreements, the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, principal, premium, interest, fees and indemnities (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or

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Exhibit - 4.27

similar proceeding of any Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding)) (other than an Excluded Swap Obligation) of each Credit Party to the Lender Creditors (provided, in respect of the Lender Creditors which are Lenders, such aforementioned obligations, liabilities and indebtedness shall arise only for such Lenders (in such capacity) in respect of Loans and/or Commitments), whether now existing or hereafter incurred under, arising out of, or in connection with this Agreement and the other Credit Documents to which such Credit Party is a party (including, in the case of each Credit Party that is a Subsidiary Guarantor, all such obligations, liabilities and indebtedness of such Credit Party under the Subsidiaries Guaranty) (other than Excluded Swap Obligations) and the due performance and compliance by such Credit Party with all of the terms, conditions and agreements contained in this Agreement and in such other Credit Documents.

“Credit Documents” shall mean this Agreement, the Fee Letter, each Note, each Security Document, the Subsidiaries Guaranty and, after the execution and delivery thereof, each additional guaranty or additional security document executed pursuant to Section 7.11.

“Credit Facilities” shall mean, collectively, the Term Loan Facility and the Revolving Loan Facility.

“Credit Party” shall mean the Borrower and each Subsidiary Guarantor and “Credit Party” shall mean any one of them.

“Default” shall mean any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default.

“Defaulting Lender” shall mean any Lender with respect to which a Lender Default is in effect.

“Disbursement Authorization” shall have the meaning provided in Section 5.02.

“Disqualified Stock” shall mean, with respect to any Person, any Equity Interest of such Person that, by its terms (or by the terms of any security or other Equity Interests into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition, (a) matures or is mandatorily redeemable (other than solely for Qualified Capital Stock), pursuant to a sinking fund obligation or otherwise (except as a result of a Change of Control or asset sale so long as any rights of the holders thereof upon the occurrence of a Change of Control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable) and the termination of the Commitments, (b) is redeemable at the option of the holder thereof (other than solely for Qualified Capital Stock of such Person), in whole or in part, (c) provides for the scheduled payments of dividends in cash or (d) is or becomes convertible into or exchangeable for Financial Indebtedness or any other Equity Interests that would constitute Disqualified Stock of such Person, in each case, prior to the date that is ninety-one (91) days after the Maturity Date; provided, however, that only the portion of the Equity Interests that so mature or are mandatorily redeemable, are so convertible or exchangeable or are so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided, further, however, that if such Equity Interest of such Person is issued to any employee or to any plan for

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Exhibit - 4.27

the benefit of employees of the Borrower or its Subsidiaries or by any such plan to such employees, such Equity Interests shall not constitute Disqualified Stock solely because they may be required to be repurchased by the Borrower or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations or as a result of such employee's termination, death or disability.

“Dividend” with respect to any Person shall mean that such Person has declared or paid a dividend or returned any equity capital to its stockholders or members or authorized or made any other distribution, payment or delivery of property (other than common stock or the right to purchase any of such stock of such Person) or cash to its stockholders or members as such, or redeemed, retired, purchased or otherwise acquired, directly or indirectly, for a consideration any shares of any class of its capital stock or membership interests outstanding on or after the Closing Date (or any options or warrants issued by such Person with respect to its capital stock), or set aside any funds for any of the foregoing purposes, or shall have permitted any of its Subsidiaries to purchase or otherwise acquire for a consideration any shares of any class of the capital stock of, or equity interests in, such Person outstanding on or after the Closing Date (or any options or warrants issued by such Person with respect to its capital stock or other equity interests). Without limiting the foregoing, “Dividends” with respect to any Person shall also include all payments made or required to be made by such Person with respect to any stock appreciation rights, plans, equity incentive or achievement plans or any similar plans or setting aside of any funds for the foregoing purposes.

“Dollars” and the sign “$” shall each mean lawful money of the United States.

“Earnings and Insurance Collateral” shall mean all “Earnings Collateral” and “Insurance Collateral”, as the case may be, as defined in the Global Assignment Agreement.

“ECP” shall have the meaning assigned to such term in the definition of Excluded Swap Obligation.

“Eligible Transferee” shall mean and include a commercial bank or financial institution and, in the event of the occurrence and continuance of an Event of Default, a fund or other Person which regularly purchases interests in loans or extensions of credit of the types made pursuant to this Agreement, any other Person which would constitute a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act as in effect on the Closing Date or other “accredited investor” (as defined in Regulation D of the Securities Act), provided that neither (i) any Credit Party or any Affiliate of any Credit Party nor (ii) any natural Person shall be an Eligible Transferee at any time.

“Environmental Claims” shall mean any and all administrative, regulatory or judicial actions, suits, demands, demand letters, directives, claims, liens, notices of noncompliance or violation, investigations or proceedings relating in any way to any Environmental Law or any permit issued, or any approval given, under any such Environmental Law (hereafter, “Claims”), including, without limitation, (a) any and all Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law, and (b) any and all Claims by any third party seeking damages, contribution,

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indemnification, cost recovery, compensation or injunctive relief in connection with alleged injury or threat of injury to health, safety or the environment due to the presence of Hazardous Materials.

“Environmental Law” shall mean any applicable Federal, state, foreign or local statute, Legal Requirement, law, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable written policy and rule of common law now or hereafter in effect and in each case as amended, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, to the extent binding on the Borrower or any of its Subsidiaries, relating to the environment, and/or Hazardous Materials, including, without limitation, CERCLA; OPA; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 etseq.; the Hazardous Material Transportation Act, 49 U.S.C. § 5101 etseq.; the Occupational Safety and Health Act, 29 U.S.C. § 651 etseq. (to the extent it regulates occupational exposure to Hazardous Materials); and any state and local or foreign counterparts or equivalents, in each case as amended from time to time.

“Environmental Release” shall mean any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing or migration into the environment.

“Equity Interests” of any Person shall mean any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any common stock, preferred stock, any limited or general partnership interest and any limited liability company membership interest.

“Equity Proceeds” means the net cash proceeds from the issuance of common or preferred stock of the Borrower.

“ERISA” shall mean the U.S. Employee Retirement Income Security Act of 1974, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA, as in effect at the date of this Agreement and any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated) which together with the Borrower or a Subsidiary of the Borrower would be deemed to be a “single employer” within the meaning of Section 414(b), (c), (m) or (o) of the Code.

“Eurodollar Rate” shall mean with respect to each Interest Period for a Loan, the offered rate (rounded upward to the nearest 1/100 of one percent) for deposits of Dollars for a period equivalent to such period at or about 11:00 A.M. (London time) on the second Business Day before the first day of such period as is displayed on Reuters LIBOR 01 Page (or such other service as may be nominated by the ICE Benchmark Administration (or the successor thereto if the ICE Benchmark Administration is no longer making a London Interbank Offered Rate available) (the “Screen Rate”), provided that if the Screen Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement; provided, further that if on such date no such rate is so displayed, the Eurodollar Rate for such period shall be the arithmetic average (rounded upward to the nearest 1/100 of 1%) of the rate quoted to the Administrative Agent by the Reference Banks

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Exhibit - 4.27

for deposits of Dollars in an amount approximately equal to the amount in relation to which the Eurodollar Rate is to be determined for a period equivalent to such applicable Interest Period by the prime banks in the London interbank Eurodollar market at or about 11:00 A.M. (London time) on the second Business Day before the first day of such period, in each case divided (and rounded upward to the nearest 1/100 of 1%) by a percentage equal to 100% minus the then stated maximum rate of all reserve requirements (including, without limitation, any marginal, emergency, supplemental, special or other reserves required by applicable law) applicable to any member bank of the Federal Reserve System in respect of Eurocurrency funding or liabilities as defined in Regulation D (or any successor category of liabilities under Regulation D); provided that in the event the Eurodollar Rate calculated in the immediately preceding proviso shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.

“Event of Default” shall have the meaning provided in Section 9.

“Event of Loss” shall mean any of the following events: (x) the actual or constructive total loss of a Collateral Vessel or the agreed or compromised total loss of a Collateral Vessel; or (y) the capture, condemnation, confiscation, expropriation, requisition for title and not hire, purchase, seizure or forfeiture of, or any taking of title to, a Collateral Vessel. An Event of Loss shall be deemed to have occurred: (i) in the event of an actual loss of a Collateral Vessel, at the time and on the date of such loss or if that is not known at noon Greenwich Mean Time on the date which such Collateral Vessel was last heard from; (ii) in the event of damage which results in a constructive or compromised or arranged total loss of a Collateral Vessel, at the time and on the date on which notice claiming the loss of the Collateral Vessel is given to the insurers; or (iii) in the case of an event referred to in clause (y) above, at the time and on the date on which such event is expressed to take effect by the Person making the same. Notwithstanding the foregoing, if such Collateral Vessel shall have been returned to any Credit Party following any event referred to in clause (y) above prior to the date upon which payment is required to be made under Section 4.02(c), no Event of Loss shall be deemed to have occurred by reason of such event.

“Exchange Act” shall mean the Securities Exchange Act of 1934.

“Excluded Swap Obligation” shall mean, with respect to any Credit Party, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Credit Party of, or the grant by such Credit Party of a security interest to secure, such Swap Obligation (or any Guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Credit Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder (each an “ECP”) at the time the Guaranty of such Credit Party or the grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guarantee or security interest is or becomes illegal.

“Excluded Taxes” shall mean any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes

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Exhibit - 4.27

imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal  withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 2.11) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 4.04, amounts with respect to such Taxes were payable either to such Lender's assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 4.04(c), (d) any U.S. federal withholding Taxes imposed under FATCA.

“Executive Order” shall have the meaning provided in Section 6.19(a).

“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantially comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any intergovernmental agreement to implement the foregoing.

“Federal Funds Rate” shall mean, for any day, an interest rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published for such day (or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 11:00 A.M. (New York time) on such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by the Administrative Agent in its sole discretion.

“Fee Letter” shall mean that certain Amended and Restated Fee Letter dated as of the date hereof among the Borrower and the Lead Arrangers.

“Fees” shall mean all amounts payable pursuant to or referred to in Section 3.01.

“Financial Covenants” shall mean the covenants set forth in Section 8.07.

“Financial Indebtedness” shall mean, as to any Person at any date of determination, without duplication, (i) all obligations of such Person for principal, interest or any other sum payable in respect of any moneys borrowed or raised by such Person, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person in respect of any acceptance credit, guarantee, or letter of credit facility or equivalent made available to such Person (including reimbursement obligations with respect thereto), (iv) all obligations of such Person to pay the deferred purchase price of property or services, which purchase price is due more than six months after the date of placing such property in service or taking delivery

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Exhibit - 4.27

thereof or the completion of such services, except trade payables, (v) all Capitalized Lease Obligations of such Person as lessee, (vi) all Financial Indebtedness of persons other than such Person secured by a security interest on any asset of such Person, whether or not such Financial Indebtedness is assumed by such Person; provided that the amount of such Financial Indebtedness shall be the lesser of (i) the fair market value of such asset at such date of determination and (ii) the amount of such Financial Indebtedness, and (vii) all Financial Indebtedness of persons other than such Person under any guarantee, indemnity or similar obligation entered into by such Person to the extent such Financial Indebtedness is guaranteed, indemnified, etc., by such Person. The amount of Financial Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and, with respect to contingent obligations described in clauses (vi) and (vii) above, the maximum liability upon the occurrence of the contingency giving rise to the obligation, provided that (i) the amount outstanding at any time of any Financial Indebtedness issued with an original issue discount is the face amount of such Financial Indebtedness less the remaining unamortized portion of such original issue discount of such Financial Indebtedness at such time and (ii) Financial Indebtedness shall not include any liability for taxes.

“Flag Jurisdiction” shall mean the flag jurisdiction of the Collateral Vessel on the initial Borrowing Date for such Collateral Vessel, which, for the avoidance of doubt, must be an Acceptable Flag Jurisdiction.

“Flag Jurisdiction Transfer” shall mean the transfer of the registration and flag of a Collateral Vessel from one Acceptable Flag Jurisdiction to another Acceptable Flag Jurisdiction, provided that the following conditions are satisfied with respect to such exchange:

(i)    On each Flag Jurisdiction Transfer Date, the Credit Party which is consummating a Flag Jurisdiction Transfer on such date shall have duly authorized, executed and delivered, and caused to be recorded in the appropriate vessel registry a Collateral Vessel Mortgage (which Collateral Vessel Mortgage shall, to the extent possible, be registered as a “continuation mortgage” to the original Collateral Vessel Mortgage recorded in the initial Acceptable Flag Jurisdiction) with respect to the Collateral Vessel being transferred (the “Transferred Collateral Vessel”) and such Collateral Vessel Mortgage shall be effective to create in favor of the Collateral Agent and/or the Lenders a legal, valid and enforceable first priority security interest, in and lien upon such Transferred Collateral Vessel, subject only to Permitted Liens. All filings, deliveries of instruments and other actions necessary or desirable in the reasonable opinion of the Collateral Agent to perfect and preserve such security interests shall have been duly effected and the Collateral Agent shall have received evidence thereof in form and substance reasonably satisfactory to the Collateral Agent.

(ii)    On each Flag Jurisdiction Transfer Date, the Administrative Agent shall have received from counsel to the Credit Parties consummating the relevant Flag Jurisdiction Transfer reasonably satisfactory to the Administrative Agent practicing in those jurisdictions in which the Transferred Collateral Vessel is registered and/or the Credit Party owning such Transferred Collateral Vessel is organized, opinions which shall be addressed to the Administrative Agent and each of the Lenders and dated such Flag Jurisdiction Transfer

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Exhibit - 4.27

Date, which shall (x) be in form and substance reasonably acceptable to the Administrative Agent and (y) cover the perfection of the security interests granted pursuant to the Collateral Vessel Mortgage(s) and such other matters incident thereto as the Administrative Agent may reasonably request.

(iii)    On each Flag Jurisdiction Transfer Date:

(A)    the Administrative Agent shall have received (x) a certificate of ownership issued by the registry of the applicable Acceptable Flag Jurisdiction showing the registered ownership of the Transferred Collateral Vessel transferred on such date in the name of the relevant Subsidiary Guarantor and (y) a certificate of ownership and encumbrance or, as applicable a transcript of registry with respect to the Transferred Collateral Vessel transferred on such date, indicating no record liens other than Liens in favor of the Collateral Agent and/or the Lenders and Permitted Liens; and

(B)    the Administrative Agent shall have received a certificate reasonably satisfactory to the Administrative Agent, from a firm of independent marine insurance brokers reasonably acceptable to the Administrative Agent with respect to the insurance maintained by the Credit Party in respect of the Transferred Collateral Vessel transferred on such date certifying that such insurances (i) are placed with such insurance companies and/or underwriters and/or clubs, in such amounts, against such risks, and in such form, as are customarily insured against by similarly situated insureds for the protection of the Collateral Agent as mortgagee and (ii) conform with the insurance requirements of the respective Collateral Vessel Mortgages.

(iv)    On or prior to each Flag Jurisdiction Transfer Date, the Administrative Agent shall have received a certificate, dated the Flag Jurisdiction Transfer Date, signed by an Authorized Officer, member, general partner or attorney in fact of the Credit Party consummating such Flag Jurisdiction Transfer, certifying that (A) all necessary governmental (domestic and foreign) and third party approvals and/or consents in connection with the Flag Jurisdiction Transfer being consummated on such date and otherwise referred to herein shall have been obtained and remain in effect or that no such approvals and/or consents are required and (B) there exists no judgment, order, injunction or other restraint prohibiting or imposing materially adverse conditions upon such Flag Jurisdiction Transfer or the other transactions contemplated by this Agreement.

(v)    On each Flag Jurisdiction Transfer Date, the Collateral and Guaranty Requirements, as applicable, for the Transferred Collateral Vessel shall have been satisfied.

(vi)    On each Flag Jurisdiction Transfer Date, (a) no Event of Default has occurred and is continuing and (b) all representations and warranties contained herein or in any other Credit Document shall be true and correct in all material respects (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date).

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Exhibit - 4.27

“Flag Jurisdiction Transfer Date” shall mean the date on which a Flag Jurisdiction Transfer occurs.

“Foreign Pension Plan” shall mean any plan, fund (including, without limitation, any superannuation fund) or other similar program established or maintained outside the United States of America by the Borrower or any one or more of its Subsidiaries primarily for the benefit of employees of the Borrower or such Subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, and which plan would be covered by Title IV of ERISA but which is not subject to ERISA by reason of Section 4(b)(4) of ERISA.

“GAAP” shall have the meaning provided in Section 11.07(a).

“Global Assignment Agreement” shall have the meaning provided in the definition of “Collateral and Guaranty Requirements”.

“Governmental Authority” shall mean the government of the United States, any other nation or any political subdivision thereof, whether state, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“Hazardous Materials” shall mean: (a) any petroleum or petroleum products, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, transformers or other equipment that contain dielectric fluid containing levels of polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or substances defined as or included in the definition of “hazardous substances,” “hazardous waste,” “hazardous materials,” “extremely hazardous substances,” “restricted hazardous waste,” “toxic substances,” “toxic pollutants,” “contaminants,” or “pollutants,” or words of similar import, under any applicable Environmental Law; and (c) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any Governmental Authority under Environmental Laws.

“Immaterial Subsidiary” shall mean, at any time, any one or more Subsidiaries of the Borrower that (i) as of the date of the most recent financial statements required to be delivered pursuant to Section 7.01(a) or (b) do not, individually or in the aggregate with all other Immaterial Subsidiaries, have gross assets (excluding goodwill and intra-group items) in excess of 5.0% of consolidated total assets of the Borrower and its Subsidiaries, taken as a whole and (ii) have no obligations which are recourse to the Borrower or any Material Subsidiary of the Borrower.

“Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Credit Document and (b) to the extent not otherwise described in (a), Other Taxes.

“Initial Borrowing Date” shall mean the date occurring after the Closing Date on which the initial Borrowing of Loans hereunder occurs.

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“Interest Coverage Ratio” shall mean, for any period, the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Net Interest Expense for such period.

“Interest Determination Date” shall mean, with respect to any Loan, the second Business Day prior to the commencement of any Interest Period relating to such Loan.

“Interest Period” shall have the meaning provided in Section 2.08.

“Interest Rate Protection Agreement” shall mean any interest rate swap agreement, interest rate cap agreement, interest collar agreement, interest rate hedging agreement, interest rate floor agreement or other similar agreement or arrangement meant to hedge interest rate fluctuations under this Agreement.

“Intra-Group Charter” shall mean (i) any time charter, bareboat charter or other similar contract of employment of a Collateral Vessel made between a Collateral Vessel Owner and a charterer that is either a Credit Party or another Wholly‑Owned Subsidiary of the Borrower and (ii) any time charter of a Collateral Vessel made between a Collateral Vessel Owner and any Affiliate of the Borrower in connection with Permitted Scorpio Pooling Arrangements.

“Investments” shall have the meaning provided in Section 8.05.

“ISM Code” shall mean the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organisation Assembly as Resolutions A.741 (18) and A.788 (19), as the same may be amended or supplemented from time to time.

“ISPS Code” shall mean the International Ship and Port Facility Security Code constituted pursuant to resolution A.924(22) of the International Maritime Organisation (“IMO”) adopted by a Diplomatic conference of the IMO on Maritime Security on 13 December 2002 and now set out in Chapter XI-2 of the Safety of Life at Sea Convention (SOLAS) 1974 (as amended) to take effect on 1 July 2004.

“Lead Arrangers” shall have the meaning provided in the first paragraph of this Agreement.

“Leaseholds” of any Person shall mean all the right, title and interest of such Person as lessee or licensee in, to and under leases or licenses of land, improvements and/or fixtures.

“Legal Requirement” shall mean, as to any Person, any law, treaty, convention, statute, ordinance, decree, award, requirement, order, writ, judgment, injunction, rule, regulation (or official interpretation of any of the foregoing) of, and the terms of any license or permit issued by, any Governmental Authority which is binding on such Person.

“Lender” shall mean each financial institution with a Commitment and/or with outstanding Loans and listed on Schedule I hereto, as well as any Person which becomes a “Lender” hereunder pursuant to Section 11.04(b).

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“Lender Creditors” shall mean the Lenders holding from time to time outstanding Loans and/or Commitments, the Administrative Agent and the Collateral Agent, each in their respective capacities.

“Lender Default” shall mean, as to any Lender, (i) the wrongful refusal (which has not been retracted) of such Lender or the failure of such Lender (which has not been cured) to make available its portion of any Borrowing, (ii) such Lender having been deemed insolvent or having become the subject of a bankruptcy or insolvency proceeding or a takeover by a regulatory authority, or (iii) such Lender having notified the Administrative Agent and/or any Credit Party (x) that it does not intend to comply with its obligations under Sections 2.01(a) or (b), as the case may be, in circumstances where such non-compliance would constitute a breach of such Lender’s obligations under the respective Section or (y) of the events described in preceding clause (ii); provided that, for purposes of (and only for purposes of) Section 2.12, the term “Lender Default” shall also include, as to any Lender, (i) any Affiliate of such Lender that has “control” (within the meaning provided in the definition of “Affiliate”) of such Lender having been deemed insolvent or having become the subject of a bankruptcy or insolvency proceeding or a takeover by a regulatory authority, (ii) any previously cured “Lender Default” of such Lender under this Agreement, unless such Lender Default has ceased to exist for a period of at least 90 consecutive days, (iii) any default by such Lender with respect to its obligations under any other credit facility to which it is a party and which the Administrative Agent believes in good faith has occurred and is continuing, and (iv) the failure of such Lender to make available its portion of any Borrowing within one (1) Business Day of the date (x) the Administrative Agent (in its capacity as a Lender) or (y) Lenders constituting the Required Lenders has or have, as applicable, funded its or their portion thereof.

“Leverage Ratio” shall mean, at any date of determination, the ratio of Net Debt of the Borrower and its Subsidiaries on such date to Consolidated Total Capitalization of the Borrower and its Subsidiaries on such date.

“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, priority or other security interest of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing or similar statement or notice validly filed under the UCC or any other similar recording or notice statute, and any lease having substantially the same effect as any of the foregoing).

“Loan” shall mean each Term Loan and each Revolving Loan.

“Management Agreement” shall mean the deed of master agreement, dated September 27, 2013 entered into by the Borrower and the owner of each Collateral Vessel, the Technical Manager and the Commercial Manager with respect to the management of each Collateral Vessel.

“Margin Stock” shall have the meaning provided in Regulation U.

“Market Disruption Event” shall mean either of the following events:

Americas 9311184 (2K) 21

Exhibit - 4.27

(i)    if, at or about noon on the Interest Determination Date for the relevant Interest Period, the Screen Rate is not available and none or only one of the Reference Banks supplies a rate to the Administrative Agent to determine the Eurodollar Rate for the relevant Interest Period; or

(ii)    before close of business in New York on the Interest Determination Date for the relevant Interest Period, the Administrative Agent receives notice from a Lender or Lenders whose outstanding Loans exceed 50% of the aggregate Loans outstanding at such time that (i) the cost to such Lenders of obtaining matching deposits in the London interbank Eurodollar market for the relevant Interest Period would be in excess of the Eurodollar Rate for such Interest Period or (ii) such Lenders are unable to obtain funding in the London interbank Eurodollar market.

“Material Adverse Effect” shall mean any event, change or condition that, individually or taken as a whole has had, or could reasonably be expected to have, a material adverse effect (v) on the rights or remedies of the Lender Creditors under the Credit Facilities, (w) on the ability of any of the Credit Parties (individually or taken as a whole) to perform its or their obligations to the Lender Creditors under the Credit Facilities, (x) with respect to the Transaction or (y) on the property, assets, operations, liabilities or financial condition of the Borrower or the Subsidiary Guarantors taken as a whole.

“Materiality Amount” shall mean $10,000,000.

“Material Subsidiary” shall mean any Subsidiary of the Borrower which is not an Immaterial Subsidiary.

“Maturity Date” shall mean six-year anniversary of the Closing Date.

“Minimum Borrowing Amount” shall mean (i) for Term Loans, $1,000,000 and (ii) for Revolving Loans, $1,000,000.

“Minimum Liquidity” shall have the meaning provided in Section 8.07(a).

“Moody’s” shall mean Moody’s Investors Service, Inc. and its successors.

“Multiemployer Plan” shall mean an “employee pension benefit plan” (within the meaning of Section 3(2) of ERISA) which is a “multiemployer plan” (within the meaning of Section 4001(a)(3) of ERISA) and which is currently contributed to by (or to which there is a current obligation to contribute of) the Borrower or a Subsidiary of the Borrower or any ERISA Affiliate (other than any Person who is considered an ERISA Affiliate solely pursuant to subsection (m) or (o) of Section 414 of the Code), and any such “multiemployer plan” (within the meaning of Section 4001(a)(3) of ERISA) to which the Borrower or a Subsidiary of the Borrower or any ERISA Affiliate (other than any Person who is considered an ERISA Affiliate solely pursuant to subsection (m) or (o) of Section 414 of the Code) contributed to or had an obligation to contribute to such “multiemployer plan” (within the meaning of Section 4001(a)(3) of ERISA) during the preceding five-year period.

Americas 9311184 (2K) 22

Exhibit - 4.27

“Net Debt” shall mean, at any time of determination, Financial Indebtedness of the Borrower and its Subsidiaries at such time minus cash and Cash Equivalents of the Borrower and its Subsidiaries at such time.

“Net Worth” shall mean, as to any Person, the sum of its capital stock, capital in excess of par or stated value of shares of its capital stock, retained earnings and any other account which, in accordance with GAAP, constitutes stockholders’ equity, but excluding treasury stock and the effect of any impairment of intangible assets on and after the Closing Date.

“Non-Consenting Lender” shall have the meaning provided in Section 11.13(b).

“Non-Defaulting Lender” shall mean and include each Lender other than a Defaulting Lender.

“Nordea” shall have the meaning provided in the first paragraph of this Agreement.

“Note” shall mean each Term Note and each Revolving Note.

“Notice of Borrowing” shall have the meaning provided in Section 2.03.

“Notice Office” shall mean the office of the Administrative Agent located at 437 Madison Avenue, 21^st Floor, New York, NY 10022, or such other office as the Administrative Agent may hereafter designate in writing as such to the other parties hereto.

“Obligations” shall mean all amounts owing to the Administrative Agent, the Collateral Agent or any Lender pursuant to the terms of this Agreement or any other Credit Document. Notwithstanding anything to the contrary contained herein or in any other Credit Document, in no event will the Obligations include any Excluded Swap Obligations.

“OFAC” shall have the meaning provided in Section 6.19(b).

“OPA” shall mean the Oil Pollution Act of 1990, as amended, 33 U.S.C. § 2701 etseq., 46 U.S.C. §3703(a) et seq.

“Organizational Documents” with respect to the Borrower or any Subsidiary Guarantor shall mean the Memorandum of Association or Certificate of Incorporation, as the case may be, Certificate of Formation (including, without limitation, by the filing or modification of any certificate of designation), By-Laws, limited liability company agreement or partnership agreement (or equivalent organizational documents).

“Other Connection Taxes” shall mean, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising solely from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Credit Document, or sold or assigned an interest in any Loan or Credit Document).

Americas 9311184 (2K) 23

Exhibit - 4.27

“Other Creditors” shall mean any Lender or any affiliate thereof and their successors and assigns if any (even if such Lender subsequently ceases to be a Lender under this Agreement for any reason), with which the Borrower enters into any Interest Rate Protection Agreements from time to time.

“Other Obligations” shall mean all obligations, liabilities and indebtedness (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding, but excluding for the avoidance of doubt, any Excluded Swap Obligations) owing by any Credit Party to the Other Creditors under, or with respect to (including, in the case of any Subsidiary Guarantor, all such obligations (other than Excluded Swap Obligations), liabilities and indebtedness under the Subsidiaries Guaranty), any Interest Rate Protection Agreement, whether such Interest Rate Protection Agreement is now in existence or hereafter arising, and the due performance and compliance by such Credit Party with all of the terms, conditions and agreements contained therein.

“Other Taxes” shall have the meaning provided in Section 4.04(b).

“Overhead Expenses” shall mean any and all administrative and overhead expenses, including, without limitation, expenses for payroll and benefits, insurance, real estate, travel, technology, rent, utilities, dues and subscriptions, marketing and communications, service agreements, office equipment and supplies, inspections and appraisals for vessels, business development and taxes.

“Participant Register” shall have the meaning provided in Section 11.04(a).

“PATRIOT Act” shall have the meaning provided in Section 11.21.

“Payment Date” shall mean the last Business Day of each September, December, March and June, commencing with the last Business Day of the first full fiscal quarter following the Initial Borrowing Date.

“Payment Office” shall mean the office of the Administrative Agent located at 437 Madison Avenue, 21^st Floor, New York, NY 10022, or such other office as the Administrative Agent may hereafter designate in writing as such to the other parties hereto.

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto.

“Permitted Liens” shall have the meaning provided in Section 8.01.

“Permitted Scorpio Pooling Arrangements” shall mean any traditional pooling arrangements with an Affiliate of the Borrower in respect of the employment of any Collateral Vessel in a pool of similar types of vessels entered into on an arm’s length basis.

Americas 9311184 (2K) 24

Exhibit - 4.27

“Permitted Third Party Charter” shall mean any charter or other similar contract of employment of a Collateral Vessel made between a Collateral Vessel Owner and a third party charterer that is not a Credit Party or another Wholly‑Owned Subsidiary of the Borrower; provided that (x) the Borrower shall provide prompt notice to the Administrative Agent of any charter or other similar contract of employment made (i) for a period which, as of the execution date, with the exercise of any extension option, has a term of longer than 24 months or (ii) for less than market rate at the time when the charter or other similar contract of employment is fixed, and (y) no such charter or other similar contract of employment shall be a bareboat charter or demise charter.

“Person” shall mean any individual, partnership, joint venture, firm, corporation, association, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof.

“Plan” shall mean any “employee pension benefit plan” as defined in Section 3(2) of ERISA, which is currently maintained or contributed to by (or to which there is a current obligation to contribute of) the Borrower or a Subsidiary of the Borrower or any ERISA Affiliate and which is subject to ERISA.

“Pledge Agreement” shall have the meaning set forth in the definition of “Collateral and Guaranty Requirements”.

“Pledge Agreement Collateral” shall mean all “Collateral” as defined in the Pledge Agreement.

“Pledged Securities” shall mean “Securities” as defined in the Pledge Agreement pledged (or required to be pledged) pursuant thereto.

“Preferred Equity”, as applied to the Equity Interests of any Person, means Equity Interests of such Person (other than common Equity Interests of such Person) of any class or classes (however designed) that ranks prior, as to the payment of dividends or as to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up of such Person, to shares of Equity Interests of any other class of such Person, and shall include any Disqualified Stock.

“Pro Rata Share” shall have the definition provided in Section 4.05.

“Qualified Capital Stock” shall mean any Equity Interest other than Disqualified Stock.

“Recipient” shall mean (a) any Agent and (b) any Lender.

“Real Property” of any Person shall mean all the right, title and interest of such Person in and to land, improvements and fixtures, including Leaseholds.

“Reference Banks” shall mean, at any time, (i) if there are two or fewer Lenders at such time, each Lender and (ii) if there are three or more Lenders at such time, each Lead Arranger and one other Lender as shall be determined by the Administrative Agent.

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Exhibit - 4.27

“Register” shall have the meaning provided in Section 11.17.

“Regulation D” shall mean Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof establishing reserve requirements.

“Regulation T” shall mean Regulation T of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.

“Regulation U” shall mean Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.

“Regulation X” shall mean Regulation X of the Board of Governors of the Federal Reserve Systems as from time to time in effect and any successor to all or a portion thereof.

“Relevant Vessel” shall have the meaning provided in Section 2.01(c).

“Replaced Lender” shall have the meaning provided in Section 2.12.

“Replacement Lender” shall have the meaning provided in Section 2.12.

“Reportable Event” shall mean an event described in Section 4043(c) of ERISA with respect to a Plan (other than any Plan maintained by a Person who is considered an ERISA Affiliate solely pursuant to subsection (m) or (o) of Section 414 of the Code or any Multiemployer Plan) that is subject to Title IV of ERISA other than those events as to which the 30-day notice period referred to in Section 4043 is waived.

“Representative” shall have the definition provided in Section 4.05(d).

“Required Insurance” shall mean insurance as set forth on Schedule IV-A hereto.

“Required Lenders” shall mean, at any time, Non-Defaulting Lenders the sum of whose outstanding Term Loans, Revolving Commitments (or after the termination thereof, Revolving Loans) and Term Loan Commitments at such time represents in excess of 66 2/3% of the sum of all outstanding Term Loans, Revolving Commitments (or after the termination thereof, Revolving Loans) and Term Loan Commitments of Non-Defaulting Lenders.

“Restricted Party” shall mean a person (a) that is listed on any Sanctions List (whether designated by name or by reason of being included in a class of person); (b) that is domiciled, registered as located or having its main place of business in, or is incorporated under the laws of, a country which is subject to Sanctions Laws; (c) that is directly or indirectly owned or controlled by a Person referred to in clauses (a) and/or (b) above; or (d) with which any Lender is prohibited from dealing or otherwise engaging in a transaction with by any Sanctions Laws.

“Restricted Payment” with respect to any Person shall mean any Dividend in respect of the Equity Interests of the Borrower.

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Exhibit - 4.27

“Returns” shall have the meaning provided in Section 6.11(b).

“Revolving Loan” shall have the meaning provided in Section 2.01(b).

“Revolving Loan Commitment” shall mean, for each Lender, the amount set forth opposite such Lender’s name in Schedule I hereto directly below the column entitled “Revolving Loan Commitment”, as same may be (x) terminated pursuant to Sections 3.02, 3.03 and/or 9, as applicable, or (y) adjusted from time to time as a result of assignments to or from such Lender pursuant to Section 2.12 or 11.04(b).

“Revolving Loan Commitment Termination Date” shall mean the date occurring 30 days prior to the Maturity Date.

“Revolving Loan Facility” shall mean the senior secured post-delivery revolving loan facility in the aggregate principal amount of up to $132,865,601 provided under this Agreement.

“Revolving Loan Vessel” shall mean, at any time, each of the Revolving Loan Vessels listed on Schedule VI hereto; provided that prior to the initial Vessel Acquisition Borrowing Date for any Revolving Loan Vessel, upon 10 Business Days’ prior written notice to the Administrative Agent, the Borrower may substitute such Revolving Loan Vessel with a Substitution Vessel, in each case, (x) the acquisition of which is financed by a Revolving Loan pursuant to the terms hereof and (y) which is subject to a first priority perfected Collateral Vessel Mortgage at such time and with respect to which the other Collateral and Guaranty Requirements are satisfied at such time.

“Revolving Loan Vessel Acquisition Period” shall mean the period beginning on the Initial Borrowing Date and ending on the two-year anniversary thereof.

“Revolving Note” shall have the meaning provided in Section 2.05(a).

“S&P” shall mean Standard & Poor’s Rating Services, a division of the McGraw‑Hill Companies, Inc., and its successors.

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

“Sanctions Authority” shall mean the United Nations, the European Union, the member states of the European Union, the United States of America and any authority acting on behalf of any of them in connection with Sanctions Laws.

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

“Scheduled Revolving Commitment Reduction Amount” shall mean for any Payment Date the sum of the Collateral Vessel Amortization Amounts for such Payment Date for each Revolving Loan Vessel then owned by the Borrower or any Subsidiary Guarantor.

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Exhibit - 4.27

“Scheduled Term Amortization Payment Amount” shall mean for any Payment Date the sum of the Collateral Vessel Amortization Amounts for such Payment Date for each Term Loan Vessel then owned by the Borrower or any Subsidiary Guarantor.

“Screen Rate” shall have the meaning provided in the definition of Eurodollar Rate.

“Secured Creditors” shall mean collectively the Other Creditors together with the Lender Creditors.

“Secured Obligations” shall mean (i) the Credit Document Obligations, (ii) the Other Obligations, (iii) any and all sums advanced by the Collateral Agent in order to preserve the Collateral or preserve its security interest in the Collateral, (iv) in the event of any proceeding for the collection or enforcement of any indebtedness, obligations or liabilities of the Credit Parties referred to in clauses (i) and (ii) above, after an Event of Default shall have occurred and be continuing, the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Collateral Agent of its rights hereunder, together with reasonable attorneys’ fees and court costs, and (v) all amounts paid by any Secured Creditor as to which such Secured Creditor has the right to reimbursement under the Security Documents. In no event will the Secured Obligations include any Excluded Swap Obligations.

“Securities Act” shall mean the Securities Act of 1933, as amended.

“Security Documents” shall mean the Pledge Agreement (including all joinders and supplements thereto), the Global Assignment Agreement (including all joinders and supplements thereto), each Collateral Vessel Mortgage, each Account Control Agreement and, after the execution and delivery thereof, each additional security document executed pursuant to Section 7.11.

“Seller’s Bank” shall have the meaning provided in Section 5.02.

“Specified Currency” shall have the meaning provided in Section 11.18.

“Specified Requirements” shall mean the requirements set forth in clauses (i), (v), (vii), (viii)(a), (viii)(b), (viii)(c) and (viii)(f) of the definition of “Collateral and Guaranty Requirements.”

“Subsidiaries Guaranty” shall have the meaning provided in the definition of “Collateral and Guaranty Requirements”.

“Subsidiary” shall mean, as to any Person, (i) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person and/or one or more Subsidiaries of such Person and (ii) any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Subsidiaries of such Person has more than a 50% equity interest at the time.

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Exhibit - 4.27

“Subsidiary Guarantor” shall mean each wholly-owned direct and indirect Subsidiary of the Borrower that owns, directly or indirectly, any Collateral Vessel, on a joint and several basis, each such Subsidiary to be party to the Subsidiaries Guaranty or execute a counterpart thereof after the Closing Date.

“Substitution Vessels” shall mean double-hull dry bulk vessels that are (i) between 52,000 dwt and 210,000 dwt (or as otherwise consented to by all Lenders, such consent not to be unreasonably withheld or delayed), (ii) no greater than 18 months in age on the date it becomes a Collateral Vessel, (iii) classed with an Acceptable Classification Society free of overdue recommendations and conditions affecting class, (iv) registered in an Acceptable Flag Jurisdiction, (v) built at an Acceptable Yard and (vi) or will be owned by a Subsidiary Guarantor.

“Swap Obligation” shall mean, with respect to any Credit Party, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

“Taxes” shall mean all present or future taxes, levies, imposts, duties, fees, assessments, deductions, withholdings or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Technical Manager” shall mean, collectively, one or more technical managers selected by the Borrower and reasonably acceptable to the Required Lenders, including, without limitation Scorpio Ship Management S.A.M.

“Term Loan” shall have the meaning provided in Section 2.01(a).

“Term Loan Commitment” shall mean, the amount set forth opposite such Lender’s name in Schedule I hereto as the same may be (x) terminated pursuant to Sections 3.02, 3.03 and/or 9, as applicable, or (y) adjusted from time to time as a result of assignments to or from such Lender pursuant to Section 2.12 or 11.04(b).

“Term Loan Commitment Termination Date” shall mean the earliest of (i) with respect to a Relevant Vessel, 30 days after the date such Relevant Vessel is delivered to the Collateral Vessel Owner, (ii) with respect to a Relevant Vessel, the latest date for cancellation of the relevant shipbuilding contract for such Relevant Vessel, and (iii) December 31, 2016.

“Term Loan Facility” shall mean the senior secured post-delivery term loan facility in the aggregate principal amount of up to $276,110,846 provided under this Agreement.

“Term Loan Vessel” shall mean, at any time, each of the Term Loan Vessels listed on Schedule VI hereto, in each case, the acquisition of which is financed by a Term Loan pursuant to the terms hereof, in each case which is subject to a first priority perfected Collateral Vessel Mortgage at such time and with respect to which the other Collateral and Guaranty Requirements are satisfied at such time.

“Term Note” shall have the meaning provided in Section 2.05(a).

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Exhibit - 4.27

“Test Period” shall mean each period of four consecutive fiscal quarters, in each case taken as one accounting period.

“Total Commitment” shall mean, at any time, the sum of the Commitments of each of the Lenders at such time.

“Total Revolving Loan Commitment” shall mean, at any time, the sum of the Revolving Loan Commitments of each of the Lenders at such time; provided that, after the Revolving Loan Vessel Acquisition Period, the Total Revolving Loan Commitment shall be equal to the Available Revolving Loan Commitment.

“Total Term Loan Commitment” shall mean, at any time, the sum of the Term Loan Commitments of each of the Lenders at such time.

“Tranche” shall mean the respective facility and commitments utilized in making Loans hereunder, with there being two separate Tranches, i.e., Term Loans and Revolving Loans.

“Transaction” shall mean, collectively, (i) each Collateral Vessel Acquisition, (ii) the entering into of the Credit Documents and the incurrence of Loans hereunder and (iii) the payment of all fees and expenses in connection with the foregoing.

“Transferred Collateral Vessel” shall have the meaning provided in the definition of “Flag Jurisdiction Transfer” in this Section 1.01.

“UCC” shall mean the Uniform Commercial Code as from time to time in effect in the relevant jurisdiction.

“Unfunded Current Liability” of any Plan shall mean the amount, if any, as of the most recent valuation date for the applicable Plan, by which the present value of the Plan’s benefit liabilities determined in accordance with actuarial assumptions at such time consistent with those prescribed by Section 430 of the Code and Section 303 of ERISA, exceeds the fair market value of all plan assets allocable to such liabilities under Title IV of ERISA.

“United States” and “U.S.” shall each mean the United States of America.

“Unutilized Commitment” shall mean any Unutilized Revolving Loan Commitment and any Term Loan Commitment.

“Unutilized Revolving Loan Commitment” shall mean, at any time, the Total Revolving Loan Commitment at such time less the aggregate outstanding principal amount of all Revolving Loans made at such time.

“Vessel Acquisition Borrowing Date” shall mean the incurrence of Loans by the Borrower on the date of the consummation of the delivery of a Collateral Vessel or, if later, the date the Borrower incurs such Loans to reimburse, in part, the construction cost or contract price of such Collateral Vessel, in each case pursuant to Section 2.01(a) and/or (b).

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Exhibit - 4.27

“Vessel Acquisition Documentation” shall mean the documentation entered into by any Credit Party or Subsidiary of any Credit Party in connection with the acquisition of a Collateral Vessel.

“Wholly-Owned Subsidiary” shall mean, as to any Person, (i) any corporation 100% of whose capital stock (other than director’s qualifying shares) is at the time directly or indirectly owned by such Person and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Wholly-Owned Subsidiaries of such Person has directly or indirectly a 100% equity interest at such time.

1.02Other Definitional Provisions. Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Credit Documents or any certificate or other document made or delivered pursuant hereto or thereto.

(a)As used herein and in the other Credit Documents, and any certificate or other document made or delivered pursuant hereto or thereto, (i) accounting terms not defined in Section 1.01 shall have the respective meanings given to them under GAAP, (ii) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (iii) the word “incur” shall be construed to mean incur, create, issue, assume, become liable in respect of or suffer to exist (and the words “incurred” and “incurrence” shall have correlative meanings), (iv) unless the context otherwise requires, the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, Equity Interests, securities, revenues, accounts, leasehold interests and contract rights, (v) the word “will” shall be construed to have the same meaning and effect as the word “shall”, and (vi) unless the context otherwise requires, any reference herein (A) to any Person shall be construed to include such Person’s successors and assigns and (B) to the Borrower or any other Credit Party shall be construed to include the Borrower or such Credit Party as debtor and debtor-in-possession and any receiver or trustee for the Borrower or any other Credit Party, as the case may be, in any insolvency or liquidation proceeding.

(b)The words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.

(c)The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

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Exhibit - 4.27

1.03Rounding. Any financial ratios required to be maintained by the Borrower pursuant to this Agreement (or required to be satisfied in order for a specific action to be permitted under this Agreement) shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding up if there is no nearest number).

SECTION 2.Amount and Terms of Credit Facilities

2.01The Commitments.

(d)Subject to and upon the terms and conditions set forth herein, each Lender with a Term Loan Commitment severally agrees to make a term loan or term loans (each, a “Term Loan” and, collectively, the “Term Loans”) to the Borrower, which Term Loans: (i) may only be incurred pursuant to a single drawing on the Vessel Acquisition Borrowing Date relating to a Term Loan Vessel, which shall occur in each case on or after the Closing Date and prior to the Term Loan Commitment Termination Date for such Term Loan Vessel, (ii) shall be denominated in Dollars and (iii) shall be made by each such Lender in an aggregate principal amount which does not exceed the Term Loan Commitment of such Lender on the relevant Vessel Acquisition Borrowing Date (determined before giving effect on such Vessel Acquisition Borrowing Date to the termination thereof on such date pursuant to Section 3.03). Once repaid, Term Loans incurred hereunder may not be reborrowed.

(e)Subject to and upon the terms and conditions set forth herein, each Lender with a Revolving Loan Commitment severally agrees to make, at any time and from time to time on or after the Closing Date and prior to the Revolving Loan Commitment Termination Date, a revolving loan or revolving loans (each, a “Revolving Loan” and, collectively, the “Revolving Loans”) to the Borrower, which Revolving Loans (i) shall be denominated in Dollars, (ii) may be repaid and reborrowed in accordance with the provisions hereof, (iii) shall not exceed for any such Lender at any time outstanding that aggregate principal amount which equals the Revolving Loan Commitment of such Lender at such time and (iv) shall not exceed in aggregate principal amount at any time outstanding the Available Revolving Loan Commitment at such time; provided that any Revolving Loans incurred during the Revolving Loan Vessel Acquisition Period may be utilized only to acquire Revolving Loan Vessels or Substitution Vessels.

(f)Notwithstanding the foregoing, in no event will the principal amount of the Loans made on the Vessel Acquisition Borrowing Date in respect of a Collateral Vessel exceed the lesser of (A) 55% of the applicable amount set forth opposite the Collateral Vessel with respect to which Loans are made on any Vessel Acquisition Borrowing Date (a “Relevant Vessel”) under the heading “Contract Price” in Schedule VI hereto, (B) the applicable amount set forth opposite the Relevant Vessel under the heading “Maximum Loan Amount” in Schedule VI hereto and (C) in the case of any Vessel Acquisition Borrowing Date occurring on or after January 1, 2016, 60% of the Appraised Value of the Relevant Vessel as determined in accordance with the Appraisals delivered in connection with the Collateral and Guaranty Requirements for such Relevant Vessel; provided that in the case of a Substitution Vessel, the principal amount of the Loan made on the Vessel Acquisition Borrowing Date in respect of such Substitution Vessel shall not exceed the lesser of

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Exhibit - 4.27

(A) 55% of the Appraised Value of such Substitution Vessel as determined in accordance with the Appraisals delivered in connection with the Collateral and Guaranty Requirements for such Collateral Vessel and (B) the applicable amount set forth opposite the Revolving Loan Vessel for which such Substitution Vessel is being substituted under the heading “Maximum Loan Amount” in Schedule VI.

2.02Minimum Amount of Each Borrowing; Limitation on Number of Borrowings. The aggregate principal amount of each Borrowing of Loans under a respective Tranche shall not be less than the Minimum Borrowing Amount applicable to such Tranche. More than one Borrowing may occur on the same date.

2.03Notice of Borrowing. Whenever the Borrower desires to incur Loans hereunder, it shall give the Administrative Agent at the Notice Office at least five Business Days’ prior notice of each Loan to be incurred hereunder, provided that (in each case) any such notice shall be deemed to have been given on a certain day only if given before 12:00 Noon (New York time) on such day. Each such written notice (each, a “Notice of Borrowing”), except as otherwise expressly provided in Section 2.09, shall be irrevocable and shall be given by the Borrower substantially in the form of Exhibit A, appropriately completed to specify and include:

(i)the aggregate principal amount of the Loans to be incurred pursuant to such Borrowing,

(ii)the calculations required to establish whether the Borrower is in compliance with the provisions of Section 2.01(c) for the Relevant Vessel,

(iii)the date of such Borrowing (which shall be a Business Day),

(iv)whether the Loans being incurred pursuant to such Borrowing shall constitute Term Loans or Revolving Loans,

(v)the name of the Relevant Vessel being acquired on such date,

(vi)the initial Interest Period to be applicable thereto in accordance with Section 2.08, and

(vii)in the case of a Borrowing of Revolving Loans after the Revolving Loan Vessel Acquisition Period, the amount of the Available Revolving Loan Commitment after giving effect to such Borrowing.

The Administrative Agent shall promptly (and in no event less than three Business Days prior to the proposed Borrowing Date) give each Lender notice of such proposed Borrowing, of such Lender’s proportionate share thereof and of the other matters required by the immediately preceding sentence to be specified in the Notice of Borrowing.

2.04Disbursement of Funds. Except as otherwise specifically provided in the immediately succeeding sentence, no later than 12:00 Noon (New York time) on the date specified in each Notice of Borrowing, each Lender will make available its prorata portion of each such

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Borrowing requested to be made on such date. All such amounts shall be made available in Dollars and in immediately available funds at the Payment Office of the Administrative Agent and the Administrative Agent will make available to the Borrower (on such day to the extent of funds actually received by the Administrative Agent prior to 12:00 Noon (New York time) on such day) at the Payment Office, in the account specified in the applicable Notice of Borrowing, the aggregate of the amounts so made available by the Lenders. Unless the Administrative Agent shall have been notified by any Lender prior to the date of Borrowing that such Lender does not intend to make available to the Administrative Agent such Lender’s portion of any Borrowing to be made on such date, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on such date of Borrowing and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent by such Lender, the Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender. If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall promptly notify the Borrower and the Borrower shall immediately pay such corresponding amount to the Administrative Agent. The Administrative Agent shall also be entitled to recover on demand from such Lender or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to the Borrower until the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to (i) if recovered from such Lender, the overnight Federal Funds Rate and (ii) if recovered from the Borrower, the rate of interest applicable to the respective Borrowing, as determined pursuant to Section 2.07.

2.05Notes. The Borrower’s obligation to pay the principal of, and interest on, the Loans made by each Lender shall be evidenced in the Register maintained by the Administrative Agent pursuant to Section 11.17 and shall, if requested by such Lender, also be evidenced by in the case of Term Loans, a promissory note duly executed and delivered by the Borrower substantially in the form of Exhibit B-1, with blanks appropriately completed in conformity herewith (each, a “Term Note” and, collectively, the “Term Notes”) and in the case of Revolving Loans, by a promissory note duly executed and delivered by the Borrower substantially in the form of Exhibit B-2, with blanks appropriately completed in conformity herewith (each, a “Revolving Note” and, collectively, the “Revolving Notes”).

(a)Each Lender will note on its internal records the amount of each Loan made by it and each payment in respect thereof and will, prior to any transfer of any of its Notes, endorse on the reverse side thereof the outstanding principal amount of Loans evidenced thereby. Failure to make any such notation or any error in any such notation or endorsement shall not affect the Borrower’s obligations in respect of such Loans.

(b)Notwithstanding anything to the contrary contained above in this Section 2.05 or elsewhere in this Agreement, Notes shall be delivered only to Lenders that at any time specifically request the delivery of such Notes. No failure of any Lender to request or obtain a Note evidencing its Loans to the Borrower shall affect or in any manner impair the obligations of the Borrower to pay the Loans (and all related Obligations) incurred by the Borrower that would

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otherwise be evidenced thereby in accordance with the requirements of this Agreement, and shall not in any way affect the security or guaranties therefor provided pursuant to the Credit Documents. Any Lender that does not have a Note evidencing its outstanding Loans shall in no event be required to make the notations on such Note otherwise described in preceding clause (b). At any time (including, without limitation, to replace any Note that has been destroyed or lost) when any Lender requests the delivery of a Note to evidence any of its Loans, the Borrower shall promptly execute and deliver to such Lender the requested Note in the appropriate amount or amounts to evidence such Loans, provided that, in the case of a substitute or replacement Note, the Borrower shall have received from such requesting Lender (i) an affidavit of loss or destruction and (ii) a customary lost/destroyed Note indemnity, in each case in form and substance reasonably acceptable to the Borrower and such requesting Lender, and duly executed by such requesting Lender.

2.06Pro Rata Borrowings. All Borrowings of Term Loans and Revolving Loans under this Agreement shall be incurred from the Lenders prorata on the basis of their Term Loan Commitments or Revolving Loan Commitments, as the case may be. It is understood that no Lender shall be responsible for any default by any other Lender of its obligation to make Loans hereunder and that each Lender shall be obligated to make the Loans provided to be made by it hereunder, regardless of the failure of any other Lender to make its Loans hereunder.

2.07Interest. The Borrower agrees to pay interest in respect of the unpaid principal amount of each Loan from the date of Borrowing thereof until the maturity thereof (whether by acceleration or otherwise) at a rate per annum which shall be equal to the sum of the Applicable Margin plus the Eurodollar Rate for the relevant Interest Period, each as in effect from time to time.

(a)If the Borrower fails to pay any amount payable by it under a Credit Document on its due date, interest shall accrue on the overdue amount (in the case of overdue interest to the extent permitted by law) from the due date up to the date of actual payment (both before and after judgment) at a rate which is, subject to paragraph (c) below, 2% plus the rate which would have been payable if the overdue amount had, during the period of non‑payment, constituted a Loan for successive Interest Periods, each of a duration selected by the Administrative Agent.  Any interest accruing under this Section 2.07(b) shall be immediately payable by the Borrower on demand by the Administrative Agent.

(b)If any overdue amount consists of all or part of a Loan which became due on a day which was not the last day of an Interest Period relating to such Loan:

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

(ii)the rate of interest applying to the overdue amount during that first Interest Period shall be 2% plus the rate which would have applied if the overdue amount had not become due.

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

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(c)Accrued and unpaid interest shall be payable (i) on the last day of each Interest Period applicable thereto and, in the case of an Interest Period in excess of three months, on each date occurring at three month intervals after the first day of such Interest Period, and (ii) on any repayment or prepayment (on the amount repaid or prepaid), at maturity (whether by acceleration or otherwise) and, after such maturity, on demand.

(d)Upon each Interest Determination Date, the Administrative Agent shall determine the Eurodollar Rate for each Interest Period applicable to the Loans to be made pursuant to the applicable Borrowing and shall promptly notify the Borrower and the respective Lenders thereof. Each such determination shall, absent manifest error, be final and conclusive and binding on all parties hereto.

2.08Interest Periods. At the time the Borrower gives any Notice of Borrowing in respect of the making of any Loan (in the case of the initial Interest Period applicable thereto) or on the third Business Day prior to the expiration of an Interest Period applicable to such Loan (in the case of any subsequent Interest Period) (provided that any such notice shall be deemed to be given on a certain day only if given before 12:00 Noon (New York time)), it shall have the right to elect, by giving the Administrative Agent notice thereof, the interest period (each an “Interest Period”) applicable to such Loan, which Interest Period shall, at the option of the Borrower, be a one ((or, with the consent of the Administrative Agent, less than one) month, provided that such no such consent shall be required for the initial Borrowing in respect of any Collateral Vessel), three or six month period (or such other period as all the Lenders may agree); provided that:

(iii)all Loans comprising a Borrowing shall at all times have the same Interest Period;

(iv)subject to clause (iii) below, each Interest Period for any Loan after the initial Interest Period with respect thereto shall commence on the day on which the immediately preceding Interest Period applicable thereto expires and end on the first Business Day of a calendar month;

(v)if any Interest Period relating to a Loan begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period, such Interest Period shall end on the last Business Day of such calendar month;

(vi)if any Interest Period would otherwise expire on a day which is not a Business Day, such Interest Period shall expire on the first succeeding Business Day; provided, however, that if any Interest Period for a Loan would otherwise expire on a day which is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the immediately preceding Business Day;

(vii)no Interest Period in respect of any Borrowing of Loans shall be selected which extends beyond the Maturity Date;

(viii)any Interest Period commencing less than one month prior to the Maturity Date shall end on the Maturity Date;

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(ix)unless the Required Lenders otherwise agree, no Interest Period longer than three months may be selected at any time when a Default or Event of Default has occurred and is continuing;

(x)if, at any time, the Borrower shall select an Interest Period of less than one month for any Loan, then the Eurodollar Rate applicable to such Loan for such Interest Period shall be based on (x) the Screen Rate at such time, if available, or (y) if the Screen Rate is not then available, the rate supplied by the Reference Banks to the Administrative Agent to determine the Eurodollar Rate for such Interest Period;

(xi)no Interest Period shall be selected which extends beyond any date upon which a scheduled repayment of Loans will be required to be made under Section 4.02(a) or 4.02(b) if the aggregate principal amount of Loans which have Interest Periods which will expire after such date will be in excess of the aggregate principal amount of Loans then outstanding less the aggregate amount of such required repayment on such date; and

(xii)no more than 24 Interest Periods shall be outstanding at any time.

If upon the expiration of any Interest Period applicable to a Borrowing of Loans, the Borrower has failed to elect a new Interest Period to be applicable to such Loans as provided above, the Borrower shall be deemed to have elected a three month Interest Period to be applicable to such Loans effective as of the expiration date of such current Interest Period.

2.09Increased Costs, Illegality, Market Disruption, etc. In the event that any Lender shall have reasonably determined in good faith (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto):

(i)at any time, that such Lender shall incur increased costs or reductions in the amounts received or receivable hereunder with respect to any Loan because of, without duplication, the introduction of or effectiveness of or any Change in Law since the Closing Date in any applicable law or governmental rule, regulation, order, guideline, directive or request (whether or not having the force of law) concerning capital adequacy or otherwise or in the interpretation or administration thereof and including the introduction of any new law or governmental rule, regulation, order, guideline or request, such as, for example, but not limited to: (A) a change in the basis of taxation of payment to any Lender of the principal of or interest on such Loan or any other amounts payable hereunder (except for changes in the rate of tax on, or determined by reference to, the net income or net profits of such Lender pursuant to the laws of the jurisdiction in which such Lender or the entity controlling such Lender is organized or in which the principal office of such Lender or the entity controlling such Lender or such Lender’s applicable lending office is located or any subdivision thereof or therein), but without duplication of any amounts payable in respect of Taxes pursuant to Section 4.04, (B) a change in official reserve requirements but, in all events, excluding reserves required under Regulation D to the extent included in the computation of the Eurodollar Rate, or (C) a change that will have the effect of increasing the amount of capital adequacy required or requested to be maintained by such Lender, or any corporation

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controlling such Lender, based on the existence of such Lender’s Commitments hereunder or its obligations hereunder; or

(ii)at any time, that the making or continuance of any Loan has been made unlawful by any law or governmental rule, regulation or order;

then, and in any such event, such Lender shall promptly give notice (by telephone confirmed in writing) to the Borrower and, in the case of clause (ii) above, to the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each of the Lenders). Thereafter (x) in the case of clause (i) above, the Borrower agrees (to the extent applicable), to pay to such Lender, upon its written demand therefor, such additional amounts as shall be required to compensate such Lender or such other corporation for the increased costs or reductions to such Lender or such other corporation and (y) in the case of clause (ii) above, the Borrower shall take one of the actions specified in Section 2.09(b) as promptly as possible and, in any event, within the time period required by law. In determining such additional amounts, each Lender will act reasonably and in good faith and will use averaging and attribution methods which are reasonable, provided that such Lender’s determination of compensation owing under this Section 2.09(a) shall, absent manifest error, be final and conclusive and binding on all the parties hereto. Each Lender, upon determining that any additional amounts will be payable pursuant to this Section 2.09(a), will give prompt written notice thereof to the Borrower, which notice shall show in reasonable detail the basis for the calculation of such additional amounts; provided that, subject to the provisions of Section 2.11(b), the failure to give such notice shall not relieve the Borrower from its obligations hereunder.

(b)At any time that any Loan is affected by the circumstances described in Section 2.09(a)(i), the Borrower may, and in the case of a Loan affected by the circumstances described in Section 2.09(a)(ii), the Borrower shall, either (x) if the affected Loan is then being made initially, cancel the respective Borrowing by giving the Administrative Agent telephonic notice (confirmed in writing) on the same date or the next Business Day that such Borrower was notified by the affected Lender or the Administrative Agent pursuant to Section 2.09(a)(i) or (ii) or (y) if the affected Loan is then outstanding, upon at least three Business Days’ written notice to the Administrative Agent, in the case of any Loan, repay all outstanding Borrowings (within the time period required by the applicable law or governmental rule, governmental regulation or governmental order) which include such affected Loans in full in accordance with the applicable requirements of Section 4.02; provided that if more than one Lender is affected at any time, then all affected Lenders must be treated the same pursuant to this Section 2.09(b).

(c)If a Market Disruption Event occurs in relation to a Loan for any Interest Period, then the rate of interest on each Lender’s share of such Loan for the relevant Interest Period shall be the rate per annum which is the sum of:

(i)the Applicable Margin; and

(ii)the rate determined by each Lender and notified to the Administrative Agent, which expresses the actual cost to each such Lender of funding its participation in such Loan for a period equivalent to such Interest Period from whatever source it may reasonably select.

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Exhibit - 4.27

(d)If a Market Disruption Event occurs and the Administrative Agent or the Borrower so require, the Administrative Agent and the Borrower shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest. Any alternative basis agreed pursuant to the immediately preceding sentence shall, with the prior consent of all the Lenders and the Borrower, be binding on all parties. If no agreement is reached pursuant to this clause (d), the rate provided for in clause (c) above shall apply for the entire Interest Period.

(e)If any Reference Bank ceases to be a Lender under this Agreement, (x) it shall cease to be a Reference Bank and (y) the Administrative Agent shall, with the approval (which shall not be unreasonably withheld) of the Borrower, nominate as soon as reasonably practicable another Lender to be a Reference Bank in place of such Reference Bank.

2.10Compensation. The Borrower agrees to compensate each Lender, upon its written request (which request shall set forth in reasonable detail the basis for requesting and the calculation of such compensation; provided that no Lender shall be required to disclose any information that would be confidential or price sensitive), for all reasonable and documented losses, expenses and liabilities (including, without limitation, any such loss, expense or liability incurred by reason of the liquidation or reemployment of deposits or other funds required by such Lender to fund its Loans but excluding any loss of anticipated profits) which such Lender may sustain in respect of Loans made to the Borrower: (i) if for any reason (other than a default by such Lender or the Administrative Agent) a Borrowing of Loans does not occur on a date specified therefor in a Notice of Borrowing (whether or not withdrawn by the Borrower or deemed withdrawn pursuant to Section 2.09(a)); (ii) if any prepayment or repayment (including any prepayment or repayment made pursuant to Section 2.09(a), Section 4.01 or Section 4.02 or as a result of an acceleration of the Loans pursuant to Section 9) of any of its Loans, or assignment of its Loans pursuant to Section 2.12, occurs on a date which is not the last day of an Interest Period with respect thereto; (iii) if any prepayment of any of its Loans is not made on any date specified in a notice of prepayment given by the Borrower; or (iv) as a consequence of any other Default or Event of Default arising as a result of the Borrower’s failure to repay Loans or make payment on any Note held by such Lender when required by the terms of this Agreement.

2.11Change of Lending Office; Limitation on Additional Amounts. Each Lender agrees that on the occurrence of any event giving rise to the operation of Section 2.09(a), Section 2.09(b) or Section 4.04 with respect to such Lender, it will, if requested by the Borrower, use reasonable good faith efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans affected by such event, provided that such designation is made on such terms that such Lender and its lending office suffer no economic, legal or regulatory disadvantage (other than any such disadvantage that is immaterial and reimbursed by the Borrower), with the object of avoiding the consequence of the event giving rise to the operation of such Section. Nothing in this Section 2.11 shall affect or postpone any of the obligations of the Borrower or the rights of any Lender provided in Sections 2.09 and 4.04.

(a)Notwithstanding anything to the contrary contained in Sections 2.09, 2.10 or 4.04 of this Agreement, unless a Lender gives notice to the Borrower that it is obligated to pay

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Exhibit - 4.27

an amount under any such Section within 180 days of the later of (x) the date the Lender incurs the respective increased costs, Taxes, loss, expense or liability, reduction in amounts received or receivable or reduction in return on capital or (y) the date such Lender has actual or constructive knowledge of its incurrence of the respective increased costs, Taxes, loss, expense or liability, reductions in amounts received or receivable or reduction in return on capital, then such Lender shall only be entitled to be compensated for such amount by the Borrower pursuant to said Section 2.09, 2.10 or 4.04, as the case may be, to the extent the costs, Taxes, loss, expense or liability, reduction in amounts received or receivable or reduction in return on capital are incurred or suffered on or after the date which occurs 180 days prior to such Lender giving notice to the Borrower that it is obligated to pay the respective amounts pursuant to said Section 2.09, 2.10 or 4.04, as the case may be. This Section 2.11(b) shall have no applicability to any Section of this Agreement other than said Sections 2.09, 2.10 and 4.04.

2.12Replacement of Lenders. (x) If any Lender becomes a Defaulting Lender, (y) upon the occurrence of any event giving rise to the operation of Section 2.09(a), Section 2.09(b) or Section 4.04 with respect to any Lender which results in such Lender charging to the Borrower increased costs in excess of those being generally charged by the other Lenders, or (z) as provided in Section 11.13(b) in the case of certain refusals by a Lender to consent to certain proposed changes, waivers, discharges or terminations with respect to this Agreement which have been approved by the Required Lenders, the Borrower shall have the right, if no Event of Default will exist immediately after giving effect to the respective replacement, to either replace such Lender (the “Replaced Lender”) with one or more other Eligible Transferee or Eligible Transferees, none of whom shall constitute a Defaulting Lender at the time of such replacement (collectively, the “Replacement Lender”) reasonably acceptable to the Administrative Agent, provided that:

(i)at the time of any replacement pursuant to this Section 2.12, the Replacement Lender shall enter into one or more Assignment and Assumption Agreements pursuant to Section 11.04(b) (and with all fees payable pursuant to said Section 11.04(b) to be paid by the Replacement Lender) pursuant to which the Replacement Lender shall acquire all of the Commitments and outstanding Loans of the Replaced Lender and, in connection therewith, shall pay to the Replaced Lender in respect thereof an amount equal to the sum (without duplication) of (x) an amount equal to the principal of, and all accrued interest on, all outstanding Loans of the Replaced Lender, and (y) an amount equal to all accrued, but unpaid, Commitment Commission owing to the Replaced Lender pursuant to Section 3.01; and

(ii)all obligations of the Borrower due and owing to the Replaced Lender at such time (other than those specifically described in clause (i) above in respect of which the assignment purchase price has been, or is concurrently being, paid) shall be paid in full to such Replaced Lender concurrently with such replacement.

Upon receipt by the Replaced Lender of all amounts required to be paid to it pursuant to this Section 2.12, the Administrative Agent shall be entitled (but not obligated) and is authorized (which authorization is coupled with an interest) to execute an Assignment and Assumption Agreement on behalf of such Replaced Lender, and any such Assignment and Assumption Agreement so executed

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by the Administrative Agent and the Replacement Lender shall be effective for purposes of this Section 2.12 and Section 11.04. Upon the execution of the respective Assignment and Assumption Agreement, the payment of amounts referred to in clauses (i) and (ii) above and, if so requested by the Replacement Lender, delivery to (i) the Replacement Lender of the appropriate Note or Notes executed by the Borrower, the Replacement Lender shall become a Lender hereunder and the Replaced Lender shall cease to constitute a Lender hereunder, except with respect to indemnification provisions under this Agreement (including, without limitation, Sections 2.09, 2.10, 4.04, 11.01, 11.17 and 11.18), which shall survive as to such Replaced Lender.

SECTION 3.Commitment Commission; Reductions of Commitment.

3.01Commitment Commission; Fees. The Borrower agrees to pay the Administrative Agent for distribution to each Non-Defaulting Lender a commitment commission (the “Commitment Commission”) for the period from the Closing Date to and including the Commitment Termination Date computed at a perannum rate equal to 40% of the Applicable Margin of the daily Unutilized Commitment, in each case, of such Non-Defaulting Lender. Accrued Commitment Commission shall be due and payable in arrears on each Payment Date and on the Maturity Date (or, if earlier, the date upon which the Total Commitments are terminated).

(a)The Borrower shall pay (i) to the Lead Arrangers, the fees set forth in the Fee Letter and (ii) to the Administrative Agent, for the Administrative Agent’s own account, such other fees as have been agreed to in writing by the Borrower and the Administrative Agent.

3.02Voluntary Termination of Unutilized Commitments. Upon at least three Business Days’ prior notice to the Administrative Agent at its Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders), the Borrower shall have the right, at any time or from time to time, without premium or penalty, to terminate or reduce the Term Loan Commitments, in whole or in part prior to the Term Loan Commitment Termination Date, in integral multiples of $1,000,000 in the case of partial reductions to the Term Loan Commitments and/or the Available Revolving Loan Commitments, in whole or in part prior to the Maturity Date, in integral multiples of $1,000,000 in the case of partial reductions to the Revolving Loan Commitments, provided that, in each case, such reduction shall apply proportionately to permanently reduce the Commitment, as applicable, of each Lender.

(b)In the event of certain refusals by a Lender as provided in Section 11.13(b) to consent to certain proposed changes, waivers, discharges or terminations with respect to this Agreement which have been approved by the Required Lenders, the Borrower may, subject to the requirements of said Section 11.13(b) and upon five Business Days’ written notice to the Administrative Agent at its Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders), terminate all of the Commitment (if any) of such Lender so long as all Loans, together with accrued and unpaid interest, Commitment Commission and all other amounts, owing to such Lender are repaid concurrently with the effectiveness of such termination (at which time Schedule I hereto shall be deemed modified to reflect such changed amounts), and at such time such Lender shall no longer constitute a “Lender” for purposes of this Agreement, except with respect to indemnification provisions under this Agreement (including, without

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limitation, Sections 2.09, 2.10, 4.04, 11.01, 11.17 and 11.18), which shall survive as to such repaid Lender.

3.03Mandatory Reduction of Commitments. The Total Commitments (and the Commitments of each Lender) shall terminate in their entirety on December 31, 2014, unless the Closing Date has occurred prior to such date.

(a)In addition to any other mandatory commitment reductions pursuant to this Section 3.03, the Total Term Loan Commitment (and the Term Loan Commitment of each Lender) shall terminate in its entirety on the Term Loan Commitment Termination Date.

(b)In addition to any other mandatory commitment reductions pursuant to this Section 3.03, the Total Revolving Loan Commitment (and the Revolving Loan Commitment of each Lender) provided under Section 2.01(b) shall terminate in its entirety on the Revolving Loan Commitment Termination Date.

(c)In addition to any other mandatory commitment reductions pursuant to this Section 3.03, on each Borrowing Date on which Term Loans are incurred, the Total Term Loan Commitment shall be permanently reduced by the aggregate principal amount of the Term Loans made on such Borrowing Date.

(d)Each reduction to, or termination of, the Total Term Loan Commitment or the Total Revolving Loan Commitment, as applicable, pursuant to this Section 3.03 shall be applied to proportionately reduce or terminate, as the case may be, the Term Loan Commitment or Revolving Loan Commitment, as applicable, of each Lender with such a Commitment.

SECTION 4.Prepayments; Payments; Taxes.

4.01Voluntary Prepayments. The Borrower shall have the right to prepay the Loans, without premium or penalty except as provided by law, in whole or in part at any time and from time to time on the following terms and conditions:

(i)the Borrower shall give the Administrative Agent, prior to 12:00 Noon (New York time) at its Notice Office, at least three Business Days’ prior written notice (or telephonic notice promptly confirmed in writing) of its intent to prepay such Loans, which notice shall specify whether Term Loans or Revolving Loans shall be prepaid, the amount of such prepayment and the specific Borrowing or Borrowings pursuant to which such Loans were made, which notice the Administrative Agent shall promptly transmit to each of the Lenders;

(ii)each partial prepayment of Term Loans pursuant to this Section 4.01 shall be in an aggregate principal amount of at least $5,000,000 (or such lesser amount as is acceptable to the Administrative Agent in any given case) and each partial prepayment of Revolving Loans pursuant to this Section 4.01 shall be in an aggregate principal amount of at least $5,000,000 (or such lesser amount as is acceptable to the Administrative Agent);

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(iii)at the time of any prepayment of Loans pursuant to this Section 4.01 which occurs on any date other than the last day of the Interest Period applicable thereto, the Borrower shall pay the amounts required pursuant to Section 2.10;

(iv)except as expressly provided in clause (v) below, each prepayment pursuant to this Section 4.01 in respect of any Loans made pursuant to a Borrowing shall be applied prorata among the Loans comprising such Borrowing, provided that at the Borrower’s election in connection with any prepayment of Loans pursuant to this Section 4.01, such prepayment shall not, so long as no Event of Default then exists, be applied to any Loan of a Defaulting Lender until all other Loans of Non-Defaulting Lenders have been repaid in full; and

(v)In the event of a refusal by a Lender to consent to certain proposed changes, waivers, discharges or terminations with respect to this Agreement which have been approved by the Required Lenders as (and to the extent) provided in Section 11.13(b), the Borrower may, upon five Business Days’ prior written notice to the Administrative Agent at the Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders) repay all Loans, together with accrued and unpaid interest, Fees, and other amounts owing to such Lender in accordance with, and subject to the requirements of, said Section 11.13(b) so long as (I) all Commitments of such Lender are terminated concurrently with such repayment pursuant to Section 4.02(f) (at which time Schedule I hereto shall be deemed modified to reflect the changed Commitments) and (II) the consents, if any, required under Section 11.13(b) in connection with the repayment pursuant to this clause (b) have been obtained.

(c)Term Loans prepaid pursuant to this Section 4.01 may not be reborrowed. Revolving Loans prepaid pursuant to Section 4.01(a) may be reborrowed until the Revolving Loan Commitment Termination Date subject to compliance with the terms and conditions of this Agreement.

4.02Mandatory Repayments and Commitment Reductions.

(e)(i) On any day on which the sum of the aggregate outstanding principal amount of all Revolving Loans (after giving effect to all other repayments thereof on such date) exceeds the Available Revolving Loan Commitment at such time, the Borrower shall prepay Revolving Loans on such day in an amount equal to such excess and (ii) on each Payment Date, the Total Revolving Loan Commitment and Available Revolving Loan Commitment shall be permanently reduced by an amount equal to the Scheduled Revolving Commitment Reduction Amount for such Payment Date.

(f)In addition to any other mandatory repayments or commitment reductions pursuant to this Section 4.02, the Borrower shall be required to repay Term Loans on each Payment Date in an amount equal to the Scheduled Term Amortization Payment Amount for such Payment Date.

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(g)In addition to any other mandatory repayments or commitment reductions required pursuant to this Section 4.02, but without duplication, on (i) the Business Day following the date of any Collateral Disposition involving a Collateral Vessel (other than a Collateral Disposition constituting an Event of Loss) and (ii) the earlier of (A) the date which is 180 days following any Collateral Disposition constituting an Event of Loss involving a Collateral Vessel and (B) the date of receipt by the Borrower, any Subsidiary Guarantor or the Administrative Agent of the insurance proceeds relating to such Event of Loss, the Borrower shall repay an aggregate principal amount of outstanding Loans of the Tranche of the affected Collateral Vessel (and in the case of any Collateral Disposition affecting a Revolving Loan Vessel, reduce Revolving Loan Commitments) in accordance with the requirements of Section 4.02(f) in an amount equal to the Attributable Loan Amount of the affected Collateral Vessel.

(h)Upon the occurrence of an Event of Default resulting from a breach of Section 8.07(e), the Borrower shall be required to immediately repay Loans in accordance with the requirements of Section 4.02(f) in an amount required to cure such Event of Default, provided that it is understood and agreed that the requirement to repay Loans under this Section 4.02(d) shall not be deemed to be a waiver of any other right or remedy that any Lender may have as a result of an Event of Default resulting from a breach of Section 8.07(e).

(i)In addition to any other mandatory repayments or commitment reductions required pursuant to this Section 4.02, upon a Change of Control, the Borrower shall be required to repay the outstanding principal amount of Loans in its entirety within 60 days after the date of such Change of Control.

(j)All prepayments of the Loans pursuant to Sections 4.01(a), 4.02(a), 4.02(b) and 4.02(d) shall be applied pro rata to the outstanding Loans under the applicable Tranche.

(k)The Attributable Loan Amount of the Collateral Vessels shall be reduced as follows:

(i)each (x) voluntary prepayment of Revolving Loans pursuant to Section 4.01(a) made during the Revolving Loan Vessel Acquisition Period and (y) voluntary reduction to the Total Revolving Loan Commitment made pursuant to Section 3.02 after the Revolving Loan Vessel Acquisition Period shall permanently reduce the Attributable Loan Amount of the Revolving Loan Vessels on a dollar for dollar basis as directed by the Borrower;

(ii)each voluntary prepayment of Term Loans pursuant to Section 4.01(a), and each prepayment of Term Loans pursuant to Section 4.02(d) shall permanently reduce the Attributable Loan Amount of the Term Loan Vessels on a dollar for dollar basis as directed by the Borrower; and

(iii)each prepayment of the Term Loans and reduction of the Revolving Loan Commitments pursuant to Section 4.02(c) shall reduce the Attributable Loan Amount of the affected Collateral Vessel to zero.

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Exhibit - 4.27

(l)With respect to each repayment of Loans required by this Section 4.02, the Borrower may designate the specific Borrowing or Borrowings pursuant to which such Loans were made, provided that (i) repayments of Loans pursuant to this Section 4.02 may only be made on the last day of an Interest Period applicable thereto unless all Loans of the relevant Tranche with Interest Periods ending on such date of required repayment have been paid in full and (ii) each repayment of any Loans comprising a Borrowing shall be applied pro rata among such Loans. In the absence of a designation by the Borrower as described in the preceding sentence, the Administrative Agent shall, subject to the preceding provisions of this clause (h), make such designation in its sole reasonable discretion with a view, but no obligation, to minimize breakage costs owing pursuant to Section 2.10.

4.03Method and Place of Payment. Except as otherwise specifically provided herein, all payments under this Agreement or any Note shall be made to the Administrative Agent for the account of the Lender or Lenders entitled thereto not later than 12:00 Noon (New York time) on the date when due and shall be made in Dollars in immediately available funds at the Payment Office of the Administrative Agent or such other office in the State of New York as the Administrative Agent may hereafter designate in writing. Whenever any payment to be made hereunder or under any Note shall be stated to be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest shall be payable at the applicable rate during such extension.

4.04Net Payments; Taxes.

(a)All payments made by any Credit Party hereunder or under any Note will be made without setoff, counterclaim or other defense. All such payments will be made free and clear of, and without deduction or withholding for any Taxes imposed with respect to such payments unless required by applicable law. If applicable law requires the deduction or withholding of any Taxes from or in respect of any sum payable under any Note, then:

(i)the Borrower shall be entitled to make such deduction or withholding,

(ii)the Borrower shall pay the full amount deducted or withheld to the relevant taxing authority and

(iii)in the case of any Indemnified Taxes or Other Taxes, the Borrower agrees to pay the full amount of such Indemnified Taxes and Other Taxes, and such additional amounts as may be necessary so that every payment of all amounts due under this Agreement or under any Note, after withholding or deduction for or on account of any Indemnified Taxes and Other Taxes, will not be less than the amount provided for herein or in such Note.

If any amounts are payable in respect of Indemnified Taxes or Other Taxes pursuant to the preceding sentence, the Borrower agrees to reimburse each Lender, upon the written request of such Lender, for Taxes imposed on or measured by the net income of such Lender pursuant to the laws of the jurisdiction in which such Lender is organized or in which the principal office or applicable lending office of such Lender is located or under the laws of any political subdivision or taxing authority of any such jurisdiction in which such Lender is organized or in which the principal office

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Exhibit - 4.27

or applicable lending office of such Lender is located and for any withholding of Taxes as such Lender shall determine are payable by, or withheld from, such Lender, in respect of such amounts so paid to or on behalf of such Lender pursuant to the preceding sentence and in respect of any amounts paid to or on behalf of such Lender pursuant to this sentence. The Borrower shall indemnify each Recipient, within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error. The Borrower will furnish to the Administrative Agent within 45 days after the date of payment of any Indemnified Taxes or Other Taxes is due pursuant to applicable law certified copies of Tax receipts evidencing such payment by the Borrower. The Borrower agrees to indemnify and hold harmless each Lender, and reimburse such Lender upon its written request, for the amount of any Indemnified Taxes or Other Taxes so levied or imposed and paid by such Lender.

(b)Without duplicating the payments under subsection (a) above, the Borrower agrees to pay any and all present or future stamp, court or documentary Taxes and any other excise (in the nature of a documentary or similar Tax), property, intangible, filing or mortgage recording Taxes or charges or similar levies imposed by any Governmental Authority which arise from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Note excluding such amounts imposed in connection with an Assignment and Assumption Agreement, grant of a participation, transfer or assignment to or designation of a new applicable lending office or other office for receiving payments under any Note, except to the extent that any such change is requested in writing by a Borrower and the registration or presentation of a Note is mandatorily required by law (all such non-excluded Taxes described in this Section 4.04(b) being referred to as “Other Taxes”).

(c)Any Recipient that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Credit Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Recipient, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Recipient is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation shall not be required if in the Recipient’s reasonable judgment such completion, execution or submission would subject such Recipient to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Recipient.

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Exhibit - 4.27

(d)If the Administrative Agent or a Lender determines in its sole discretion that it has actually received or realized a refund of any Indemnified Taxes or Other Taxes as to which it has been indemnified by a Credit Party or with respect to which such Credit Party has paid additional amounts pursuant to Section 4.04(a), it shall pay over such refund to such Credit Party (but only to the extent of indemnity payments made, or additional amounts paid, by such Credit Party under Section 4.04(a) with respect to the Indemnified Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender (including any Taxes imposed with respect to such refund) as is determined in the sole discretion of the Administrative Agent or Lender in good faith, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). In the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority, then such Credit Party, upon the written request of the Administrative Agent or such Lender, agrees to promptly repay the amount paid over to such Credit Party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority, but without any other interest, penalties or charges) to the Administrative Agent or such Lender. Nothing in this Section 4.04(d) shall require a Lender to disclose any confidential information (including, without limitation, its Tax returns or its calculations).

(e)If a payment made to a Lender under any Note would be subject to withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code or an intergovernmental agreement) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this paragraph (e), if any applicable law requires the deduction or withholding of any Taxes from or in respect of any sum payable upon the Note, including any Taxes imposed under FATCA, the Administrative Agent shall be entitled to make deductions or withholding. “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(f)Each Lender shall severally indemnify the Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes or Other Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes or Other Taxes and without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 11.04(a) relating to the maintenance of a Participant Register and (iii) any Taxes excluded in Section 4.04(a) attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Note, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender

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Exhibit - 4.27

hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Note or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this paragraph (f).

4.05Application of Proceeds. All monies collected by the Collateral Agent upon any sale or other disposition of the Collateral of each Credit Party, together with all other monies received by the Administrative Agent or Collateral Agent under and in accordance with this Agreement and the other Credit Documents (except to the extent such monies are for the account of the Administrative Agent or Collateral Agent only or released in accordance with the applicable provisions of this Agreement or any other Credit Document), shall be applied to the payment of the Secured Obligations in accordance as follows:

(i)first, to the payment of all amounts owing the Collateral Agent of the type described in clauses (iii) and (iv) of the definition of “Secured Obligations”;

(ii)second, to the extent proceeds remain after the application pursuant to the preceding clause (i), an amount equal to the outstanding Credit Document Obligations shall be paid to the Lenders as provided in Section 4.05(d) hereof, with each Lender receiving an amount equal to such outstanding Credit Document Obligations or, if the proceeds are insufficient to pay in full all such Credit Document Obligations, its Pro Rata Share of the amount remaining to be distributed;

(iii)third, to the extent proceeds remain after the application pursuant to the preceding clauses (i) and (ii), an amount equal to the outstanding Other Obligations shall be paid to the Other Creditors as provided in Section 4.05(d) hereof, with each Other Creditor receiving an amount equal to such outstanding Other Obligations or, if the proceeds are insufficient to pay in full all such Other Obligations, its Pro Rata Share of the amount remaining to be distributed; and

(iv)fourth, to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (iii), inclusive, and following the termination of this Agreement and the Credit Documents in accordance with their terms, to the relevant Credit Party or to whomever may be lawfully entitled to receive such surplus.

(e)For purposes of this Agreement, “Pro Rata Share” shall mean, when calculating a Secured Creditor's portion of any distribution or amount, that amount (expressed as a percentage) equal to a fraction the numerator of which is the then unpaid amount of such Secured Creditor's Credit Document Obligations or Other Obligations, as the case may be, and the denominator of which is the then outstanding amount of all Credit Document Obligations or Other Obligations, as the case may be.

(f)When payments to Secured Creditors are based upon their respective Pro Rata Shares, the amounts received by such Secured Creditors hereunder shall be applied (for purposes of making determinations under this Section 4.05 only) (i) first, to their Credit Document Obligations and (ii) second, to their Other Obligations. If any payment to any Secured Creditor of

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its Pro Rata Share of any distribution would result in overpayment to such Secured Creditor, such excess amount shall instead be distributed in respect of the unpaid Credit Document Obligations or Other Obligations, as the case may be, of the other Secured Creditors, with each Secured Creditor whose Credit Document Obligations or Other Obligations, as the case may be, have not been paid in full to receive an amount equal to such excess amount multiplied by a fraction the numerator of which is the unpaid Credit Document Obligations or Other Obligations, as the case may be, of such Secured Creditor and the denominator of which is the unpaid Credit Document Obligations or Other Obligations, as the case may be, of all Secured Creditors entitled to such distribution.

(g)All payments required to be made hereunder shall be made (x) if to the Lender Creditors, to the Administrative Agent under this Agreement for the account of the Lender Creditors, and (y) if to the Other Creditors, to the trustee, paying agent or other similar representative (each a “Representative”) for the Other Creditors or, in the absence of such a Representative, directly to the Other Creditors.

(h)For purposes of applying payments received in accordance with this Section 4.05, the Collateral Agent shall be entitled to rely upon (i) the Administrative Agent under this Agreement and (ii) the Representative for the Other Creditors or, in the absence of such a Representative, upon the Other Creditors for a determination (which the Administrative Agent, each Representative for any Other Creditors and the Secured Creditors agree (or shall agree) to provide upon request of the Collateral Agent) of the outstanding Credit Document Obligations and Other Obligations owed to the Lender Creditors or the Other Creditors, as the case may be. Unless it has actual knowledge (including by way of written notice from an Other Creditor) to the contrary, the Collateral Agent, shall be entitled to assume that no Interest Rate Protection Agreements are in existence.

(i)It is understood and agreed that each Credit Party shall remain jointly and severally liable to the extent of any deficiency between the amount of the proceeds of the Collateral pledged and Liens granted by it under and pursuant to the Security Documents and the aggregate amount of the Secured Obligations of such Credit Party.

SECTION 5.Conditions Precedent.

5.01Closing Date. This Agreement shall become effective on the date on which each of the following conditions is satisfied:

(m)Credit Agreement; Fee Letter. The Borrower, the Administrative Agent and each of the Lenders who are initially parties hereto shall have signed a counterpart of (i) this Agreement and (ii) the Fee Letter (in each case, whether the same or different counterparts) and shall have delivered the same to the Administrative Agent.

(n)Officer’s Certificates. The Administrative Agent shall have received a certificate in form and substance reasonably acceptable to the Administrative Agent signed by an Authorized Officer of the Borrower, with appropriate insertions, together with copies of the Organizational Documents of the Borrower and the resolutions of the Borrower referred to in such certificate authorizing the consummation of the Transaction and certifying that the conditions set

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forth in Sections 5.01(d), (e), (h) and (i) are satisfied (to the extent that, in each case, such conditions are not required to be acceptable (reasonably or otherwise) to the Administrative Agent).

(o)PATRIOT Act. The Credit Parties shall have provided, or procured the supply of, the “know your customer” information required pursuant to the PATRIOT Act, to each of the Lenders and the Administrative Agent in connection with their respective internal compliance regulations thereunder or other information requested by any Lender or the Administrative Agent to satisfy related checks under all applicable laws and regulations pursuant to the transactions contemplated hereby, in each case to the extent requested by any Lender or the Administrative Agent not later than five days prior to the Closing Date.

(p)Material Adverse Effect. On and as of the Closing Date, nothing shall have occurred since December 31, 2013 (and neither the Administrative Agent nor any of the Required Lenders shall have become aware of any condition or circumstance not previously known to them), which the Lenders determine has had or could reasonably be expected to have a Material Adverse Effect.

(q)Litigation. On and as of the Closing Date, no litigation with respect to any Credit Party shall be pending or, to the knowledge of any Credit Party, threatened with respect to this Agreement or any other Credit Document or with respect to the Transaction or which the Administrative Agent or the Required Lenders shall determine has had, or could reasonably be expected to have, a Material Adverse Effect.

(r)Fees. On the Closing Date, the Borrower shall have paid to the Administrative Agent, the Collateral Agent, the Lead Arrangers and the Lenders all Fees and all other reasonable fees and documented out-of-pocket costs and expenses (including, without limitation, the reasonable legal fees and expenses of White & Case LLP and other local counsel to the Administrative Agent) and other compensation due and payable on or prior to the Closing Date, in each case, payable to the Administrative Agent, the Collateral Agent, the Lead Arrangers and the Lenders in respect of the transactions contemplated by this Agreement to the extent reasonably invoiced at least two Business Days prior to the Closing Date.

(s)Solvency Certificate. On the Closing Date, the Borrower shall cause to be delivered to the Administrative Agent a solvency certificate from an Authorized Officer of the Borrower, substantially in the form of Exhibit C, which shall be addressed to the Administrative Agent and dated as of the Closing Date, setting forth the conclusion that, after giving effect to the Transaction and the incurrence of all the financings contemplated hereby, each Credit Party individually (after giving effect to rights of contribution and subrogation) and the Borrower and its Subsidiaries taken as a whole, are not insolvent and will not be rendered insolvent by the incurrence of such indebtedness, and will not be left with unreasonably small capital with which to engage in its business and will not have incurred debts beyond its ability to pay such debts as they mature.

(t)Approvals. On and as of the Closing Date, all necessary governmental (domestic and foreign) and third party approvals and/or consents in connection with the Transaction, the Loans, and the granting of Liens under the Credit Documents shall have been obtained and remain in effect, and all applicable waiting periods with respect thereto shall have expired without

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any action being taken by any competent authority which, in the reasonable judgment of the Administrative Agent, restrains, prevents or imposes materially adverse conditions upon the consummation of the Transaction, the making of the Loans and the performance by the Credit Parties of the Credit Documents. In addition, there shall not exist any judgment, order, injunction or other restraint issued or filed or a hearing seeking injunctive relief or other restraint pending or notified prohibiting or imposing materially adverse conditions upon the consummation of the Transaction, the making of the Loans or the performance by the Credit Parties of the Credit Documents.

(u)No Event of Default; Representations and Warranties. On and as of the Closing Date (i) there shall exist no Event of Default and (ii) all representations and warranties contained herein or in any other Credit Document shall be true and correct in all material respects (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date).

(v)Legal Opinion. The Administrative Agent shall have received, on behalf of itself and the Lenders, a legal opinion from Seward & Kissel LLP, in its capacity as counsel to the Borrower, in form and substance reasonably acceptable to the Administrative Agent, dated as of the Closing Date and addressed to the Administrative Agent and the Lenders.

(w)Process Agent. On and prior to the Closing Date, the Credit Parties have appointed a process agent in the State of New York and the Credit Parties shall have received evidence of the acceptance of such appointment from such process agent.

5.02Conditions to each Vessel Acquisition Borrowing Date. The obligation of each Lender to make the Loans on any Vessel Acquisition Borrowing Date is subject to the satisfaction of each of the following conditions:

(c)Closing Date. On or prior to each Vessel Acquisition Borrowing Date, (i) the Closing Date shall have occurred and (ii) there shall have been delivered to the Administrative Agent for the account of each of the Lenders that has requested same the appropriate Term Note and/or Revolving Note executed by the Borrower, in each case in accordance with Section 2.05.

(d)Delivery of Collateral Vessel. Each Collateral Vessel Owner shall have received or shall receive substantially simultaneously with funding of the Loans with respect to the relevant Collateral Vessel, title to the relevant Collateral Vessel, and such Collateral Vessel Owner shall at such time be the record and beneficial owner of such Collateral Vessel free and clear of all liens other than the Permitted Liens.

(e)Officer’s Certificate. The Administrative Agent shall have received a certificate from an Authorized Officer of the Borrower certifying that the conditions set forth in Sections 5.02(e) and (f) and Sections 5.03(b), (c) and (d) are satisfied (to the extent that, in each case, such conditions are not required to be acceptable (reasonably or otherwise) to the Administrative Agent).

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(f)Collateral and Guaranty Requirements. On or prior to each Vessel Acquisition Borrowing Date, the Collateral and Guaranty Requirements with respect to each Collateral Vessel being financed on such Vessel Acquisition Borrowing Date shall be satisfied or the Administrative Agent shall have waived such requirements (other than the Specified Requirements) and/or conditioned such waiver on the satisfaction of such requirements within a specified period of time.

(g)No Conflicts. On each Vessel Acquisition Borrowing Date, after giving effect to the consummation of the Transaction, the making of the Loans and the performance by the Credit Parties of the Credit Documents, the financings incurred in connection therewith and the other transactions contemplated hereby, there shall be no conflict with, or default under any material agreement to which the Borrower or any of its Subsidiaries is a party.

(h)Approvals. On each Vessel Acquisition Borrowing Date, there shall not exist any judgment, order, injunction or other restraint issued or filed or a hearing seeking injunctive relief or other restraint pending or notified prohibiting or imposing materially adverse conditions upon the making of the Loan or the performance by the Credit Parties of the Credit Documents.

Notwithstanding anything to the contrary in this Section 5.02, Loans on any Vessel Acquisition Borrowing Date may be borrowed before the applicable conditions set forth above in Section 5.02 are met, provided that:

(i)the Vessel Acquisition Borrowing Date may not be more than five Business Days prior to the scheduled delivery date of the relevant Collateral Vessel; and

(ii)on the Vessel Acquisition Borrowing Date, the Administrative Agent shall (A) preposition the Loans with respect to such Vessel Acquisition Borrowing Date at a bank or other financial institution (the “Seller’s Bank”) satisfactory to the Administrative Agent, which funds shall be held at the Seller’s Bank in the name and under the sole control of the Administrative Agent or an Affiliate thereof and (B) issue a SWIFT MT 199 or similar communication (each, a “Disbursement Authorization”) authorizing the release of such funds by the Seller’s Bank on the relevant delivery date upon receipt of a Protocol of Delivery and Acceptance in respect of the relevant Collateral Vessel, duly executed by the seller of the relevant Collateral Vessel and the relevant Subsidiary Guarantor and countersigned by a representative of the Administrative Agent;

provided that if the delivery of the relevant Collateral Vessel does not occur within five Business Days after the scheduled delivery date, the funds held at the Seller’s Bank shall be returned to the Administrative Agent for further distribution to the Lenders.

For the avoidance of doubt:

1.all interest and fees on the Loans shall accrue from the date the Loan is prepositioned at the Seller’s Bank;

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Exhibit - 4.27

2.the Administrative Agent and the Lenders suspend satisfaction of the conditions precedent set forth in clauses (viii)(a), (b), (c) and (e) of the definition of “Collateral and Guarantee Requirements” solely for the time period on and between the relevant Vessel Acquisition Borrowing Date and (I) the relevant delivery date with respect to clauses (viii)(a), (b) and (c) and (II) within 5 days of the relevant delivery date with respect to clause (viii)(e);

3.if the Collateral Vessel is not delivered within the time prescribed and the proceeds of the Loans are returned to the Administrative Agent for distribution to the Lenders, (i) the Borrower shall pay all accrued interest and fees in respect of such returned proceeds on the date such proceeds are returned to the Administrative Agent and (ii) the relevant available Commitment will be increased by an amount equal to the aggregate principal amount of the Loan proceeds so returned; and

4.if the Loans are converted into a currency other than Dollars for deposit with the Seller’s Bank and the relevant Collateral Vessel is not delivered within the time prescribed and the proceeds of the Loans are returned to the Administrative Agent for further distribution to the Lenders, the Borrower shall pay any and all fees, charges and expenses arising from such conversion into an alternative currency and any fees, charges, expenses and shortfalls arising from the conversion of such proceeds back into Dollars.

5.03Conditions to each Borrowing Date. The obligation of each Lender to make Loans on any Borrowing Date is subject to the satisfaction of each of the following conditions:

(g)Borrowing Notice. The Administrative Agent shall have received a Notice of Borrowing as required by Section 2.03.

(h)Representations and Warranties. Before and after giving effect to the Loans being incurred on such date, all representations and warranties contained herein or in any other Credit Document shall be true and correct in all material respects both before and after giving effect to such Loans with the same effect as though such representations and warranties had been made on the date of such Loans (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date).

(i)No Default or Event of Default. No Event of Default and no event, which with the giving of notice or lapse of time, or both, would be an Event of Default shall have occurred and be continuing, or would result from the Loans being incurred on such date.

(j)Collateral Maintenance Test. On each Borrowing Date and immediately after giving effect to the Loans incurred on such date, the sum of (i) the Aggregate Appraised Value of the Collateral Vessels which have not been sold, transferred, lost or otherwise disposed of (it being understood that permitted chartering arrangements do not constitute disposals for this purpose) on such Borrowing Date and (ii) the fair market value of any Additional Collateral (as determined in good faith by the Administrative Agent) shall be equal to or greater than 140% of the aggregate outstanding principal amount of the Loans.

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The acceptance of the benefits of each Loan shall constitute a representation and warranty by the Borrower to the Administrative Agent and each of the Lenders that all of the applicable conditions specified in Section 5 and applicable to such Borrowing have been satisfied or waived as of that time. All of the applicable Notes, certificates, legal opinions and other documents and papers referred to in Section 5 (including by reference to the Collateral and Guaranty Requirements), unless otherwise specified, shall be delivered to the Administrative Agent at the Notice Office for the account of each of the Lenders.

SECTION 6.Representations and Warranties. In order to induce the Lenders to enter into this Agreement and to make the Loans, the Borrower makes the following representations and warranties, after giving effect to the Transaction, all of which shall survive the execution and delivery of this Agreement and the Notes and the making of the Loans, with the borrowing of each Loan on or after the Closing Date being deemed to constitute a representation and warranty that the matters specified in this Section 6 are true and correct in all material respects on and as of the Closing Date and on each Borrowing Date (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date):

6.01Corporate/Limited Liability Company/Limited Partnership Status. Each Credit Party (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation and (ii) is duly qualified and is authorized to do business and is in good standing in each jurisdiction where the conduct of its business as currently conducted requires such qualifications, except for failures to be so qualified which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

6.02Corporate Power and Authority. Each Credit Party has the corporate or other applicable power and authority to (i) own its property and assets and to transact the business in which it is currently engaged and presently proposes to engage and (ii) execute, deliver and perform the terms and provisions of each of the Credit Documents to which it is party and has taken or will take in due course all necessary corporate or other applicable action to authorize the execution, delivery and performance by it of each of such Credit Documents.

6.03Title; Maintenance of Properties.

Except as permitted by Section 8.01, the Borrower has good and indefeasible title to all properties owned by it, free and clear of all Liens, other than Permitted Liens.

6.04Legal Validity and Enforceability.

(b)Each Credit Party has duly executed and delivered each of the Credit Documents to which it is party, and each of such Credit Documents constitutes the legal, valid and binding obligation of such Credit Party enforceable against such Credit Party in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law).

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(c)After the execution and delivery thereof and upon the taking of the actions mentioned in the immediately succeeding sentence, each of the Security Documents creates in favor of the Collateral Agent for the benefit of the Secured Creditors a legal, valid and enforceable fully perfected first priority security interest in and Lien on all right, title and interest of the Credit Parties party thereto in the Collateral described therein, subject only to Permitted Liens. Subject to Sections 5.02(d) and 6.06 and the definition of “Collateral and Guaranty Requirements,” no filings or recordings are required in order to perfect the security interests created under any Security Document except for filings or recordings which shall have been made on or prior to each Borrowing Date.

(d)Each of the Credit Documents is or, when executed will be, in proper legal form under the laws of the Republic of the Marshall Islands and the applicable Acceptable Flag Jurisdiction for the enforcement thereof under such laws, subject only to such matters which may affect enforceability arising under the law of the State of New York. To ensure the legality, validity, enforceability or admissibility in evidence of each such Credit Document in the Republic of the Marshall Islands and the applicable Acceptable Flag Jurisdiction, it is not necessary that any Credit Document or any other document be filed or recorded with any court or other authority in the applicable Acceptable Flag Jurisdiction, except as have been made, or will be made, in accordance with Section 5.

(e)None of the Credit Parties has a place of business in any jurisdiction which requires any of the Security Documents to be filed or registered in that jurisdiction to ensure the validity of the Security Documents to which it is a party unless all such filings and registrations have been made or will be made, in accordance with Section 5.

6.05No Violation. Neither the execution, delivery or performance by any Credit Party of the Credit Documents to which it is a party, nor compliance by it with the terms and provisions thereof, will (i) contravene any material provision of any applicable law, statute, rule or regulation or any applicable order, writ, injunction or decree of any court or governmental instrumentality, (ii) materially violate or result in any material breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (except Permitted Liens) upon any of the material properties or assets of the Borrower or any of its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other material agreement, contract or instrument, to which the Borrower or any of its Subsidiaries is a party or by which it or any of its material property or assets is bound or to which it may be subject or (iii) violate any provision of the Organizational Documents of the Borrower or any of its Subsidiaries.

6.06Governmental Approvals.

(a)No order, consent, approval, license, authorization or validation of, or filing, recording or registration with or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with, (i) the execution, delivery and performance by any Credit Party of any Credit Document to which it is a party or (ii) the legality, validity, binding effect or enforceability of any Credit Document to which it is a party, in each case, except (x) as have been obtained or made or (y) filings or other requisite actions necessary to perfect or establish the priority of the Liens created under the Security Documents.

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(b)No fees or taxes, including, without limitation, stamp, transaction, registration or similar taxes, are required to be paid to ensure the legality, validity, or enforceability of this Agreement or any of the other Credit Documents other than recording and filing fees and/or taxes which have been, or will be, paid as and to the extent due. Under the laws of the Republic of the Marshall Islands, the choice of the laws of the State of New York as set forth in the Credit Documents which are stated to be governed by the laws of the State of New York is a valid choice of law, and the irrevocable submission by each Credit Party to jurisdiction and consent to service of process and, where necessary, appointment by such Credit Party of an agent for service of process, in each case as set forth in such Credit Documents, is legal, valid, binding and effective.

6.07Balance Sheets; Financial Condition; Undisclosed Liabilities.

(b) (i) The audited consolidated balance sheet of the Borrower and its Subsidiaries at December 31, 2013 and the related consolidated statements of income and cash flows and changes in shareholders’ equity of the Borrower and its Subsidiaries for the fiscal year ended on December 31, 2013 and (ii) the unaudited consolidated balance sheet of the Borrower and its Subsidiaries at September 30, 2014 and the related consolidated statements of income and cash flows and changes in shareholders’ equity of the Borrower and its Subsidiaries for the nine-month period ended on such date, in each case furnished to the Lenders prior to the Closing Date, in each case present fairly in all material respects the consolidated financial condition of the Borrower and its Subsidiaries at the date of said financial statements and the results for the respective periods covered thereby, subject to normal year-end adjustments. All such financial statements have been prepared in accordance with GAAP consistently applied except to the extent provided in the notes to said financial statements and subject, in the case of the unaudited financial statements, to normal year-end audit adjustments and the absence of footnotes.

(c)All financial statements provided pursuant to Section 7.01(a) and Section 7.01(b) have been prepared in accordance with GAAP consistently applied except to the extent provided in the notes to said financial statements and subject, in the case of the unaudited financial statements, to normal year-end audit adjustments and the absence of footnotes.

(d)Except as fully disclosed in the balance sheets delivered pursuant to Section 6.07(a), there were, as of the date of delivery of the first balance sheets delivered pursuant to this Agreement, no liabilities or obligations with respect to the Borrower or any of its Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether or not due) which, either individually or in the aggregate, would be materially adverse to the Borrower and its Subsidiaries taken as a whole.

(e)Since December 31, 2013, nothing has occurred that has had or could reasonably be expected to have a Material Adverse Effect.

6.08Litigation. There is no litigation pending or, to the knowledge of any Credit Party, threatened (i) with respect to the Credit Documents or (ii) which would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

6.09True and Complete Disclosure.

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(a)All factual information (taken as a whole) furnished by or on behalf of the Credit Parties in writing to the Administrative Agent or any Lender (including, without limitation, all information contained in the Credit Documents to which any Credit Party is a party) for purposes of or in connection with this Agreement, the other Credit Documents or any transaction contemplated herein or therein was, as of the date such information was furnished (or, if such information expressly relates to a specific date, as of such specific date), taken as a whole, true and accurate in all material respects and did not fail to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time as such information was provided (or, if such information expressly relates to a specific date, as of such specific date).

(b)The projections delivered to the Administrative Agent and the Lenders prior to the Closing Date have been prepared in good faith and are based on reasonable assumptions (it being understood that such financial projections are subject to uncertainties and contingencies, which may be beyond the control of the Borrower and that no assurances are given by the Borrower that the projections will be realized).

6.10Use of Proceeds; Margin Regulations.

(a)All proceeds of the Term Loans shall be used (i) to finance, in part, the construction cost or contract price of certain Term Loan Vessels, (ii) to reimburse, in part, the construction cost or contract price of the Term Loan Vessels and (iii) to pay fees and expenses relating to the Transaction.

(b)All proceeds of the Revolving Loans shall be used (i) during the Revolving Loan Vessel Acquisition Period (x) to finance, in part, the construction cost or contract price (or, in the case of an acquisition, the applicable acquisition cost) related to the Revolving Loan Vessels or Substitution Vessels, as applicable, (y) to reimburse, in part, the construction cost or contract price of the Revolving Loan Vessels, and (z) to pay fees and expenses relating to the Transaction, and (ii) after the Revolving Loan Vessel Acquisition Period, (x) for the Borrower’s general corporate and working capital purposes and (y) to pay fees and expenses relating to the Transaction.

(c)No part of the proceeds of any Loan will be used to buy or carry any Margin Stock or to extend credit for the purpose of buying or carrying any Margin Stock. Neither the making of any Loan nor the use of the proceeds thereof will violate or be inconsistent with Regulations T, U or X of the Board of Governors of the Federal Reserve System.

(d)No proceeds of the Loans shall be made available directly or, to the best knowledge of the Borrower, indirectly, to or for the benefit of a Restricted Party in violation of Sanctions Laws nor shall they otherwise be applied in a manner or for a purpose prohibited by Sanctions Laws.

6.11Taxes; Tax Returns and Payments.

(a)All payments which a Credit Party is liable to make under the Credit Documents to which it is a party can properly be made without deduction or withholding for or on

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account of any tax payable under any law of any relevant jurisdiction applicable as of the Closing Date.

(b)The Borrower and each of its Subsidiaries has timely filed with the appropriate taxing authorities (or obtained extensions with respect thereto) all U.S. federal income tax returns, statements, forms and reports for taxes and all other material U.S. and non-U.S. tax returns, statements, forms and reports for taxes required to be filed by or with respect to the income, properties or operations of the Borrower and/or any of its Subsidiaries (the “Returns”). All such Returns accurately reflect in all material respects all liability for taxes of the Borrower and its Subsidiaries as a whole for the periods covered thereby. The Borrower and each of its Subsidiaries has at all times paid, or have provided adequate reserves (in accordance with GAAP) for the payment of, all taxes payable by them.

(c)There is no action, suit, proceeding, investigation, audit, or claim now pending or, to the best knowledge of any Credit Party, threatened by any authority regarding any taxes relating to the Borrower or any of its Subsidiaries.

(d)As of the Closing Date, neither the Borrower nor any of its Subsidiaries has entered into an agreement or waiver or been requested to enter into an agreement or waiver extending any statute of limitations relating to the payment or collection of material taxes of the Borrower or any of its Subsidiaries, or is aware of any circumstances that would cause the taxable years or other taxable periods of the Borrower or any of its Subsidiaries not to be subject to the normally applicable statute of limitations.

6.12Compliance with ERISA. Except as would not reasonably be expected to have a Material Adverse Effect, individually or in the aggregate,

(i)each Plan (and each related trust, insurance contract or fund), other than any Multiemployer Plan and each trust related to the Multiemployer Plan, is in compliance with its terms and with all applicable laws, including without limitation ERISA and the Code;

(ii)each Plan (and each related trust, if any), other than any Multiemployer Plan and any trust related to the Multiemployer Plan, which is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service, or still has a remaining period of time in which to apply for or receive such letter and to make any amendments necessary to obtain a favorable determination;

(iii)no Reportable Event has occurred;

(iv)to the knowledge of the Borrower, no Multiemployer Plan is insolvent or in reorganization;

(v)no Plan (other than a Multiemployer Plan) has an Unfunded Current Liability;

(vi)each Plan (other than a Multiemployer Plan) which is subject to Section 412 of the Code or Section 302 of ERISA satisfies the minimum funding standard of such sections

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of the Code or ERISA, and no such Plan has applied for or received a waiver of the minimum funding standard or an extension of any amortization period, within the meaning of Section 412 of the Code or Section 303 of ERISA;

(vii)all contributions required to be made by the Borrower or any of its Subsidiaries or ERISA Affiliates with respect to a Plan subject to Title IV of ERISA have been or will be timely made (except as disclosed on Schedule V hereto);

(viii)neither the Borrower nor any of its Subsidiaries nor any ERISA Affiliate has any liability (including any indirect, contingent or secondary liability) to or on account of a Plan pursuant to Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4975 of the Code or reasonably expects to incur any such liability under any of the foregoing sections with respect to any Plan;

(ix)neither the Borrower nor any of its Subsidiaries nor any ERISA Affiliate has received written notice from the PBGC or a plan administrator (in the case of a Multiemployer Plan) indicating that proceedings have been instituted by the PBGC to terminate or appoint a trustee to administer any Plan which is subject to Title IV of ERISA;

(x)no action, suit, proceeding, hearing, audit or investigation with respect to the administration, operation or the investment of assets of any Plan, other than a Multiemployer Plan, (other than routine claims for benefits) is pending, or, to the best knowledge of the Borrower, expected or threatened;

(xi)using actuarial assumptions and computation methods consistent with Part 1 of subtitle E of Title IV of ERISA, the Borrower and its Subsidiaries and ERISA Affiliates have not incurred any liabilities to any Plans which are Multiemployer Plans as a result of a complete withdrawal therefrom;

(xii)no lien imposed under the Code or ERISA on the assets of the Borrower or any of its Subsidiaries or any ERISA Affiliate with respect to a Plan exists and no event has occurred which could reasonably be expected to give rise to any such lien on account of any Plan (other than a Multiemployer Plan); and

(xiii)the Borrower and its Subsidiaries do not maintain or contribute to any employee welfare plan (as defined in Section 3(1) of ERISA and subject to ERISA) which provides post-employment health benefits to retired employees or other former employees (other than as required by Section 601 of ERISA or other similar and applicable law).

(b)Except as would not reasonably be expected to have a Material Adverse Effect, individually or in the aggregate, (i) each Foreign Pension Plan has been maintained in compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities; (ii) all contributions required to be made with respect to a Foreign Pension Plan have been or will be timely made; (iii) neither the Borrower nor any of its Subsidiaries has incurred any obligation in connection with the termination of or withdrawal from any Foreign

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Pension Plan; and (iv) the present value of the accrued benefit liabilities (whether or not vested) under each Foreign Pension Plan, determined as of the end of the Borrower’s most recently ended fiscal year on the basis of reasonable actuarial assumptions, did not exceed the current value of the assets of such Foreign Pension Plan allocable to such benefit liabilities.

6.13Subsidiaries. On and as of the Closing Date, the Borrower has no Subsidiaries other than those Subsidiaries listed on Schedule III. Schedule III sets forth, as of the Closing Date, the percentage ownership (direct and indirect) of the Borrower in each class of capital stock or other Equity Interests of each of its Subsidiaries and also identifies the direct owner thereof. All outstanding shares of Equity Interests of each Subsidiary of the Borrower have been duly and validly issued, are fully paid and non-assessable and have been issued free of preemptive rights. No Subsidiary of the Borrower has outstanding any securities convertible into or exchangeable for its Equity Interests or outstanding any right to subscribe for or to purchase, or any options or warrants for the purchase of, or any agreement providing for the issuance (contingent or otherwise) of or any calls, commitments or claims of any character relating to, its Equity Interests or any stock appreciation or similar rights.

6.14Compliance with Statutes, etc.. The Borrower and each of its Subsidiaries is in compliance in all material respects with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the conduct of its business and the ownership of its property, except such noncompliance as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

6.15Investment Company Act. Neither the Borrower nor any Subsidiary Guarantor is an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

6.16Pollution and Other Regulations. (a)    Each of the Borrower and its Subsidiaries is in compliance with all applicable Environmental Laws governing its business, except for such failures to comply as could not reasonably be expected to have a Material Adverse Effect, and neither the Borrower nor any of its Subsidiaries is liable for any material penalties, fines or forfeitures for failure to comply with any of the foregoing.

(b)    All licenses, permits, registrations or approvals required for the business of the Borrower and each of its Subsidiaries, as conducted as of the Closing Date, under any Environmental Law have been secured and the Borrower and each of its Subsidiaries is in substantial compliance therewith, except for such failures to secure or comply as could not reasonably be expected to have a Material Adverse Effect.

(c)    Neither the Borrower nor any of its Subsidiaries is in any respect in noncompliance with, breach of or default under any applicable writ, order, judgment, injunction, or decree to which the Borrower or such Subsidiary is a party or which would affect the ability of the Borrower or any of its Subsidiaries to operate any Collateral Vessel, Real Property or other facility and no event has occurred and is continuing which would constitute noncompliance, breach of or default thereunder, except in each such case, such noncompliance, breaches or defaults as

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could not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.

(d)    There are no Environmental Claims pending or, to the knowledge of the Borrower, threatened against the Borrower or any Subsidiary which, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

(e)    There are no facts, circumstances, conditions or occurrences on or relating to any Collateral Vessel, Real Property or other facility owned or operated by the Borrower or any Subsidiary Guarantor that is reasonably likely (i) to form the basis of an Environmental Claim against the Borrower, any Subsidiary Guarantor or any Collateral Vessel, Real Property or other facility owned by the Borrower or any Subsidiary Guarantor, or (ii) to cause such Collateral Vessel, Real Property or other facility to be subject to any restrictions on its ownership, occupancy, use or transferability under any Environmental Law, except in each such case, such Environmental Claims or restrictions that individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect.

6.17Insurance. Schedule IV-B hereto sets forth a true and complete listing of all insurance maintained by each Credit Party with, as of the Closing Date, the amounts insured (and any deductibles) set forth therein.

6.18Concerning the Collateral Vessels. The name, registered owner (which shall be a Subsidiary Guarantor), flag (which shall be in an Acceptable Flag Jurisdiction), vessel type, deadweight tonnage, builder’s hull number, estimated delivery date and contract price of each Collateral Vessel shall be set forth on Schedule VI hereto along with the “Maximum Loan Amount” for each Collateral Vessel referred to in Section 2.01(c), which Schedule shall be updated by written notice to the Administrative Agent and Collateral Agent prior to or concurrently with each Borrowing Date to incorporate each additional Collateral Vessel.

6.19Money Laundering and Sanctions Laws.

(a)To the extent applicable, each Credit Party is in compliance, in all material respects, with the (i) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, (ii) all United States laws relating to terrorism or money laundering including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2011 (the “Executive Order”), and (iii) the PATRIOT Act. No part of the proceeds of the Loans will be used by any Credit Party, directly or, to the best knowledge of any Credit Party, indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

(b)None of the Credit Parties nor, to the best knowledge of the Borrower, any Affiliate of any Credit Party, is, or will be after consummation of the Transaction and application of the proceeds of the Loans, by reason of being a “national” of a “designated foreign country” or

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a “specially designated national” within the meaning of the Regulations of the Office of Foreign Assets Control (“OFAC”), United States Treasury Department (31 C.F.R., Subtitle B, Chapter V), or is included on the Specially Designated Nationals and Blocked Persons List maintained by OFAC or any list of Persons issued by OFAC pursuant to the Executive Order at its official website or any replacement website or other replacement official publication of such list, or for any other reason, in violation of, any United States Federal Statute or executive order concerning trade or other relations with any foreign country or any citizen or national thereof.

(c)The Borrower does not deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order or engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any United States anti-terrorism laws.

(d)Each Credit Party and their respective directors, officers or, to the knowledge of the Borrower after making due inquiry, employees, agents or representatives has been and is in compliance with Sanctions Laws.

(e)No Credit Party, nor their respective directors, officers or, to the best knowledge of the Borrower, employees, agents or representatives (i) is a Restricted Party, or is involved in any transaction through which it is reasonably likely to become a Restricted Party; or (ii) is subject to or involved in any inquiry, claim, action, suit, proceeding or investigation against it with respect to Sanctions Laws by any Sanctions Authority.

6.20No Immunity. The Borrower does not, nor does any other Credit Party or any of their respective properties, have any right of immunity on the grounds of sovereignty or otherwise from the jurisdiction of any court or from setoff or any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) under the laws of any jurisdiction.

6.21Pari Passu or Priority Status. The claims of the Administrative Agent, the Collateral Agent and the Lenders against the Borrower and the other Credit Parties under this Agreement or the other Credit Documents will rank at least pari passu with the claims of all unsecured creditors of the Borrower or any other Credit Party, as the case may be (other than claims of such creditors to the extent that they are statutorily preferred), and senior in priority to the claims of any creditor of the Borrower or any other Credit Party who is also a Credit Party.

6.22Solvency; Winding‑up, etc.

(a)On and as of the Closing Date and each Borrowing Date and after giving effect to the Transaction and to all Financial Indebtedness (including the Loans) being incurred or assumed and Liens created by the Credit Parties in connection therewith (i) the sum of the assets, at a fair valuation, of each Credit Party on a stand-alone basis and of the Borrower and its Subsidiaries taken as a whole will exceed their respective debts, (ii) each Credit Party on a stand-alone basis and the Borrower and its Subsidiaries taken as a whole have not incurred and do not intend to incur, and do not believe that they will incur, debts beyond their respective ability to pay such debts as

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such debts mature, and (iii) each Credit Party on a stand-alone basis and the Borrower and its Subsidiaries taken as a whole do not have unreasonably small working capital with which to continue their respective businesses. For purposes of this Section 6.22(a), “debt” means any liability on a claim, and “claim” means (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

(b)Subject to Section 8.02, neither the Borrower nor any other Credit Party has taken any corporate action nor have any other steps been taken or legal proceedings been started or (to its knowledge and belief) threatened against any of them for the winding‑up, dissolution or for the appointment of a liquidator, administrator, receiver, administrative receiver, trustee or similar officer of any of them or any or all of their assets or revenues nor have any of them sought any other relief under any applicable insolvency or bankruptcy law.

6.23Completeness of Documentation. (a) The copies of the Management Agreements, any Vessel Acquisition Documentation, any Intra-Group Charters and any Permitted Third Party Charters delivered to the Administrative Agent are true and complete copies of each such document constituting valid and binding obligations of the parties thereto enforceable in accordance with their respective terms.

(b) There has been no material amendment, waiver or variation of any Management Agreement, Intra-Group Charter or Permitted Third Party Charter which would be materially adverse to the interests of the Lenders without the consent of the Administrative Agent and no action has been taken by the parties thereto which would in any way render such document inoperative or unenforceable.

6.24No Undisclosed Commissions. There are and will be no commissions, rebates, premiums or other payments by or to or on account of any Credit Party, their shareholders or directors in connection with the financings of the Transaction as a whole other than as disclosed to the Administrative Agent in writing.

SECTION 7.Affirmative Covenants. The Borrower hereby covenants and agrees that on and after the Closing Date and until the Total Commitment has terminated and the Loans and Notes (in each case together with interest thereon), Fees and all other Obligations (other than indemnities described in Section 11.01(b) which are not then due and payable) incurred hereunder and thereunder, are paid in full:

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7.01Information Covenants. The Borrower will furnish to the Administrative Agent, with sufficient copies for each of the Lenders:

(k)Quarterly Financial Statements. Commencing with the quarter ending December 31, 2014, within 60 days after the close of each quarterly accounting period in each fiscal year of the Borrower, the unaudited consolidated balance sheets of the Borrower and its Subsidiaries as at the end of such quarterly accounting period and the related consolidated statements of income and cash flows, in each case for such quarterly accounting period and for the elapsed portion of the fiscal year ended with the last day of such quarterly accounting period, and in each case, setting forth comparative figures for the related periods in the prior fiscal year, all of which shall be certified by an Authorized Officer of the Borrower, subject to normal year-end audit adjustments.

(l)Annual Financial Statements. Within 120 days after the close of each fiscal year of the Borrower, (i) the audited consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year and the related consolidated statements of income and retained earnings and statement of cash flows for such fiscal year setting forth comparative figures for the preceding fiscal year and certified by PricewaterhouseCoopers or other independent certified public accountants of recognized national standing (including shipping sector specialists) reasonably acceptable to the Administrative Agent, together with a report of such accounting firm stating its audit was conducted in accordance with generally accepted auditing standards and (ii) management’s discussion and analysis of the important operational and financial developments during such fiscal year as filed with the Securities and Exchange Commission in the Borrower’s annual Form 20-F (or any successor or replacement of such form).

(m)Projections, etc. As soon as available but not more than 90 days after the end of each calendar year, cash flow projections (including a balance sheet and a statement of profit and loss and cash flow) of the Borrower and its Subsidiaries in reasonable detail for the calendar year in which such cash flow projections are actually delivered and the following three years.

(n)Appraisal Reports. At the time of delivery of the compliance certificates provided for in Section 7.01(e) required in connection with the second and fourth quarterly accounting periods in each fiscal year of the Borrower, and at any other time within 33 days of the written request of the Administrative Agent, Appraisals for each Collateral Vessel dated no more than 60 days prior to the delivery thereof in form and substance reasonably acceptable to the Administrative Agent and from two Approved Appraisers. All such Appraisals shall be conducted by, and made at the expense of, the Borrower (it being understood that the Administrative Agent may and, at the request of the Required Lenders, shall, upon notice to the Borrower, obtain such Appraisals and that the cost of all such Appraisals will be for the account of the Borrower); provided that, unless an Event of Default shall then be continuing, in no event shall the Borrower be required to pay for more than two appraisal reports from two Approved Appraisers obtained pursuant to this Section 7.01(d) in any single fiscal year of the Borrower, with the cost of any such reports in excess thereof to be paid by the Lenders on a prorata basis.

(o)Officer’s Compliance Certificates. At the time of the delivery of the financial statements provided for in Sections 7.01(a) and (b), a certificate of an Authorized Officer of the Borrower substantially in the form of Exhibit H to the effect that, to such officer’s knowledge, no

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Default or Event of Default has occurred and is continuing or, if any Default or Event of Default has occurred and is continuing, specifying the nature and extent thereof (in reasonable detail), which certificate shall (x) set forth the calculations required to establish whether the Borrower is in compliance with the Financial Covenants at the end of the relevant fiscal quarter or year, as the case may be and (y) certify that there have been no changes to any of Annexes A through E of the Pledge Agreement or Schedules 1 through 3 of the Global Assignment Agreement since the Initial Borrowing Date or, if later, since the date of the most recent certificate delivered pursuant to this Section 7.01(e), or if there have been any such changes, a list in reasonable detail of such changes (but, in each case with respect to this clause (y), only to the extent that such changes are required to be reported to the Collateral Agent pursuant to the terms of such Pledge Agreement or such Global Assignment Agreement) and whether the Borrower and the other Credit Parties have otherwise taken all actions required to be taken by them pursuant to such Pledge Agreement or such Global Assignment Agreement in connection with any such changes.

(p)Notice of Default, Material Litigation or Event of Loss. Promptly, and in any event within five Business Days after the Borrower obtains actual knowledge thereof, notice of (i) the occurrence of any event which constitutes a Default or Event of Default which notice shall specify the nature thereof, the period of existence thereof and what action the Borrower proposes to take with respect thereto, (ii) any material litigation or governmental investigation or proceeding pending or threatened against the Borrower or any of its Subsidiaries, (iii) any Event of Loss in respect of any Collateral Vessel, (iv) any damage or injury caused by or to a Collateral Vessel in excess of $5,000,000, and (v) any material default under any Intra-Group Charter or Permitted Third Party Charter.

(q)Other Reports and Filings. Promptly, copies of all financial information, proxy materials and other information and reports, if any, which the Borrower or any of its Subsidiaries has filed with the Securities and Exchange Commission (or any successor thereto) or deliver to holders of its Financial Indebtedness pursuant to the terms of the documentation governing such Financial Indebtedness (or any trustee, agent or other representative therefor).

(r)Environmental Matters. Promptly upon, and in any event within 10 Business Days after, the Borrower obtains knowledge thereof, written notice of any of the following environmental matters occurring after the Closing Date, except to the extent that such environmental matters could not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect:

(i)any Environmental Claim pending or threatened in writing against the Borrower or any of its Subsidiaries or any Collateral Vessel or property owned or operated or occupied by the Borrower or any Subsidiary Guarantor;

(ii)any condition or occurrence on or arising from any Collateral Vessel or property owned or operated or occupied by the Borrower or any Subsidiary Guarantor that (a) results in noncompliance by the Borrower or such Subsidiary Guarantor with any applicable Environmental Law or (b) could reasonably be expected to form the basis of an Environmental Claim against the Borrower or any of its Subsidiaries or any such Collateral Vessel or property;

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(iii)any condition or occurrence on any Collateral Vessel or property owned or operated or occupied by the Borrower or any Subsidiary Guarantor that could reasonably be expected to cause such Collateral Vessel or property to be subject to any restrictions on the ownership, occupancy, use or transferability by the Borrower or such Subsidiary Guarantor of such Collateral Vessel or property under any Environmental Law; and

(iv)the taking of any removal or remedial action in response to the actual or alleged presence of any Hazardous Material on any Collateral Vessel or property owned or operated or occupied by the Borrower or any Subsidiary Guarantor as required by any Environmental Law or any governmental or other administrative agency; provided that in any event the Borrower shall deliver to the Administrative Agent all material notices received by the Borrower or any of its Subsidiaries from any government or governmental agency under, or pursuant to, CERCLA or OPA.

All such notices shall describe in reasonable detail the nature of the claim, investigation, condition, occurrence or removal or remedial action and the Borrower’s or such Subsidiary’s response thereto. In addition, the Borrower will provide the Administrative Agent with copies of all material communications with any government or governmental agency and all material communications with any Person relating to any Environmental Claim of which notice is required to be given pursuant to this Section 7.01(h), and such detailed reports of any such Environmental Claim as may reasonably be requested by the Administrative Agent or the Required Lenders.

(s)Sanctions Matters.    Promptly and in any event within five Business Days after any Credit Party obtains actual knowledge thereof, the relevant Credit Party shall supply to the Administrative Agent (i) the details of any inquiry, claim, action, suit, proceeding or investigation pursuant to Sanctions Laws by any Sanctions Authority against it, any of its Subsidiaries, any of its direct or indirect owners, or any of their respective directors, officers, employees, agents or representatives as well as information on what steps are being taken to answer or oppose such inquiry, claim, action, suit, proceeding or investigation and (ii) that any Credit Party, any of its Subsidiaries or any of its direct or indirect owners, or any of their respective directors, officers, employees agents or representatives has become or is likely to become a Restricted Party.

(t)Other Information. From time to time, such other information with respect to the business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower and its Subsidiaries as the Administrative Agent (or the Lenders through the Administrative Agent) may reasonably request.

7.02Books, Records and Inspections. The Borrower will, and will cause the Subsidiary Guarantors to, keep proper books of record and account in which full, true and correct entries, in conformity in all material respects with generally accepted accounting principles and all requirements of law, shall be made of all dealings and transactions in relation to its business. The Borrower will, and will cause the Subsidiary Guarantors to, permit officers and designated representatives of the Administrative Agent and the Lenders as a group to visit and inspect, during regular business hours and under guidance of officers of the Borrower or any Subsidiary Guarantor, any of the properties of the Borrower or any Subsidiary Guarantor, and to examine the books of account of the Borrower or such Subsidiary Guarantor and discuss the affairs, finances and accounts

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of the Borrower or such Subsidiary Guarantor with, and be advised as to the same by, its and their officers and independent accountants, all upon reasonable advance notice and at such reasonable times and intervals and to such reasonable extent as the Administrative Agent or the Required Lenders may request; provided that, unless an Event of Default exists and is continuing at such time, the Administrative Agent and the Lenders shall not be entitled to request more than two such visitations and/or examinations in any fiscal year of the Borrower.

7.03Maintenance of Property; Insurance. The Borrower will, and will cause each Subsidiary Guarantor to, (i) keep all material property necessary to its business in good working order and condition (ordinary wear and tear and loss or damage by casualty or condemnation excepted), (ii) maintain insurance with respect to property that is not Collateral Vessels in at least such amounts and against at least such risks as are in accordance with normal industry practice for similarly situated insureds, (iii) maintain the Required Insurance with respect to the Collateral Vessels at all times, and (iv) furnish to the Administrative Agent, at the written request of the Administrative Agent, a complete description of the material terms of insurance carried, or, at the Borrower’s option, copies of such policies.

7.04Corporate Franchises. The Borrower will, and will cause each Subsidiary Guarantor to, do or cause to be done all things necessary to preserve and keep in full force and effect its existence and its material rights, franchises, licenses and patents (if any) used in its business, provided that nothing in this Section 7.04 shall prevent (i) sales or other dispositions of assets, consolidations or mergers by or involving the Borrower or any Subsidiary Guarantor which are permitted in accordance with Section 8.02 or (ii) the abandonment by the Borrower or any Subsidiary Guarantor of any rights, franchises, licenses and patents that could not be reasonably expected to have a Material Adverse Effect.

7.05Compliance with Statutes, etc. The Borrower will, and will cause each of its Subsidiaries to:

(c)comply with all laws or regulations: (i) applicable to their business, except when the failure to comply could not reasonably be expected to have a Material Adverse Effect and (ii) applicable to each Collateral Vessel, its ownership, employment, operation, management and registration, including the ISM Code, the ISPS Code, all Environmental Laws, all Sanctions Laws and the laws of the Flag Jurisdiction;

(d)obtain, comply with and do all that is necessary to maintain in full force and effect any approvals required by any Environmental Law; and

(e)without limiting paragraph (a) above, not employ any Collateral Vessel nor allow its employment, operation or management in any manner contrary to any applicable law or regulation including but not limited to the ISM Code, the ISPS Code, all applicable Environmental Laws and all applicable Sanctions Laws.

7.06Compliance with Environmental Laws. The Borrower will, and will cause each of its Subsidiaries to, comply in all material respects with all Environmental Laws applicable to the ownership or use of any Collateral Vessel or property now or hereafter owned or operated by

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the Borrower or any of its Subsidiaries, pay or cause to be paid within a reasonable time period all costs and expenses incurred in connection with such compliance (except to the extent being contested in good faith), and keep or cause to be kept all such Collateral Vessel or property free and clear of any Liens imposed pursuant to such Environmental Laws. Neither the Borrower nor any of its Subsidiaries will generate, use, treat, store, release or dispose of, or permit the generation, use, treatment, storage, release or disposal of, Hazardous Materials on or from any Collateral Vessel or property now or hereafter owned or operated or occupied by the Borrower or any of its Subsidiaries, or transport or permit the transportation of Hazardous Materials to or from any ports or property except in material compliance with all applicable Environmental Laws and as reasonably required by the trade in connection with the operation, use and maintenance of any such property or otherwise in connection with their businesses.

7.07ERISA. As soon as reasonably possible and, in any event, within ten (10) days after the Borrower knows or has reason to know of the occurrence of any of the following that could reasonably be expected to result in a Material Adverse Effect, the Borrower will deliver to the Administrative Agent a certificate of an Authorized Officer of the Borrower setting forth the details as to such occurrence and the action, if any, that the Borrower, such Subsidiary or such ERISA Affiliate is required or proposes to take:

(iii)that a Reportable Event has occurred (except to the extent that the Borrower has previously delivered to the Administrative Agent a certificate concerning such event pursuant to the next clause hereof); or

(iv)that a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is subject to the advance reporting requirement of PBGC Regulation Section 4043.61 (which is not waived), and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected to occur with respect to such Plan within the following 30 days; or

(v)that a Plan (other than a Multiemployer Plan) has failed to satisfy the minimum funding standard of Section 412 of the Code or Section 302 of ERISA, or an application has been made for a waiver or modification of the minimum funding standard (including any required installment payments) or an extension of any amortization period under Section 412 of the Code or Section 303 of ERISA with respect to a Plan (other than a Multiemployer Plan); or

(vi)that any contribution required to be made by the Borrower or any of its Subsidiaries or any ERISA Affiliate with respect to a Plan subject to Title IV of ERISA or by the Borrower or any of its Subsidiaries with respect to a Foreign Pension Plan has not been timely made; or

(vii)that a Plan has been terminated, reorganized, partitioned or declared insolvent under Title IV of ERISA; or

(viii)that Borrower or any of its Subsidiaries or any ERISA Affiliate has received written notice from the PBGC or a plan administrator (in the case of a Multiemployer Plan)

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indicating that proceedings have been instituted by the PBGC to terminate or appoint a trustee to administer a Plan which is subject to Title IV of ERISA; or

(ix)that the Borrower or any of its Subsidiaries or any ERISA Affiliate has any liability (including any indirect, contingent, or secondary liability) to or on account of the termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under Section 4975 of the Code.

(b)The Borrower and each of its applicable Subsidiaries shall ensure that all Foreign Pension Plans administered by it, and shall monitor that all other Foreign Pension Plans into which it makes payments, obtain or retain (as applicable) registered status under and as required by applicable law and are administered in a timely manner in all respects in compliance with all applicable laws except where the failure to do any of the foregoing could not be reasonably likely to result in a Material Adverse Effect.

7.08End of Fiscal Years; Fiscal Quarters. The Borrower will cause (i) each of its and its Subsidiaries’ fiscal years to end on December 31 and (ii) each of its and its Subsidiaries’ fiscal quarters to end on March 31, June 30, September 30 and December 31 of each year or such other date as shall be agreed to by the Administrative Agent (such consent not to be unreasonably withheld).

7.09Performance of Obligations. The Borrower will, and will cause each Subsidiary Guarantor to, perform all of its obligations under the terms of each mortgage, indenture, security agreement and other debt instrument (including, without limitation, the Credit Documents) by which it is bound, except such non-performances as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

7.10Payment of Taxes. The Borrower will, and will cause each of its Subsidiaries to, pay and discharge, all material taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits, or upon any properties belonging to it, prior to the date on which penalties attach thereto, and all lawful claims for sums that have become due and payable which, if unpaid, might become a Lien not otherwise permitted under Section 8.01, provided that neither the Borrower nor any of its Subsidiaries shall be required to pay any such tax, assessment, charge, levy or claim which is being contested in good faith and by proper proceedings if it maintains adequate reserves with respect thereto in accordance with GAAP.

7.11Further Assurances. The Borrower, and each other Credit Party, agrees that at any time and from time to time, at the expense of the Borrower or such other Credit Party, it will promptly execute and deliver all further instruments and documents, and take all further action that may be reasonably necessary, or that the Administrative Agent may reasonably require, to perfect and protect any Lien granted or purported to be granted hereby or by the other Credit Documents, or to enable the Collateral Agent to exercise and enforce its rights and remedies with respect to any Collateral. Without limiting the generality of the foregoing, the Borrower will execute, if required, and file, or cause to be filed, such financing or continuation statements under the UCC (or any non-U.S. equivalent thereto), or amendments thereto, such amendments or supplements to the Collateral Vessel Mortgages (including any amendments required to maintain Liens granted by such Collateral

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Vessel Mortgages), and such other instruments or notices, as may be reasonably necessary, or that the Administrative Agent may reasonably require, to protect and preserve the Liens granted or purported to be granted hereby and by the other Credit Documents.

(c)The Borrower hereby authorizes the Collateral Agent to file one or more financing or continuation statements under the UCC (or any non-U.S. equivalent thereto), and amendments thereto, relative to all or any part of the Collateral without the signature of the Borrower, where permitted by law. The Collateral Agent will promptly send the Borrower a copy of any financing or continuation statements which it may file without the signature of the Borrower and the filing or recordation information with respect thereto.

(d)If at any time any Subsidiary of the Borrower owns a Collateral Vessel or owns, directly or indirectly, an interest in any Subsidiary which owns a Collateral Vessel and such Subsidiary has not otherwise satisfied the Collateral and Guaranty Requirements, the Borrower will cause such Subsidiary (and any Subsidiary which directly or indirectly owns the Equity Interests of such Subsidiary to the extent not a Credit Party) to satisfy the Collateral and Guaranty Requirements with respect to each relevant Collateral Vessel as such Subsidiary would have been required to satisfy pursuant to Section 5 of this Agreement had such Subsidiary been a Credit Party on a Borrowing Date.

(d)    At the reasonable written request of any counterparty to an Interest Rate Protection Agreement entered into after the Closing Date (to the extent permitted under this Agreement to be entered into and secured) with one or more Lenders or any Affiliate thereof (even if, after the entry into such Interest Rate Protection Agreement, the respective Lender subsequently ceases to be a Lender for any reason), the applicable Credit Party and, at the written direction of the Collateral Agent, the mortgagee, shall promptly execute an amendment to each Collateral Vessel Mortgage adding obligations under such Interest Rate Protection Agreement as an additional secured obligation under each Collateral Vessel Mortgage (and allowing such obligations to be secured on such basis as set forth in this Agreement or in the Pledge Agreement), and cause the same to be promptly and duly recorded, and such amendment shall be in form and substance reasonably satisfactory to the Collateral Agent.

7.12Deposit of Earnings. Each Credit Party will cause the earnings derived from each of the respective Collateral Vessels, to the extent constituting Earnings and Insurance Collateral, to be deposited by the respective account debtor in respect of such earnings into one or more of the Concentration Accounts maintained for such Credit Party or the Borrower from time to time (it being understood that, absent an Event of Default, the Borrower and its Subsidiaries shall have full control of the funds within such Concentration Account). Without limiting any Credit Party’s obligations in respect of this Section 7.12, each Credit Party agrees that, in the event it receives any earnings constituting Earnings and Insurance Collateral, or any such earnings are deposited other than in one of the Concentration Accounts, it shall promptly deposit all such proceeds into one of the Concentration Accounts maintained for such Credit Party or the Borrower from time to time. No Credit Party will enter into any agreement or arrangement for the sharing of any Earnings and Insurance Collateral other than pursuant to a pooling agreement relating to the Permitted Scorpio Pooling Arrangements.

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7.13Ownership of Subsidiaries and Collateral Vessels.   The Borrower will directly (or indirectly through a Wholly-Owned Subsidiary of the Borrower), own 100% of the Equity Interests in each Subsidiary Guarantor.

(a)The Borrower shall cause each Subsidiary Guarantor, to at all times, be directly wholly-owned by one or more Credit Parties.

(b)The Borrower will cause each Collateral Vessel to be owned at all times by a single Subsidiary Guarantor that owns no other Collateral Vessels.

7.14Citizenship; Flag of Collateral Vessel; Collateral Vessel Classifications; Operation of Collateral Vessels. The Borrower will, and will cause each Subsidiary Guarantor which owns or operates a Collateral Vessel to, be qualified to own and operate such Collateral Vessel under the laws of the Republic of the Marshall Islands or another Acceptable Flag Jurisdiction, in each case in accordance with the terms of the related Collateral Vessel Mortgage, provided that the Collateral and Guaranty Requirements are satisfied with respect to such Collateral Vessel. Notwithstanding the foregoing, any Credit Party may transfer a Collateral Vessel to an Acceptable Flag Jurisdiction pursuant to the requirements set forth in the definition of “Flag Jurisdiction Transfer”.

(a)The Borrower will and will cause each Subsidiary Guarantor which operates a Collateral Vessel to (i) comply with and satisfy in all material respects all applicable Legal Requirements of the jurisdiction of such Collateral Vessel’s home port, now or hereafter from time to time in effect, in order that such Collateral Vessel shall continue to be documented pursuant to the laws of the jurisdiction of its home port with such endorsements as shall qualify such Collateral Vessel for participation in the trades and services to which it may be dedicated from time to time or (ii) not do or allow to be done anything whereby such documentation is or could reasonably be expected to be forfeited.

(b)Other than as a result of damage or casualty, the Borrower will and will cause each Subsidiary Guarantor which operates a Collateral Vessel to keep such Collateral Vessel in a good and sufficient state of repair consistent with the ship-ownership and management practice employed by first class owners of vessels of similar size and type and so as to ensure that each Collateral Vessel is classified in the highest class available for vessels of its age and type with an Acceptable Classification Society, (x) with respect to any Collateral Vessel the acquisition of which is being financed by a Loan pursuant to the terms hereof on the date of acquisition thereof, free of any conditions or recommendations applicable to such Collateral Vessel and (y) with respect to any Collateral Vessel other than the Collateral Vessels referred to in the preceding clause (x), free of any overdue conditions or recommendations affecting the seaworthiness of such Collateral Vessel, provided that if the classification of any of the Collateral Vessels shall be subject to any such recommendations, the Borrower will and will cause each Subsidiary Guarantor which operates such Collateral Vessel to provide a written report to the Administrative Agent describing the recommendations and assessing the steps required to be taken to prevent such recommendations from becoming overdue recommendations.

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(c)The Borrower will and will cause each Subsidiary Guarantor which operates a Collateral Vessel to (i) make or cause to be made all repairs to or replacement of any damaged, worn or lost parts or equipment such that the value of such Collateral Vessel will not be materially impaired and (ii) except as otherwise contemplated by this Agreement, not remove any material part of, or item of, equipment owned by the Credit Parties installed on such Collateral Vessel except in the ordinary course of the operation and maintenance of such Collateral Vessel unless (x) the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Lien (other than Permitted Liens) in favor of any Person other than the Collateral Agent and becomes, upon installation on such Collateral Vessel, the property of the Credit Parties and subject to the security constituted by the Collateral Vessel Mortgage or the Pledge Agreement or (y) the removal will not materially diminish the value of such Collateral Vessel.

(d)The Borrower will and will cause each Subsidiary Guarantor which operates a Collateral Vessel to submit such Collateral Vessel to such periodical or other surveys as may be required for classification purposes and, upon the written request of the Collateral Agent, supply to the Collateral Agent copies of all survey reports and classification certificates issued in respect thereof.

(e)The Borrower will and will cause each Subsidiary Guarantor which operates a Collateral Vessel to promptly pay and discharge all tolls, dues, taxes, assessments, governmental charges, fines, penalties, debts, damages and liabilities whatsoever which have given or may give rise to maritime or possessory Liens (other than Permitted Liens) on, or claims enforceable against, such Collateral Vessel other than any of the foregoing being contested in good faith and diligently by appropriate proceedings, and, in the event of arrest of any Collateral Vessel pursuant to legal process, or in the event of its detention in exercise or purported exercise of any such Lien or claim as aforesaid, procure, if possible, the release of such Collateral Vessel from such arrest or detention forthwith upon receiving notice thereof by providing bail or otherwise as the circumstances may require.

(f)The Borrower will and will cause each Subsidiary Guarantor which operates a Collateral Vessel to maintain, or cause to be maintained by the charterer or lessee of any Collateral Vessel, a valid Certificate of Financial Responsibility (Oil Pollution) issued by the United States Coast Guard pursuant to the Federal Water Pollution Control Act to the extent that such certificate may be required by applicable Legal Requirements for any Collateral Vessel and such other similar certificates as may be required in the course of the operations of any Collateral Vessel pursuant to the International Convention on Civil Liability for Oil Pollution Damage of 1969, or other applicable Legal Requirements.

(g)The Borrower will and will cause each Subsidiary Guarantor which operates a Collateral Vessel to cause such Collateral Vessels to be managed by the Technical Manager and the Commercial Manager, provided that nothing herein shall be construed so as to prohibit a Technical Manager or a Commercial Manager from sub-contracting its management duties.

7.15Use of Proceeds. The Borrower will use the proceeds of the Loans only as provided in Section 6.10.

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7.16Charter Contracts. In connection with any Permitted Third Party Charters having an indicated duration of at least 24 months (including any optional extensions or renewals) and any Intra-Group Charter Contract (other than, in each case, in connection with Permitted Scorpio Pooling Arrangements), the applicable Credit Party shall, at its own cost and expense, promptly and duly execute and deliver to the Collateral Agent an Assignment of Charters in respect of such charter contract (if permitted thereunder), and (i) will use its commercially reasonable efforts to cause the charterer under such Permitted Third Party Charter and (ii) will cause the charterer under such Intra-Group Charter Contract to execute and deliver to the Collateral Agent a consent to the Assignment of Charters in form and substance reasonably satisfactory to the Administrative Agent.

7.17Separate Existence. The Borrower will, and will cause each Subsidiary Guarantor to:

(a)maintain its books, financial records and accounts, including checking and other bank accounts, and custodian and other securities safekeeping accounts, separate and distinct from those of the other Subsidiary Guarantors;

(b)maintain its books, financial records and accounts (including inter-entity transaction accounts) in a manner so that it will not be difficult or costly to segregate, ascertain or otherwise identify their assets and liabilities separate and distinct from the assets and liabilities of the other Subsidiary Guarantors;

(c)not commingle any of its assets, funds or liabilities with the assets, funds or liabilities of the other Subsidiary Guarantors;

(d)observe all requisite organizational procedures and formalities, including the holding of meetings of the boards of directors as required by its Organizational Documents, the recordation and maintenance of minutes of such meetings, and the recordation of and maintenance of resolutions adopted at such meetings;

(e)except as permitted by Section 8.02, not be consensually merged or consolidated with the other Subsidiary Guarantors (other than for financial reporting purposes);

(f)all transactions, agreements and dealings between the Borrower and the Subsidiary Guarantors (including, in each case, transactions, agreements and dealings pursuant to which the assets or property of one is used or to be used by the other), will reflect the separate identity and legal existence of each such Person;

(g)transactions between any of the Borrower and the Subsidiary Guarantors, on the one hand, and any third parties, on the other hand, will be conducted in the name of the Borrower or such Subsidiary Guarantor, as applicable, as an entity separate and distinct from the Borrower or such Subsidiary Guarantor, as applicable; and

(h)no Subsidiary Guarantor will refer to the Borrower as a department or division of such Subsidiary Guarantor and will not otherwise refer to the Borrower in a manner inconsistent with its status as a separate and distinct legal entity.

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7.18Sanctions. Each Credit Party shall ensure that none of it, nor any of its directors or officers, and shall use its best efforts to ensure that none of its employees, agents or representatives or any other person acting on any of their behalf is or will become a Restricted Party.

7.19Maintenance of Listing. The Borrower shall maintain its listing on the New York Stock Exchange or such other reputable international stock exchange approved by the Agent (acting on the instructions of the Required Lenders) in writing, such approval not to be unreasonably withheld or delayed.

SECTION 8.Negative Covenants. The Borrower hereby covenants and agrees that on and after the Closing Date and until the Total Commitment has terminated and the Loans and Notes (in each case together with interest thereon), Fees and all other Obligations (other than indemnities described in Section 11.01(b) which are not then due and payable) incurred hereunder and thereunder, are paid in full:

8.01Liens. The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with respect to any Collateral, whether now owned or hereafter acquired, or sell any such Collateral subject to an understanding or agreement, contingent or otherwise, to repurchase such Collateral (including sales of accounts receivable with recourse to the Borrower or any of its Subsidiaries); provided that the provisions of this Section 8.01 shall not prevent the creation, incurrence, assumption or existence of the following (Liens described below are herein referred to as “Permitted Liens”):

(j)inchoate Liens for taxes, assessments or governmental charges or levies not yet due and payable or Liens for taxes, assessments or governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves have been established in accordance with GAAP;

(k)Liens imposed by law, which were incurred in the ordinary course of business and do not secure Financial Indebtedness for borrowed money, such as carriers’, warehousemen’s, materialmen’s and mechanics’ liens and other similar Liens arising in the ordinary course of business, and (x) which do not in the aggregate materially detract from the value of the Collateral and do not materially impair the use thereof in the operation of the business of the Borrower or any Subsidiary Guarantor or (y) which are being contested in good faith by appropriate proceedings, which proceedings (or orders entered in connection with such proceedings) have the effect of preventing the forfeiture or sale of the Collateral subject to any such Lien;

(l)Liens created pursuant to the Security Documents;

(m)Liens arising out of judgments, awards, decrees or attachments with respect to which the Borrower or any of its Subsidiaries shall in good faith be prosecuting an appeal or proceedings for review, provided that the aggregate amount of all such judgments, awards, decrees or attachments shall not exceed the Materiality Amount;

(n)Liens in respect of seamen’s wages, chartering operations, drydocking and maintenance which are not past due and other maritime Liens arising in the ordinary course of

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business up to an aggregate amount not to exceed the Materiality Amount, which are for amounts (x) not more than 30 days past due or (y) which are being contested in good faith by appropriate proceedings, which proceedings (or orders entered in connection with such proceedings) have the effect of preventing the forfeiture or sale of the Collateral subject to any such Lien;

(o)Intra-Group Charters and Permitted Third Party Charters;

(p)Liens granted in favor of Nordea, its branches and/or its Affiliates pursuant to the account agreements establishing the Concentration Account;

(q)Liens which rank after the Liens created by the Security Documents to secure the performance of bids, tenders, bonds or contracts; provided that (i) such bids, tenders, bonds or contracts directly relate to the Collateral Vessels, are incurred in the ordinary course of business and do not relate to the incurrence of Financial Indebtedness for borrowed money, and (ii) at any time outstanding, the aggregate amount of Liens under this clause (h) shall not secure obligations in excess of the Materiality Amount; and

(r)Liens for salvage or general average for amounts which are not delinquent or which are being contested in good faith and by appropriate proceedings diligently conducted if adequate reserves with respect thereto are maintained on the books of the applicable Credit Party in accordance with GAAP.

8.02Consolidation, Merger, Sale of Assets, etc. The Borrower will not, and will not permit any Subsidiary Guarantor to, wind up, liquidate or dissolve its affairs or enter into, any transaction of merger or consolidation, or convey, sell, lease, charter or otherwise dispose of all or substantially all of its assets (determined on a consolidated basis) or any of the Collateral, or enter into any sale-leaseback transactions involving all or substantially all of its assets (determined on a consolidated basis) or any of the Collateral, except that:

(f)the Borrower and each of its Subsidiaries may sell, lease or otherwise dispose of any vessel (or 100% of the Equity Interests of the Subsidiary that owns such vessel), provided that (i) in the case of any Collateral Vessels, such sale is made at fair market value (taking into consideration the Appraisals most recently delivered to the Administrative Agent (or obtained by the Administrative Agent) pursuant to Section 7.01(d) or delivered at the time of such sale to the Administrative Agent by the Borrower), (ii) in the case of the Collateral Vessels, 100% of the consideration in respect of such sale shall consist of cash or Cash Equivalents received by the Borrower, or the respective Subsidiary Guarantor which owned such Collateral Vessel, on the date of consummation of such sale, (iii) in the case of the Collateral Vessels, the net cash proceeds of such sale or other disposition shall be applied as required by Section 4.02, to repay the Loans, (iv) no Default or Event of Default shall exist at such time and (v) before and after giving effect to any sale of a Collateral Vessel, the Borrower shall be in compliance with the Financial Covenant set forth in Section 8.07(e);

(g)(i) any Credit Party may transfer assets or lease to or acquire or lease assets from any other Credit Party and (ii) the Borrower or any Subsidiary of the Borrower (other than a Subsidiary Guarantor) may transfer assets or lease to or acquire or lease assets from the Borrower

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or any other Subsidiary of the Borrower (other than a Subsidiary Guarantor) or any Subsidiary of the Borrower (other than a Subsidiary Guarantor) may be merged into any Subsidiary of the Borrower (other than a Subsidiary Guarantor) or any Subsidiary Guarantor may be merged into the Borrower or any other Subsidiary Guarantor, in each case so long as (x) all actions necessary or desirable to preserve, protect and maintain the security interest and Lien of the Collateral Agent in any Collateral held by any Person involved in any such transaction are taken to the satisfaction of the Administrative Agent and (y) no Default or Event of Default exists after giving effect thereto;

(h)following a Collateral Disposition permitted by this Agreement, the Subsidiary Guarantor that owned the Collateral Vessel that is the subject of such Collateral Disposition may dissolve (or the equivalent), provided that (x) the net cash proceeds of such Collateral Disposition shall be applied to repay the Loans as required by Section 4.02, (y) all of the proceeds of such dissolution shall be paid only to the Borrower or a Subsidiary Guarantor and (z) no Event of Default is continuing at the time of such dissolution;

(i)any Collateral Vessel Owner may enter into an Intra-Group Charter or a Permitted Third Party Charter with respect to such Collateral Vessel;

(j)the Borrower and its Subsidiaries may make dispositions made in the ordinary course of trading of the disposing entity (excluding dispositions of Collateral Vessels or other Collateral) including without limitation, the payment of cash as consideration for the purchase or acquisition of any asset or service or in the discharge of any obligation incurred for value in the ordinary course of trading; and

(k)the Borrower and its Subsidiaries may make dispositions of assets (other than the Collateral Vessels or other Collateral) owned by them in exchange for other assets comparable or superior as to type and value.

To the extent the Required Lenders waive the provisions of this Section 8.02 with respect to the sale of any Collateral, or any Collateral is sold as permitted by Sections 8.02(a) or (b), such Collateral (unless sold to the Borrower or a Subsidiary of the Borrower) shall be sold free and clear of the Liens created by the Security Documents (which Liens shall be automatically released), and the Administrative Agent and Collateral Agent shall be authorized to take any actions deemed appropriate in order to effect the foregoing.

8.03Restricted Payments. The Borrower will not, and will not permit any Subsidiary Guarantor to, authorize, declare, pay or make any Restricted Payment, except that:

(f)any Subsidiary Guarantor may pay or make Restricted Payments to the Borrower or another Subsidiary Guarantor; and

(g)the Borrower may pay or make Restricted Payments, provided that:

(i)no Default or Event of Default exists at the time of such Restricted Payment and after giving effect thereto; and

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(ii)immediately after giving effect to such Restricted Payment, the Borrower and its Subsidiaries shall be in pro forma compliance with the Financial Covenants.

8.04Indebtedness. The Borrower will not, and will not permit any Subsidiary Guarantor to, contract, create, incur, assume or suffer to exist any Financial Indebtedness (other than Financial Indebtedness incurred pursuant to this Agreement and the other Credit Documents), except that:

(f)the Borrower and each Subsidiary Guarantor may incur and remain liable for intercompany Financial Indebtedness permitted pursuant to Section 8.05(b);

(g)the Borrower and each Subsidiary Guarantor may enter into and remain liable for Contingent Obligations (other than Contingent Obligations constituting Financial Indebtedness) in respect of Collateral Vessel Acquisitions; and

(h)the Borrower (but not any Subsidiary Guarantor) may incur and remain liable for Financial Indebtedness not otherwise permitted under this Section 8.04 so long as (i) no Default or Event of Default exists at the time of such incurrence and after giving effect thereto and (ii) the Borrower and its Subsidiaries shall be in pro forma compliance with the Financial Covenants both before and after giving effect to such Financial Indebtedness.

8.05Advances, Investments and Loans. The Borrower will not, and will not permit any of the Subsidiary Guarantors to, directly or indirectly, lend money or credit or make advances to any Person, or purchase or acquire any Equity Interests in, or make any capital contribution to any other Person (each of the foregoing an “Investment” and, collectively, “Investments”), except that the following shall be permitted:

(f)the Borrower and the Subsidiary Guarantors may acquire and hold accounts receivable owing to any of them;

(g)the Borrower and the Subsidiary Guarantors may make Investments among themselves, provided that any loans or advances by or to the Borrower or any Subsidiary Guarantors pursuant to this Section 8.05(b) shall be subordinated to the Obligations of the respective Credit Party pursuant to written subordination provisions substantially in the form of Exhibit I;

(h)Investments and capital expenditures by the Borrower or Subsidiary Guarantors related to the use, operation, trading, repairs and maintenance work on Collateral Vessels or improvements to Collateral Vessels;

(i)Investments by the Borrower and the Subsidiary Guarantors in Interest Rate Protection Agreements to the extent permitted by Section 8.15;

(j)the Borrower and its Subsidiaries (other than the Subsidiary Guarantors) may establish new Subsidiaries;

(k)the Borrower and the Subsidiary Guarantors may make Investments to effect a Collateral Vessel Acquisition (including by acquiring a special purpose vehicle); and

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(l)the Borrower and its Subsidiaries (other than the Subsidiary Guarantors) may make Investments not otherwise permitted by this Section 8.05 so long as (i) no Event of Default shall have occurred and be continuing and (ii) the Borrower and its Subsidiaries are in pro forma compliance with the Financial Covenants both before and after giving effect to such Investments.

For the avoidance of doubt, no Investment shall be made available, directly or indirectly, to or for the benefit of a Restricted Party in violation of Sanctions Laws nor shall they otherwise be applied in a manner or for a purpose prohibited by Sanctions Laws.

8.06Transactions with Affiliates. The Borrower will not, and will not permit any Subsidiary Guarantor to, enter into any transaction or series of related transactions, whether or not in the ordinary course of business, with any Affiliate of such Person, other than on terms and conditions no less favorable to such Person as would be obtained by such Person at that time in a comparable arm’s-length transaction with a Person other than an Affiliate, except that:

(c)Restricted Payments may be paid to the extent provided in Section 8.03;

(d)loans and Investments may be made and other transactions may be entered into between the Borrower and the Subsidiary Guarantors to the extent not prohibited by Sections 8.04 and 8.05;

(e)the Borrower and the Subsidiary Guarantors may pay customary director’s fees;

(f) the Borrower and the Subsidiary Guarantors may enter into employment agreements or arrangements with their respective officers and employees in the ordinary course of business;

(g)in lieu of Overhead Expenses incurred by the Borrower and the Subsidiary Guarantors, the Borrower and the Subsidiary Guarantors may pay amounts to one or more Affiliates in exchange for the provision of Overhead Expenses in respect of the Borrower and the Subsidiary Guarantors (so long as the cost paid by the Borrower and the Subsidiary Guarantors is fair and reasonable); and

(h)the Borrower may enter into and perform the Management Agreement.

The Borrower will not pay any fees or other amounts to its Affiliates other than as permitted by Section 8.03 and this Section 8.06.

8.07Financial Covenants.

(c)Minimum Liquidity. The Borrower will not permit at any time Consolidated Liquidity to be less than the greater of (i) $50,000,000 and (ii) the product of $850,000 multiplied by the number of vessels owned by the Borrower or a Subsidiary of the Borrower at such time (the “Minimum Liquidity”).

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(d)Minimum Consolidated Tangible Net Worth. The Borrower will not permit Consolidated Tangible Net Worth on the last day of any Test Period to be less than (a) $500,000,000, plus (b) 25% of the Borrower’s cumulative positive Consolidated Net Income for each fiscal quarter commencing on or after December 31, 2013 and (c) 50% of the Equity Proceeds received by the Borrower from any issuance of Equity Interests in the Borrower occurring on or after December 31, 2013.

(e)Maximum Leverage Ratio. The Borrower will not permit the Leverage Ratio to be greater than 0.60 to 1.00 on the last day of any Test Period, commencing with the Test Period ending December 31, 2014.

(f)Minimum Interest Coverage. The Borrower will not permit the Interest Coverage Ratio for any Test Period, calculated quarterly on a trailing four-quarter basis, to be less than:

(i)on the last day of each Test Period from and including the Test Period ending September 30, 2015 to and including the Test Period ending December 31, 2016: 1.00 to 1.00;

(ii)on the last day of each Test Period from and including the Test Period commencing January 1, 2017 to and including the Test Period ending December 31, 2017: 2.00 to 1.00; and

(iii)on the last day of each Test Period thereafter: 2.50 to 1.00.

(g)Collateral Maintenance. The Borrower will not permit the sum of (i) the Aggregate Appraised Value of the Collateral Vessels which have not been sold, transferred, lost or otherwise disposed of (it being understood that permitted chartering arrangements do not constitute disposals for this purpose) and (ii) any Additional Collateral to fall below an amount that is equal to or less than 140% of the aggregate outstanding principal amount of the Loans; provided that any non-compliance with this Section 8.07(e) shall not constitute an Event of Default (but shall constitute a Default), so long as within 60 days of the occurrence of such non-compliance, the Borrower shall either (x) post Additional Collateral (and shall during such period, and prior to satisfactory completion thereof, be diligently carrying out such actions) or (y) prepay Loans in an amount sufficient to cure such non-compliance.

(h)Changes to GAAP. If at any time after the Closing Date, the GAAP requirements materially change so as to impact the Financial Covenants set forth in Sections 8.07(a), (b), (c) and (d) and if agreed between the Borrower and the Administrative Agent (acting upon the written consent of the Required Lenders), this Agreement shall be amended and/or supplemented to reflect such changes. If no such agreement is made, the GAAP requirements prior to any such change shall apply in determination of the Financial Covenants.

8.08Limitation on Modifications of Certain Documents; etc. The Borrower will not, and the Borrower will not permit any Subsidiary Guarantor to amend, modify or change its Organizational Documents or any agreement entered into by it with respect to its Equity Interests,

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or enter into any new agreement with respect to its Equity Interests, other than any amendments, modifications or changes or any such new agreements which are not in any way materially adverse to the interests of the Lenders.

(e)The Borrower or relevant Collateral Vessel Owner party to any Management Agreement, Intra-Group Charter or Permitted Third Party Charter will not agree to any amendments thereto or grant any waiver thereunder, in each case, which would be materially adverse to the interests of the Lenders, without the consent of the Administrative Agent.

8.09Limitation on Certain Restrictions on Subsidiary Guarantors. The Borrower will not, and will not permit any Subsidiary Guarantor to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any such Subsidiary Guarantor to (a) pay dividends or make any other distributions on its capital stock or any other interest or participation in its profits owned by the Borrower or any Subsidiary Guarantor, or pay any Financial Indebtedness owed to the Borrower or a Subsidiary Guarantor, (b) make loans or advances to the Borrower or any of the Subsidiary Guarantors or (c) transfer any of its properties or assets to the Borrower or any of the Subsidiary Guarantors, except for such encumbrances or restrictions existing under or by reason of (i) applicable law, (ii) this Agreement and the other Credit Documents, (iii) customary provisions restricting subletting or assignment of any lease governing a leasehold interest of the Borrower or a Subsidiary Guarantor, (iv) customary provisions restricting assignment of any agreement (including a ship purchase agreement) entered into by the Borrower or a Subsidiary Guarantor in the ordinary course of business, (v) any holder of a Lien on assets other than the Collateral may restrict the transfer of the asset or assets subject thereto and (vi) restrictions which are not more restrictive than those contained in this Agreement.

8.10Limitation on Issuance of Capital Stock. (i) The Borrower will not permit any Subsidiary Guarantor to issue any Preferred Equity (or equivalent equity interests) and (ii) the Borrower will not, and will not permit any Subsidiary to, issue any Disqualified Stock (or equivalent equity interests).

(e)The Borrower will not permit any Subsidiary Guarantor to issue any capital stock (including by way of sales of treasury stock) or any options or warrants to purchase, or securities convertible into, capital stock, except (i) for transfers and replacements of then outstanding shares of capital stock, (ii) for stock splits, stock dividends and additional issuances which do not decrease the percentage ownership of the Borrower or any of its Subsidiaries in any class of the capital stock of such Subsidiary, (iii) in the case of foreign Subsidiaries of the Borrower, to qualify directors to the extent required by applicable law and (iv) to the Borrower or another Subsidiary Guarantor. All capital stock of any Subsidiary Guarantor issued in accordance with this Section 8.10(b) shall be delivered to the Collateral Agent pursuant to the Pledge Agreement.

8.11Business. The Borrower will not permit any Subsidiary Guarantor to engage in any business or own any significant assets or have any material liabilities other than its (i) ownership of the Equity Interests of, and the management of, Subsidiary Guarantors and (ii) the acquisition, ownership, management and operation of Collateral Vessels and activities related thereto, provided that the Subsidiary Guarantors may engage in those activities that are incidental to (A) the maintenance of its legal existence (including the ability to incur fees, costs, expenses and

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taxes relating to such maintenance), (B) legal, tax and accounting matters in connection with any of the foregoing or following activities as a member of the consolidated group of the Borrower, (C) the entering into, and performing its obligations under, this Agreement, the other Credit Documents and its Organizational Documents, (D) holding any cash, Cash Equivalents and other property necessary or desirable in connection with, or incidental to, the ownership, management and operation of the Collateral Vessel; (E) making of Restricted Payments and Investments, incurring Financial Indebtedness consisting of (x) any guarantee of the obligations of any Credit Party in favor of the Technical Manager, Commercial Manager or other manager, (y) under the Credit Documents and (z) Contingent Obligations in respect of any Collateral Vessel Acquisitions and any other activities to the extent permitted hereunder; (F) providing indemnification to officers and directors; and (G) any activities incidental or reasonably related to the foregoing.

(a)The Borrower will not, and will not permit any Subsidiary Guarantor to, engage in any business other than the construction, ownership, management and operation of dry bulker vessels or other activities directly related thereto, and similar or related or complimentary businesses.

8.12Bank Accounts. The Borrower will not permit any Subsidiary Guarantor to maintain any deposit, savings, investment or other similar accounts other than the Concentration Accounts.

8.13Jurisdiction of Employment. The Borrower will not, and will not permit the Subsidiary Guarantors or any third party charterer of a Collateral Vessel to employ or cause to be employed any Collateral Vessel in any country or jurisdiction in which (i) the Borrower, the Subsidiary Guarantors or such third party charterer of a Collateral Vessel is prohibited by law from doing business, (ii) the Lien created by the applicable Collateral Vessel Mortgage will be rendered unenforceable or (iii) the Collateral Agent’s foreclosure or enforcement rights will be materially impaired or hindered.

8.14Operation of Collateral Vessels. The Borrower will not, and will not permit any Subsidiary Guarantor to, engage in the following undertakings:

(a)    without giving prior written notice thereof to the Collateral Agent, change the registered owner, name, official or patent number, as the case may be, the home port or class of any Collateral Vessel;

(b)    change the Commercial Manager or Technical Manager unless the existing Commercial Manager or Technical Manager resigns and is not replaced within 90 days by a commercial manager or technical manager reasonably satisfactory to the Administrative Agent; or

(c)    without the prior consent of the Administrative Agent (or, in the case of the registry, the Required Lenders) (such consent not to be unreasonably withheld), change the registered flag registry or classification society of any Collateral Vessel unless the change is to an Acceptable Flag Jurisdiction (and the requirements of the Flag Jurisdiction Transfer have been satisfied) or to an Acceptable Classification Society.

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8.15Interest Rate Protection Agreements. The Borrower will not and will not permit any Subsidiary Guarantor to enter into Interest Rate Protection Agreements or other hedging or similar agreements other than Interest Rate Protection Agreements entered into in the ordinary course of business and not for speculative purposes, provided that the Borrower may only enter into and remain liable under Interest Rate Protection Agreements entered into with a Lender or an Affiliate of a Lender with respect to the Collateral Vessels or the Obligations of the Borrower and each other Credit Party under this Agreement.

SECTION 9.Events of Default. Each of the following shall constitute an “Event of Default” for purposes of this Agreement and the other Credit Documents:

9.01Payments. The Borrower shall (i) default in the payment when due of any principal or interest payable in connection with any Loan or any Note or (ii) default in the payment when due of any other sums payable under a Credit Document or under any document relating to a Credit Document or, in the case of sums payable on demand, within five (5) Business Days after the date when first demanded; provided that if such failure to pay a sum when due is solely the result of an administrative or technical error, it shall not constitute an Event of Default unless such failure continues unremedied for more than three (3) Business Days; or

9.02Representations, etc. Any representation, warranty or statement made by any Credit Party herein or in any other Credit Document or in any certificate delivered pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which made or deemed made; or

9.03Covenants. Any Credit Party shall (i) default in the due performance or observance by it of any term, covenant or agreement contained in Sections 7.01(f)(i), 7.03 (other than clause (i) or (iv) thereof), 7.06, 7.18, 7.19 or Section 8 (other than Section 8.07(f)) or (ii) default in the due performance or observance by it of any other term, covenant or agreement contained in this Agreement or any other Credit Document to which it is a party and, in the case of this clause (ii), such default shall continue unremedied for a period of 30 days after written notice to the Borrower by the Administrative Agent; or

9.04Default Under Other Agreements. (i) The Borrower or any of its Subsidiaries shall default in any payment of any Financial Indebtedness (other than the Obligations) beyond the period of grace, if any, provided in the instrument or agreement under which such Financial Indebtedness was created or (ii) the Borrower or any of its Subsidiaries shall default in the observance or performance of any agreement or condition relating to any Financial Indebtedness (other than the Obligations) or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Financial Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such Financial Indebtedness to become due prior to its stated maturity, or (iii) any Financial Indebtedness (other than the Obligations) of the Borrower or any of its Subsidiaries shall be declared to be due and payable, or required to be prepaid other than by a regularly scheduled required prepayment or in connection with an asset sale, casualty or condemnation or other similar mandatory prepayment, prior to the stated maturity thereof, provided

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that it shall not be a Default or Event of Default under this Section 9.04 unless the aggregate principal amount of all Financial Indebtedness as described in preceding clauses (i) through (iii), inclusive, exceeds $10,000,000; or

9.05Bankruptcy, etc. The Borrower or any of its Material Subsidiaries shall commence a voluntary case concerning itself under Title 11 of the United States Code entitled “Bankruptcy,” as now or hereafter in effect, or any successor thereto (the “Bankruptcy Code”); or an involuntary case is commenced against the Borrower or any of its Material Subsidiaries and the petition is not controverted within 30 days after service of summons (or such longer period as may be provided by such summons), or is not dismissed within 60 days, after commencement of the case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge of, all or substantially all of the property of the Borrower or any of its Material Subsidiaries, or the Borrower or any of its Material Subsidiaries commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Borrower or any of its Material Subsidiaries or there is commenced against the Borrower or any of its Material Subsidiaries any such proceeding which remains undismissed for a period of 60 days, or the Borrower or any of its Material Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or any of its Material Subsidiaries suffers any appointment of any custodian or the like for it or any substantial part of its property to continue undischarged or unstayed for a period of 60 days; or the Borrower or any of its Material Subsidiaries makes a general assignment for the benefit of creditors; or any corporate action is taken by the Borrower or any of its Material Subsidiaries for the purpose of effecting any of the foregoing; or

9.06ERISA. If:

(i)(i) any Plan (other than a Multiemployer Plan) shall fail to satisfy the minimum funding standard required for any plan year or part thereof under Section 412 of the Code or Section 302 of ERISA or a waiver of such standard or extension of any amortization period is sought or granted under Section 412 of the Code or Section 303 of ERISA;

(ii) a Reportable Event shall have occurred;

(iii) a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA shall be subject to the advance reporting requirement of PBGC Regulation Section 4043.61 (which is not waived) and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur with respect to such Plan within the following thirty (30) days;

(iv) any Plan (other than a Multiemployer Plan) which is subject to Title IV of ERISA shall have had or is reasonably likely to have a trustee appointed to administer such Plan;

(v) any Plan which is subject to Title IV of ERISA is, or shall have been terminated or the subject of termination proceedings under ERISA;

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(vi) a contribution required to be made by the Borrower or any of its Subsidiaries or any ERISA Affiliate with respect to a Plan subject to Title IV of ERISA or by the Borrower or any of its Subsidiaries with respect to a Foreign Pension Plan is not timely made;

(vii) any Plan (other than a Multiemployer Plan) shall have an Unfunded Current Liability;

(viii) the Borrower or any of its Subsidiaries or any ERISA Affiliate has received written notice from the PBGC or a plan administrator (in the case of a Multiemployer Plan) indicating that proceedings have been instituted by the PBGC to terminate or appoint a trustee to administer a Plan subject to Title IV of ERISA;

(ix) the Borrower or any of its Subsidiaries or any ERISA Affiliate has or is reasonably likely to have any liability to or on account of a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4975 of the Code; or

(x) a “default,” within the meaning of Section 4219(c)(5) of ERISA, shall occur with respect any Multiemployer Plan;

(b) there shall result from any such event or events the imposition of a lien, the granting of a security interest, or a liability or a material and impending risk of incurring a liability; and

(c) such lien, security interest or liability, individually, and/or in the aggregate, has had, or would reasonably be expected to have, a Material Adverse Effect; or

9.07Security Documents. At any time after the execution and delivery thereof, any of the Security Documents shall, other than in accordance with the terms hereof or thereof, cease to be in full force and effect in any material respect, or shall cease in any material respect to give the Collateral Agent for the benefit of the Secured Creditors the Liens, rights, powers and privileges purported to be created thereby (including, without limitation, a perfected security interest in, and Lien on, all of the Collateral), in favor of the Collateral Agent, superior to and prior to the rights of all third Persons (except in connection with Permitted Liens), and subject to no other Liens (except Permitted Liens), or any “event of default” (as defined in any Collateral Vessel Mortgage) shall occur in respect of any Collateral Vessel Mortgage; or

9.08Subsidiaries Guaranty. After the execution and delivery thereof, any Subsidiaries Guaranty, or any material provision thereof, shall cease to be in full force or effect in any material respect as to the relevant Subsidiary Guarantor (unless such Subsidiary Guarantor is no longer a Subsidiary by virtue of a liquidation, sale, merger or consolidation permitted by Section 8.02) or any Subsidiary Guarantor (or Person acting by or on behalf of such Subsidiary Guarantor) shall deny or disaffirm such Subsidiary Guarantor’s obligations under the Subsidiaries Guaranty to which it is a party; or

9.09Judgments. One or more judgments or decrees shall be entered against the Borrower or any of its Subsidiaries involving in the aggregate for the Borrower and its Subsidiaries

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a liability (not paid or fully covered by a reputable and solvent insurance company) and such judgments and decrees either shall be final and non-appealable or shall not be vacated, discharged or stayed or bonded pending appeal for any period of 30 Business Days, and the aggregate amount of all such judgments, to the extent not covered by insurance, exceeds the Materiality Amount; or

9.10Illegality. It becomes unlawful or impossible:

(i)for any Credit Party to discharge any liability under the Credit Documents or to comply with any other obligation which the Required Lenders consider material under the Credit Documents, or

(ii)for the Administrative Agent, the Collateral Agent and the Lenders to exercise or enforce any material right under, or to enforce any security interest created by the Credit Documents; or

9.11Termination of Business.

Any Credit Party ceases or suspends or threatens to cease or suspend the carrying on of its business, or a part of its business (in each case other than in connection with drydockings, maintenance of the Collateral Vessel and other temporary suspensions of operations in the ordinary course of business) which, in the opinion of the Required Lenders, is material in the context of this Agreement; or

9.12Material Adverse Effect.

An event or series of events occurs which, in the reasonable opinion of the Required Lenders constitutes a Material Adverse Effect; or

9.13Authorizations and Consents.

Any consent necessary to enable a Collateral Vessel Owner to own, operate or charter the Collateral Vessel owned by it or to enable the Borrower or any other Credit Party to comply with any provision which the Required Lenders consider material of a Credit Document is not granted, expires without being renewed, is revoked or becomes liable to be revoked or any condition of such a consent is not fulfilled; or

9.14Arrest; Expropriation.

All or a material part of the undertakings, assets, rights or revenues of, or shares or other ownership interest in, any Credit Party are arrested, seized, nationalized, expropriated or compulsorily acquired by or under the authority of any government, provided that in the reasonable opinion of the Administrative Agent, such occurrence would adversely affect any Credit Party’s ability to perform its obligations under the Credit Documents to which it is a party.

Upon the occurrence and during the continuance of any Event of Default, the Administrative Agent may, and upon the written request of the Required Lenders, shall by written notice to the Borrower, take any or all of the following actions, without prejudice to the rights of the Administrative Agent,

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any Lender or the holder of any Note to enforce its claims against any Credit Party (provided that, if an Event of Default specified in Section 9.05 shall occur, the result which would occur upon the giving of written notice by the Administrative Agent to the Borrower as specified in clauses (i) and (ii) below shall occur automatically without the giving of any such notice): (i) declare the Commitments terminated, whereupon all Commitments of each Lender shall forthwith terminate immediately and any Commitment Commission shall forthwith become due and payable without any other notice of any kind; (ii) declare the principal of and any accrued interest in respect of all Loans, Notes and all Obligations owing hereunder to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Credit Party; or (iii) enforce, as Collateral Agent, all of the Liens and security interests created pursuant to the Security Documents.

SECTION 10.Agency and Security Trustee Provisions.

10.01Appointment. The Lenders in their capacity as Lenders and Other Creditors (by their acceptance of the benefits hereof and of the other Credit Documents) hereby irrevocably designate and appoint Nordea, as Administrative Agent (for purposes of this Section 10 the term “Administrative Agent” shall include Nordea (and/or any of its affiliates) in its capacity as Collateral Agent pursuant to the Security Documents and in its capacity as mortgagee (if applicable) and security trustee pursuant to the Collateral Vessel Mortgages) to act as specified herein and in the other Credit Documents. Each Lender hereby irrevocably authorizes, and each holder of any Note by the acceptance of such Note shall be deemed irrevocably to authorize, the Agents to take such action on its behalf under the provisions of this Agreement, the other Credit Documents and any other instruments and agreements referred to herein or therein and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of such Agent by the terms hereof and thereof and such other powers as are reasonably incidental thereto. The Agents may perform any of their duties hereunder by or through its respective officers, directors, agents, employees or affiliates and, may assign from time to time any or all of its rights, duties and obligations hereunder and under the Security Documents to any of its banking affiliates.

(h)The Lenders hereby irrevocably designate and appoint Nordea as security trustee solely for the purpose of holding the Collateral Vessel Mortgages on each of the Collateral Vessels in an Acceptable Flag Jurisdiction on behalf of the Lenders, from time to time, with regard to the (i) security, powers, rights, titles, benefits and interests (both present and future) constituted by and conferred on the Lenders or any of them or for the benefit thereof under or pursuant to the Collateral Vessel Mortgages (including, without limitation, the benefit of all covenants, undertakings, representations, warranties and obligations given, made or undertaken by any Lender in the Collateral Vessel Mortgages), (ii) all money, property and other assets paid or transferred to or vested in any Lender or any agent of any Lender or received or recovered by any Lender or any agent of any Lender pursuant to, or in connection with the Collateral Vessel Mortgages, whether from the Borrower or any Subsidiary Guarantor or any other Person and (iii) all money, investments, property and other assets at any time representing or deriving from any of the foregoing, including all interest, income and other sums at any time received or receivable by any Lender or any agent of any Lender in respect of the same (or any part thereof). Nordea hereby accepts such appointment as security trustee.

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10.02Nature of Duties. The Agents shall have no duties or responsibilities except those expressly set forth in this Agreement and the Security Documents. None of the Agents nor any of their respective officers, directors, agents, employees or affiliates shall be liable for any action taken or omitted by it or them hereunder or under any other Credit Document or in connection herewith or therewith, unless caused by such Person’s gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final and non–appealable decision (any such liability limited to the applicable Agent to whom such Person relates). The duties of each of the Agents shall be mechanical and administrative in nature; none of the Agents shall have by reason of this Agreement or any other Credit Document any fiduciary relationship in respect of any Lender or the holder of any Note; and nothing in this Agreement or any other Credit Document, expressed or implied, is intended to or shall be so construed as to impose upon any Agents any obligations in respect of this Agreement or any other Credit Document except as expressly set forth herein or therein.

(i)It is understood and agreed that the use of the term “agent” herein or in any other Credit Documents (or any other similar term) with reference to the Administrative Agent in such capacity is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

10.03Lack of Reliance on the Agents. Independently and without reliance upon the Agents, each Lender and the holder of each Note, to the extent it deems appropriate, has made and shall continue to make (i) its own independent investigation of the financial condition and affairs of the Borrower and its Subsidiaries in connection with the making and the continuance of the Loans and the taking or not taking of any action in connection herewith and (ii) its own appraisal of the creditworthiness of the Borrower and its Subsidiaries and, except as expressly provided in this Agreement, none of the Agents shall have any duty or responsibility, either initially or on a continuing basis, to provide any Lender or the holder of any Note with any credit or other information with respect thereto, whether coming into its possession before the making of the Loans or at any time or times thereafter. None of the Agents shall be responsible to any Lender or the holder of any Note for any recitals, statements, information, representations or warranties herein or in any document, certificate or other writing delivered in connection herewith or for the execution, effectiveness, genuineness, validity, enforceability, perfection, collectability, priority or sufficiency of this Agreement or any other Credit Document or the financial condition of the Borrower and its Subsidiaries or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement or any other Credit Document, or the financial condition of the Borrower and its Subsidiaries or the existence or possible existence of any Default or Event of Default.

10.04Certain Rights of the Agents. If any of the Agents shall request instructions from the Required Lenders with respect to any act or action (including failure to act) in connection with this Agreement or any other Credit Document, the Agents shall be entitled to refrain from such act or taking such action unless and until the Agents shall have received instructions from the Required Lenders; and the Agents shall not incur liability to any Person by reason of so refraining.

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Without limiting the foregoing, no Lender or the holder of any Note shall have any right of action whatsoever against the Agents as a result of any of the Agents acting or refraining from acting hereunder or under any other Credit Document in accordance with the instructions of the Required Lenders.

10.05Reliance. Each of the Agents shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate, email, telex, teletype or telecopier message, cablegram, radiogram, order or other document or telephone message signed, sent or made by any Person that the applicable Agent reasonably believed to be the proper Person, and, with respect to all legal matters pertaining to this Agreement and any other Credit Document and its duties hereunder and thereunder, upon advice of counsel selected by the Administrative Agent.

10.06Indemnification. To the extent any of the Agents is not reimbursed and indemnified by the Borrower, the Lenders will reimburse and indemnify the applicable Agents, in proportion to their respective “percentages” as used in determining the Required Lenders (without regard to the existence of any Defaulting Lenders), for and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, costs, expenses or disbursements of whatsoever kind or nature which may be imposed on, asserted against or incurred by such Agents in performing their respective duties hereunder or under any other Credit Document, in any way relating to or arising out of this Agreement or any other Credit Document (including, without limitation, as a result of a breach of any Sanctions Laws by a Credit Party); provided that no Lender shall be liable in respect to an Agent for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Agent’s gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision). The indemnities contained in this Section 10.06 shall cover any cost, loss or liability incurred by each Indemnified Party in any jurisdiction arising or asserted under or in connection with any law relating to safety at sea, the ISM Code, ISPS Code or any Environmental Law.

10.07The Administrative Agent in its Individual Capacity. With respect to its obligation to make Loans under this Agreement, each of the Agents shall have the rights and powers specified herein for a “Lender” and may exercise the same rights and powers as though it were not performing the duties specified herein; and the term “Lenders,” “Secured Creditors”, “Required Lenders”, “holders of Notes” or any similar terms shall, unless the context clearly otherwise indicates, include each of the Agents in their respective individual capacity. Each of the Agents may accept deposits from, lend money to, and generally engage in any kind of banking, trust or other business with any Credit Party or any Affiliate of any Credit Party as if it were not performing the duties specified herein, and may accept fees and other consideration from the Borrower or any other Credit Party for services in connection with this Agreement and otherwise without having to account for the same to the Lenders.

10.08Holders. The Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes hereof unless and until a written notice of the assignment, transfer or endorsement thereof, as the case may be, shall have been filed with the Administrative

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Agent. Any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is the holder of any Note shall be conclusive and binding on any subsequent holder, transferee, assignee or endorsee, as the case may be, of such Note or of any Note or Notes issued in exchange therefor.

10.09Resignation by the Administrative Agent.

(b) The Administrative Agent may resign from the performance of all its functions and duties hereunder and/or under the other Credit Documents at any time by giving 30 Business Days’ prior written notice to the Borrower and the Lenders. Such resignation shall take effect upon the appointment of a successor Administrative Agent pursuant to clauses (b) and (c) below or as otherwise provided below.

(c)Upon a notice of resignation delivered by the Administrative Agent pursuant to Section 10.09(a), the Required Lenders shall appoint a successor Administrative Agent hereunder or thereunder who shall be a commercial bank or trust company reasonably acceptable to the Borrower.

(d)If, following the Administrative Agent delivering a notice of resignation pursuant to Section 10.09(a), a successor Administrative Agent shall not have been so appointed within such 30 Business Day period, the Administrative Agent, with the consent of the Borrower (which shall not be unreasonably withheld or delayed), shall then appoint a commercial bank or trust company with capital and surplus of not less than $500,000,000 as successor Administrative Agent who shall serve as Administrative Agent hereunder or thereunder until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided above.

(e)If no successor Administrative Agent has been appointed pursuant to clause (b) or (c) above by the 25th Business Day after the date such notice of resignation was given by the Administrative Agent, the Administrative Agent’s resignation shall become effective and the Required Lenders shall thereafter perform all the duties of the Administrative Agent hereunder and/or under any other Credit Document until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided above.

(f)The Administrative Agent may resign from the performance of all its functions and duties hereunder and/or under the other Credit Documents at any time and may appoint one of its Affiliates, including, without limitation, Nordea Bank AB (publ), London Branch, as a successor by giving 5 Business Days’ prior written notice to the Borrower and the Lenders. The Administrative Agent shall bear all reasonable documentation costs incurred in connection with the Administrative Agent’s resignation under this clause (e).

10.10Collateral Matters.   Each Lender authorizes and directs the Collateral Agent to enter into the Security Documents for the benefit of the Lenders and the other Secured Creditors. Each Lender hereby agrees, and each holder of any Note by the acceptance thereof will be deemed to agree, that, except as otherwise set forth herein, any action taken by the Required Lenders in accordance with the provisions of this Agreement or the Security Documents, and the exercise by the Required Lenders of the powers set forth herein or therein, together with such other powers as

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are reasonably incidental thereto, shall be authorized and binding upon all of the Lenders. The Collateral Agent is hereby authorized on behalf of all of the Lenders, without the necessity of any notice to or further consent from any Lender, from time to time prior to, or during, an Event of Default, to take any action with respect to any Collateral or Security Documents which may be necessary to perfect and maintain perfected the security interest in and Liens upon the Collateral granted pursuant to the Security Documents.

(c)The Lenders hereby authorize the Collateral Agent, at its option and in its discretion, to release any Lien on any property granted to or held by the Collateral Agent under any Credit Document (i) upon termination of all Commitments and payment and satisfaction in full of the Obligations (other than contingent indemnification obligations) at any time arising under or in respect of this Agreement or the Credit Documents or the transactions contemplated hereby or thereby, (ii) that is sold or otherwise disposed of (to Persons other than the Borrower and its Subsidiaries) upon the sale or other disposition thereof in compliance with Section 8.02, (iii) in connection with any Flag Jurisdiction Transfer, provided that the requirements thereof are satisfied by the relevant Credit Party, and (iv) if approved, authorized or ratified in writing by the Required Lenders (or all of the Lenders hereunder, to the extent required by Section 11.13) or (v) as otherwise may be expressly provided in the relevant Security Documents. Upon request by the Administrative Agent at any time, the Lenders will confirm in writing the Collateral Agent’s authority to release its interest in particular types or items of Collateral pursuant to this Section 10.10.

(d)The Collateral Agent shall have no obligation whatsoever to the Lenders or to any other Person to assure that the Collateral exists or is owned by any Credit Party or is cared for, protected or insured or that the Liens granted to the Collateral Agent herein or pursuant hereto have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to exercise or to continue exercising at all or in any manner or under any duty of care, disclosure or fidelity any of the rights, authorities and powers granted or available to the Collateral Agent in this Section 10.10 or in any of the Security Documents, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, the Collateral Agent shall have no duty or liability whatsoever to the Lenders, except for its gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).

(e)(i) The Other Creditors shall not have any right whatsoever to do any of the following: (A) exercise any rights or remedies with respect to the Collateral or to direct any Agent to do the same, including, without limitation, the right to (1) enforce any Liens or sell or otherwise foreclose on any portion of the Collateral, (2) request any action, institute any proceedings, exercise any voting rights, give any instructions, make any election or make collections with respect to all or any portion of the Collateral or (3) release any Credit Party under any Credit Document or release any Collateral from the Liens of any Security Document or consent to or otherwise approve any such release; (B) demand, accept or obtain any Lien on any Collateral (except for Liens arising under, and subject to the terms of, the Credit Documents); (C) vote in any case concerning any Credit Party under the Bankruptcy Code or any other proceeding under any reorganization, arrangement, adjudication of debt, relief of debtors, dissolution, insolvency, liquidation or similar proceeding in respect of the Credit Parties or any of their respective Subsidiaries (any such

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proceeding, for purposes of this clause (d)(i), a “Bankruptcy Proceeding”) with respect to, or take any other actions concerning the Collateral; (D) receive any proceeds from any sale, transfer or other disposition of any of the Collateral (except in accordance with this Agreement); (E) oppose any sale, transfer or other disposition of the Collateral; (F) object to any debtor-in-possession financing in any Bankruptcy Proceeding which is provided by one or more Lenders among others (including on a priming basis under Section 364(d) of the Bankruptcy Code); (G) object to the use of cash collateral in respect of the Collateral in any Bankruptcy Proceeding; or (H) seek, or object to the Lenders or any Agent seeking on an equal and ratable basis, any adequate protection or relief from the automatic stay with respect to the Collateral in any Bankruptcy Proceeding.

(ii)    Each Other Creditor, by its acceptance of the benefits of this Agreement and the other Credit Documents, agrees that in exercising rights and remedies with respect to the Collateral, the Agents and the Lenders, with the consent of the Agents, may enforce the provisions of the Credit Documents and exercise remedies thereunder (or refrain from enforcing rights and exercising remedies), all in such order and in such manner as they may determine in the exercise of their sole business judgment. Such exercise and enforcement shall include, without limitation, the rights to collect, sell, dispose of or otherwise realize upon all or any part of the Collateral, to incur expenses in connection with such collection, sale, disposition or other realization and to exercise all the rights and remedies of a secured lender under the UCC. The Other Creditors by their acceptance of the benefits of this Agreement and the other Credit Documents hereby agree not to contest or otherwise challenge any such collection, sale, disposition or other realization of or upon all or any of the Collateral. Whether or not a Bankruptcy Proceeding has been commenced, the Other Creditors shall be deemed to have consented to any sale or other disposition of any property, business or assets of the Credit Parties and the release of any or all of the Collateral from the Liens of any Security Document in connection therewith.

(iii) To the maximum extent permitted by law, each Other Creditor waives any claim it might have against the Agents or the Lenders with respect to, or arising out of, any action or failure to act or any error of judgment, negligence, or mistake or oversight whatsoever on the part of any Agent or the Lenders or their respective directors, officers, employees or agents with respect to any exercise of rights or remedies under the Credit Documents or any transaction relating to the Collateral (including, without limitation, any such exercise described in Section 10(d)(ii)), except for any such action or failure to act that constitutes willful misconduct or gross negligence of such Person. To the maximum extent permitted by applicable law, none of either Agent or any Lender or any of their respective directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of Parent, any Subsidiary of Parent, any Other Creditor or any other Person or to take any other action or forbear from doing so whatsoever with regard to the Collateral or any part thereof, except for any such action or failure to act that constitutes willful misconduct or gross negligence of such Person.

10.11Delivery of Information. The Agents shall not be required to deliver to any Lender originals or copies of any documents, instruments, notices, communications or other

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information received by the Agents from any Credit Party, any Subsidiary, the Required Lenders, any Lender or any other Person under or in connection with this Agreement or any other Credit Document except (i) as specifically provided in this Agreement or any other Credit Document and (ii) as specifically requested from time to time in writing by any Lender with respect to a specific document, instrument, notice or other written communication received by and in the possession of any Agent at the time of receipt of such request and then only in accordance with such specific request.

SECTION 11.Miscellaneous.

11.01Payment of Expenses, etc.(a) The Borrower agrees that it shall  (i) pay all reasonable and documented out-of-pocket costs and expenses of each of the Agents and their Affiliates (which shall be limited, in the case of legal fees, to the reasonable and documented fees and disbursements of one legal counsel to the Administrative Agent and the Lead Arrangers, local counsel and maritime counsel (as necessary) to the Administrative Agent) in connection with the syndication of the Credit Facilities, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Credit Documents and the documents and instruments referred to herein and therein and any amendment, waiver or consent relating hereto or thereto (whether or not the transactions herein contemplated are consummated), and (ii) pay all reasonable and documented out-of-pocket fees, costs and expenses of each of the Agents and the Lenders (including, without limitation, the reasonable fees and disbursements of counsel (excluding in‑house counsel) for each of the Agents and for each of the Lenders) in connection with the enforcement or protection of its rights (A) in connection this Agreement and the other Credit Documents and the documents and instruments referred to herein and therein and (B) in connection with the Loans made hereunder, including such expenses incurred during any workout, restructuring or negotiations in respect of such Loans.

(b)    In addition, the Borrower shall indemnify the Agents and each Lender, and each of their respective officers, directors, trustees, employees, representatives and agents (collectively, the “Indemnified Parties”) from, and hold each of them harmless against, any and all liabilities, obligations (including removal or remedial actions), losses, damages, penalties, claims, actions, judgments, civil penalties, fines, settlements, suits and out-of-pocket costs, expenses and disbursements (including reasonable and documented out-of-pocket attorneys’ and consultants’ fees and disbursements) incurred by, imposed on or assessed against any of them as a result of, or arising out of, or in any way related to, or by reason of:

(i)    any investigation, litigation or other proceeding (whether or not any of the Agents, the Collateral Agent or any Lender is a party thereto) related to the entering into and/or performance of this Agreement or any other Credit Document or the use of proceeds of the Loans hereunder or the consummation of any transactions contemplated herein, or in any other Credit Document or the exercise of any of their rights or remedies provided herein or in the other Credit Documents,

(ii)    the actual or alleged presence of Hazardous Materials on or from any Collateral Vessel or real property or facility at any time owned or operated by the Borrower or any Subsidiary,

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(iii) the generation, storage, transportation, handling, disposal or Environmental Release of Hazardous Materials at any location, whether or not owned or operated by the Borrower,

(iv) the non-compliance of any Collateral Vessel or any real property or facility at any time owned or operated by the Borrower or any Subsidiary with Environmental Law or applicable foreign, federal, state and local laws, regulations, and ordinances (including applicable permits thereunder),

(v) any Environmental Claim asserted against the Borrower, any Subsidiary or any Collateral Vessel or any real property or facility at any time owned or operated by the Borrower or any Subsidiary Guarantor, or

(vi) the conduct of any Credit Party or any of its partners, directors, officers, employees, agents or advisors, that violates any Sanctions Laws,

in each case excluding any losses, liabilities, claims, damages, penalties, actions, judgments, suits, costs, disbursements or expenses to the extent incurred by reason of the gross negligence of, the breach in bad faith of the Credit Documents by, or wilful misconduct of, any such Indemnified Party or by reason of a failure by any such Indemnified Party to fund its Commitments as required by this Agreement. To the extent that the undertaking to indemnify, pay or hold harmless each of the Agents or any Lender set forth in the preceding sentence may be unenforceable because it violates any law or public policy, the Borrower shall make the maximum contribution to the payment and satisfaction of each of the indemnified liabilities which is permissible under applicable law. Notwithstanding the foregoing, no party hereto shall be responsible to any Person for any consequential, indirect, special or punitive damages which may be alleged by such Person arising out of this Agreement or the other Credit Documents.

11.02Right of Setoff. In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, upon the occurrence and during the continuance of an Event of Default, each Lender is hereby authorized at any time or from time to time, without presentment, demand, protest or other notice of any kind to any Subsidiary or the Borrower or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other Financial Indebtedness at any time held or owing by such Lender (including, without limitation, by branches and agencies of such Lender wherever located) to or for the credit or the account of the Borrower or any Subsidiary but in any event excluding assets held in trust for any such Person against and on account of the Obligations and liabilities of the Borrower or such Subsidiary, as applicable, to such Lender under this Agreement or under any of the other Credit Documents, including, without limitation, all interests in Obligations purchased by such Lender pursuant to Section 11.06(b), and all other claims of any nature or description arising out of or connected with this Agreement or any other Credit Document, irrespective of whether or not such Lender shall have made any demand hereunder and although said Obligations, liabilities or claims, or any of them, shall be contingent or unmatured.

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11.03Notices. Except as otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including telegraphic, telecopier or e-mail communication) and mailed, e-mailed, telecopied or delivered: if to the Borrower, at the Borrower’s address specified on Schedule VII hereto; if to any Lender, at its address specified opposite its name on Schedule II hereto; and if to the Administrative Agent, at its Notice Office; or, as to any other Credit Party, at such other address as shall be designated by such party in a written notice to the other parties hereto and, as to each Lender, at such other address as shall be designated by such Lender in a written notice to the Borrower and the Administrative Agent. All such notices and communications shall, (i) when mailed, be effective three Business Days after being deposited in the mails, prepaid and properly addressed for delivery, (ii) when sent by overnight courier, be effective one Business Day after delivery to the overnight courier prepaid and properly addressed for delivery on such next Business Day, or (iii) when sent by telecopier or e-mail, be effective when sent by telecopier or e-mail, except that notices and communications to the Administrative Agent shall not be effective until received by the Administrative Agent.

11.04Benefit of Agreement; Assignments; Participations. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto; provided, however, that (i) no Credit Party may assign or transfer any of its rights, obligations or interest hereunder or under any other Credit Document without the prior written consent of the Lenders, (ii) although any Lender may grant participations in its rights hereunder, such Lender shall remain a “Lender” for all purposes hereunder (and may not transfer or assign all or any portion of its Commitments hereunder except as provided in Section 11.04(b)) and no participant shall constitute a “Lender” hereunder and (iii) no Lender shall transfer or grant any participation under which the participant shall have rights to approve any amendment to or waiver of this Agreement or any other Credit Document except to the extent such amendment or waiver would (x) extend the final scheduled maturity of any Loan or Note in which such participant is participating, or reduce the rate or extend the time of payment of interest or Commitment Commission thereon (except (I) in connection with a waiver of applicability of any post-default increase in interest rates and (II) that any amendment or modification to the financial definitions in this Agreement shall not constitute a reduction in the rate of interest for purposes of this clause (x)) or reduce the principal amount thereof, or increase the amount of the participant’s participation over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default or of a mandatory reduction in the Total Commitments shall not constitute a change in the terms of such participation, and that an increase in any Commitment or Loan shall be permitted without the consent of any participant if the participant’s participation is not increased as a result thereof), (y) consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement or (z) release all or substantially all of the Collateral under all of the Security Documents (except as expressly provided in the Credit Documents) securing the Loans hereunder in which such participant is participating. In the case of any such participation, the participant shall not have any rights under this Agreement or any of the other Credit Documents (the participant’s rights against such Lender in respect of such participation to be those set forth in the agreement executed by such Lender in favor of the participant relating thereto) and all amounts payable by the Borrower hereunder shall be determined as if such Lender had not sold such participation. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each participant and the principal

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amounts (and stated interest) of each participant’s interest in the Loan or other obligations under the Note (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participant’s interest in any commitments, loans or its other obligations under any Note) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(j)Notwithstanding the foregoing, any Lender (or any Lender together with one or more other Lenders) may:

(x)    assign all or a portion of its Commitment and/or its outstanding Loans to its (i) parent company and/or any Affiliate of such Lender or its parent company or (ii) in the case of any Lender that is a fund that invests in bank loans, any other fund that invests in bank loans and is managed or advised by the same investment advisor of such Lender or by an Affiliate of such investment advisor or (iii) to one or more Lenders or

(y)    assign, with the consent of the Borrower and the Administrative Agent (in each case which consent shall not be unreasonably withheld or delayed and in the case of the Borrower, (i) shall not be required if any Default under Section 9.01 or 9.05 or any Event of Default is then in existence and (ii) shall be deemed to have been granted within 15 Business Days from the day it has been sought unless expressly refused within that period), all, or if less than all, a portion equal to at least $20,000,000 in the aggregate for the assigning Lender or assigning Lenders, of such Commitments and outstanding principal amount of Loans hereunder to one or more Eligible Transferees (treating any fund that invests in bank loans and any other fund that invests in bank loans and is managed or advised by the same investment advisor of such fund or by an Affiliate of such investment advisor as a single Eligible Transferee), each of which assignees shall become a party to this Agreement as a Lender by execution of an Assignment and Assumption Agreement,

provided that (i) at such time Schedule I hereto shall be deemed modified to reflect the Commitments (and/or outstanding Loans, as the case may be) of such new Lender and of the existing Lenders, (ii) new Notes will be issued, at the Borrower’s expense, to such new Lender and to the assigning Lender upon the request of such new Lender or assigning Lender, such new Notes to be in conformity with the requirements of Section 2.05 (with appropriate modifications) to the extent needed to reflect the revised Commitments (and/or outstanding Loans, as the case may be), (iii) the consent of the Administrative Agent shall be required in connection with any assignment pursuant to preceding clause (y) (which consent shall not be unreasonably withheld or delayed), and (iv) the Administrative Agent shall receive at the time of each such assignment, from the assigning or assignee Lender, the payment of a non-refundable assignment fee of $3,500. To the extent of any assignment pursuant

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to this Section 11.04(b), the assigning Lender shall be relieved of its obligations hereunder with respect to its assigned Commitments (it being understood that the indemnification provisions under this Agreement (including, without limitation, Sections 2.09, 2.10, 4.04, 11.01, 11.17 and 11.18) shall survive as to such assigning Lender with respect to matters occurring prior to the date such assigning Lender ceases to be a Lender). To the extent that an assignment of all or any portion of a Lender’s Commitments and related outstanding Obligations pursuant to Section 2.12 or this Section 11.04(b) would, at the time of such assignment, result in increased costs under Section 2.09, 2.10 or 4.04 from those being charged by the respective assigning Lender prior to such assignment, then the Borrower shall not be obligated to pay such increased costs (although the Borrower shall be obligated to pay any other increased costs of the type described above resulting from any Change in Law after the date of the respective assignment).

(k)Nothing in this Agreement shall prevent or prohibit any Lender from pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of borrowings made by such Lender from such Federal Reserve Bank and, with the consent of the Administrative Agent, any Lender which is a fund may pledge all or any portion of its Notes or Loans to a trustee for the benefit of investors and in support of its obligation to such investors; provided, however, no such pledge shall release a Lender from any of its obligations hereunder or substitute any such pledgee for such Lender as a party hereto.

11.05No Waiver; Remedies Cumulative. No failure or delay on the part of the Administrative Agent or any Lender or any holder of any Note in exercising any right, power or privilege hereunder or under any other Credit Document and no course of dealing between the Borrower or any other Credit Party and the Administrative Agent or any Lender or the holder of any Note shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights, powers and remedies herein or in any other Credit Document expressly provided are cumulative and not exclusive of any rights, powers or remedies which the Administrative Agent or any Lender or the holder of any Note would otherwise have. No notice to or demand on any Credit Party in any case shall entitle any Credit Party to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Administrative Agent or any Lender or the holder of any Note to any other or further action in any circumstances without notice or demand.

11.06Payments Pro Rata. Except as otherwise provided in this Agreement, the Administrative Agent agrees that promptly after its receipt of each payment from or on behalf of the Borrower in respect of any Obligations hereunder, it shall distribute such payment to the Lenders (other than any Lender that has consented in writing to waive its prorata share of any such payment) prorata based upon their respective shares, if any, of the Obligations with respect to which such payment was received.

(e)Each of the Lenders agrees that, if it should receive any amount hereunder (whether by voluntary payment, by realization upon security, by the exercise of the right of setoff or banker’s lien, by counterclaim or cross action, by the enforcement of any right under the Credit

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Documents, or otherwise), which is applicable to the payment of the principal of, or interest on, the Loans or Commitment Commission, of a sum which with respect to the related sum or sums received by other Lenders is in a greater proportion than the total of such Obligation then owed and due to such Lender bears to the total of such Obligation then owed and due to all of the Lenders immediately prior to such receipt, then such Lender receiving such excess payment shall purchase for cash without recourse or warranty from the other Lenders an interest in the Obligations of the respective Credit Party to such Lenders in such amount as shall result in a proportional participation by all the Lenders in such amount; provided that if all or any portion of such excess amount is thereafter recovered from such Lender, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.

(f)Notwithstanding anything to the contrary contained herein, the provisions of the preceding Sections 11.06(a) and (b) shall be subject to the express provisions of this Agreement which require, or permit, differing payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders.

11.07Calculations; Computations. The financial statements to be furnished to the Lenders pursuant hereto shall be made and prepared in accordance with generally accepted accounting principles in the United States consistently applied throughout the periods involved (except as set forth in the notes thereto or as otherwise disclosed in writing by the Borrower to the Lenders). In addition, all computations determining compliance with the Financial Covenants shall utilize accounting principles and policies in conformity with those in effect on the Closing Date (with the foregoing generally accepted accounting principles, subject to the preceding proviso, herein called “GAAP”), subject, in the case of the unaudited financial statements, to normal year-end audit adjustments and the absence of footnotes. Unless otherwise noted, all references in this Agreement to “GAAP” shall mean generally accepted accounting principles as in effect in the United States.

(f)All computations of interest for Loans, Commitment Commission and other Fees hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest, Commitment Commission or Fees are payable.

11.08Agreement Binding. The Borrower and each other Credit Party agree that they shall be bound by the terms of this Agreement and the obligations and covenants expressed to be binding on each of them under this Agreement even if the terms, covenants or obligations contained hereunder are inconsistent with, or less favorable to the Borrower or such Credit Party (as the case may be) than the Borrower’s or such Credit Party’s rights and obligations under any other document that they are a party to or are otherwise bound by, including without limitation, the Management Agreement, notwithstanding that the Lender Creditors are aware of or have been provided with such other document pursuant to this Agreement or otherwise.

11.09GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE PROVIDED IN

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CERTAIN OF THE COLLATERAL VESSEL MORTGAGES AND OTHER SECURITY DOCUMENTS, BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY IN THE CITY OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH OF THE PARTIES TO THIS AGREEMENT FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS SET FORTH ON SCHEDULE VII HERETO, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT UNDER THIS AGREEMENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER JURISDICTION. THE BORROWER HEREBY IRREVOCABLY DESIGNATES, APPOINTS, AUTHORIZES AND EMPOWERS SEWARD & KISSEL LLP, WITH OFFICES CURRENTLY LOCATED AT ONE BATTERY PARK PLAZA, NEW YORK, NEW YORK 10004, ATTENTION: MICHAEL TIMPONE, AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE AND ACCEPT FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, THE BORROWER AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK, NEW YORK ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE ADMINISTRATIVE AGENT; PROVIDED THAT ANY FAILURE ON THE PART OF THE BORROWER TO COMPLY WITH THE FOREGOING PROVISIONS OF THIS SENTENCE SHALL NOT IN ANY WAY PREJUDICE OR LIMIT THE SERVICE OF PROCESS OR SUMMONS IN ANY OTHER MANNER DESCRIBED ABOVE IN THIS SECTION 11.09 OR OTHERWISE PERMITTED BY LAW.

(f)EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION

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OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(g)EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

11.10Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original (including if delivered by e-mail or facsimile transmission), but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with the Borrower and the Administrative Agent.

11.11Effectiveness. This Agreement shall become effective on the date (the “Closing Date”) on which the conditions set forth in Section 5.01 shall have been satisfied or waived by the Administrative Agent.

11.12Headings Descriptive. The headings of the several sections and subsections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.

11.13Amendment or Waiver; etc. Neither this Agreement nor any other Credit Document nor any terms hereof or thereof may be changed, waived, discharged or terminated unless such change, waiver, discharge or termination is in writing signed by the respective Credit Parties party thereto and the Required Lenders, provided that no such change, waiver, discharge or termination shall, without the consent of each Lender (other than a Defaulting Lender) directly and negatively affected,

(i)extend the final scheduled maturity of any Loan or Note, extend the timing for or reduce the principal amount of any Scheduled Term Amortization Payment Amounts and/or Scheduled Revolving Commitment Reduction Amounts (or any definition used therein to the extent used therein), or reduce the rate or reduce or extend the time of payment of interest on any Loan or Note or Commitment Commission (except (x) in connection with the waiver of applicability of any post-default increase in interest rates and (y) any amendment or modification to the financial definitions in this Agreement shall not constitute a reduction in the rate of interest for purposes of this clause (i)), or reduce the principal amount thereof (except to the extent repaid in cash),

(ii)release any of the Collateral (except as expressly provided in the Credit Documents),

(iii)amend, modify or waive any provision of this Section 11.13 or of any other Section that expressly requires the consent of all the Lenders to do so,

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(iv)reduce the percentage specified in the definition of Required Lenders (it being understood that, with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of the Required Lenders on substantially the same basis as the extensions of Loans and Commitments are included on the Closing Date),

(v)consent to the assignment or transfer by the Borrower or any Subsidiary Guarantor of any of its respective rights and obligations under this Agreement,

(vi)substitute or replace the Borrower or any Subsidiary Guarantor or release any Subsidiary Guarantor from the Subsidiaries Guaranty, and

(vii)amend, modify or waive Section 2.06;

provided, further, that no such change, waiver, discharge or termination shall (A) increase or extend the Commitments of any Lender over the amount thereof then in effect without the consent of such Lender (it being understood that waivers or modifications of Section 2.01(b), conditions precedent, covenants, Defaults or Events of Default or of a mandatory reduction in the Commitments shall not constitute an increase of the Commitment of any Lender, and that an increase in the available portion of any Commitment of any Lender shall not constitute an increase in the Commitment of such Lender), (B) without the consent of each Agent, amend, modify or waive any provision of Section 10 as same applies to such Agent or any other provision as same relates to the rights or obligations of such Agent or (C) without the consent of the Collateral Agent, amend, modify or waive any provision relating to the rights or obligations of the Collateral Agent.

(i)If, in connection with any proposed change, waiver, discharge or termination to any of the provisions of this Agreement as contemplated by clauses (i) through (vi), inclusive, of the first proviso to Section 11.13(a), the consent of the Required Lenders is obtained but the consent of one or more of such other Lenders whose consent is required (any such Lender, a “Non-Consenting Lender”) is not obtained, then the Borrower shall have the right, so long as all Non-Consenting Lenders whose individual consent is required are treated as described in either clauses (i) or (ii) below, to either (i) replace each such Non-Consenting Lender (or, at the option of the Borrower if the respective Non-Consenting Lender’s consent is required with respect to less than all Loans (or related Commitments) of such Non-Consenting Lender, to replace only the respective Commitments and/or Loans of the respective Non-Consenting Lender which gave rise to the need to obtain such Non-Consenting Lender’s individual consent) with one or more Replacement Lenders pursuant to Section 2.11 so long as at the time of such replacement, each such Replacement Lender consents to the proposed change, waiver, discharge or termination or (ii) terminate such Non-Consenting Lender’s Commitment (if such Non-Consenting Lender’s consent is required as a result of its Commitment), and/or repay the outstanding Loans and terminate any outstanding Commitments of such Non-Consenting Lender which gave rise to the need to obtain such Non-Consenting Lender’s consent, in accordance with Sections 3.02(b) and/or 4.01(a), provided that, unless the Commitments that are terminated and/or the Loans that are repaid pursuant to preceding clause (ii) are immediately replaced in full at such time through the addition of new Lenders or the increase of the Commitments and/or the outstanding Loans of existing Lenders (who in each case must specifically consent thereto), then in the case of any action pursuant to preceding clause (ii)

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the Required Lenders (determined before giving effect to the proposed action) shall specifically consent thereto, provided, further, that in any event the Borrower shall not have the right to replace a Lender, terminate such Lender’s Commitment or repay such Lender’s Loan solely as a result of the exercise of such Lender’s rights (and the withholding of any required consent by such Lender) pursuant to the second proviso to Section 11.13(a).

(j)The Administrative Agent and the Borrower may amend any Credit Document to correct administrative errors or omissions, or to effect administrative changes that are not adverse to any Lender. Notwithstanding anything to the contrary contained herein, such amendment shall become effective without any further consent of any other party to such Credit Document.

11.14Survival. All indemnities set forth herein including, without limitation, in Sections 2.09, 2.10, 4.04, 11.01, 11.17 and 11.18 shall survive the execution, delivery and termination of this Agreement and the Notes and the making and repayment of the Loans.

11.15Domicile of Loans. Each Lender may transfer and carry its pro rata portion of the Loans at, to or for the account of any office, Subsidiary or Affiliate of such Lender. Notwithstanding anything to the contrary contained herein, to the extent that a transfer of Loans pursuant to this Section 11.15 would, at the time of such transfer, result in increased costs under Section 2.09, 2.10 or 4.04 from those being charged by the respective Lender prior to such transfer, then the Borrower shall not be obligated to pay such increased costs (although the Borrower shall be obligated to pay any other increased costs of the type described above resulting from changes after the date of the respective transfer).

11.16Confidentiality. Subject to the provisions of clause (b) of this Section 11.16, each Lender agrees that it will not disclose without the prior consent of the Borrower (other than to its employees, auditors, advisors or counsel or to another Lender if the Lender or such Lender’s holding or parent company or board of trustees in its sole discretion determines that any such party should have access to such information, provided such Persons shall be subject to the provisions of this Section 11.16 to the same extent as such Lender) any information with respect to the Borrower or any of its Subsidiaries which is now or in the future furnished pursuant to this Agreement or any other Credit Document, provided that any Lender may disclose any such information (i) as has become generally available to the public other than by virtue of a breach of this Section 11.16(a) by the respective Lender, (ii) as may be required in any report, statement or testimony submitted to any municipal, state or Federal regulatory body having or claiming to have jurisdiction over such Lender or to the Federal Reserve Board or the Federal Deposit Insurance Corporation or similar organizations (whether in the United States or elsewhere) or their successors, (iii) as may be required in respect to any summons or subpoena or in connection with any litigation, (iv) in order to comply with any law, order, regulation or ruling applicable to such Lender, (v) to the Administrative Agent or the Collateral Agent, (vi) to any auditor or professional financial or legal advisor of such Lender employed in the normal course of its business, (vii) to any branch, Affiliate or Subsidiary of such Lender or to the parent company, head office or regional office of such Lender in connection with the transactions contemplated herein and (viii) to any prospective or actual transferee or participant in connection with any contemplated transfer or participation of any of the Notes or Commitments

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or any interest therein by such Lender (it being understood that for the purpose of this clause (viii), other than during the continuance of an Event of Default, the Lender shall use commercially reasonable efforts to apprise the Borrower of the potential transferee), provided that such prospective transferee expressly agrees to execute and does execute (including by way of customary “click through” arrangements) a confidentiality agreement and be bound by the confidentiality provisions contained in this Section 11.16.

(a)The Borrower hereby acknowledges and agrees that each Lender may share with any of its affiliates any information related to the Borrower or any of its Subsidiaries (including, without limitation, any nonpublic customer information regarding the creditworthiness of the Borrower or its Subsidiaries), provided such Persons shall be subject to the provisions of this Section 11.16 to the same extent as such Lender.

11.17Register. The Borrower hereby designates the Administrative Agent to serve as the Borrower’s agent, solely for purposes of this Section 11.17, to maintain a register (the “Register”) on which it will record the Commitments from time to time of each of the Lenders, the Loans made by each of the Lenders and each repayment and prepayment in respect of the principal amount of the Loans of each Lender. Failure to make any such recordation, or any error in such recordation shall not affect the Borrower’s obligations in respect of such Loans. With respect to any Lender, the transfer of the Commitments of such Lender and the rights to the principal of, and interest on, any Loan made pursuant to such Commitments shall not be effective until such transfer is recorded on the Register maintained by the Administrative Agent with respect to ownership of such Commitments and Loans and prior to such recordation all amounts owing to the transferor with respect to such Commitments and Loans shall remain owing to the transferor. The registration of assignment or transfer of all or part of any Commitments and Loans shall be recorded by the Administrative Agent on the Register only upon the acceptance by the Administrative Agent of a properly executed and delivered Assignment and Assumption Agreement pursuant to Section 11.04(b). Coincident with the delivery of such an Assignment and Assumption Agreement to the Administrative Agent for acceptance and registration of assignment or transfer of all or part of a Loan, or as soon thereafter as practicable, the assigning or transferor Lender shall surrender the Note evidencing such Loan, and thereupon one or more new Notes in the same aggregate principal amount shall be issued to the assigning or transferor Lender and/or the new Lender. The Borrower agrees to indemnify the Administrative Agent from and against any and all losses, claims, damages and liabilities of whatsoever nature which may be imposed on, asserted against or incurred by the Administrative Agent in performing its duties under this Section 11.17, except to the extent caused by the Administrative Agent’s own gross negligence, willful misconduct or unlawful acts.

11.18Judgment Currency. If for the purposes of obtaining judgment in any court it is necessary to convert a sum due from the Borrower hereunder or under any of the Notes in the currency expressed to be payable herein or under the Notes (the “specified currency”) into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the specified currency with such other currency at the Administrative Agent’s New York office on the Business Day preceding that on which final judgment is given. The obligations of the Borrower in respect of any sum due to any Lender or the

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Administrative Agent hereunder or under any Note shall, notwithstanding any judgment in a currency other than the specified currency, be discharged only to the extent that on the Business Day following receipt by such Lender or the Administrative Agent (as the case may be) of any sum adjudged to be so due in such other currency, such Lender or the Administrative Agent (as the case may be) may in accordance with normal banking procedures purchase the specified currency with such other currency; if the amount of the specified currency so purchased is less than the sum originally due to such Lender or the Administrative Agent, as the case may be, in the specified currency, the Borrower agrees, to the fullest extent that it may effectively do so, as a separate obligation and notwithstanding any such judgment, to indemnify such Lender or the Administrative Agent, as the case may be, against such loss, and if the amount of the specified currency so purchased exceeds the sum originally due to any Lender or the Administrative Agent, as the case may be, in the specified currency, such Lender or the Administrative Agent, as the case may be, agrees to remit such excess to the Borrower.

11.19Language. All correspondence, including, without limitation, all notices, reports and/or certificates, delivered by any Credit Party to the Administrative Agent, the Collateral Agent or any Lender shall, unless otherwise agreed by the respective recipients thereof, be submitted in the English language or, to the extent the original of such document is not in the English language, such document shall be delivered with a certified English translation thereof.

11.20Waiver of Immunity. The Borrower, in respect of itself, each other Credit Party, its and their process agents, and its and their properties and revenues, hereby irrevocably agrees that, to the extent that the Borrower, any other Credit Party or any of its or their properties has or may hereafter acquire any right of immunity from any legal proceedings, whether in the United States, any Acceptable Flag Jurisdiction or elsewhere, to enforce or collect upon the Obligations of the Borrower or any other Credit Party related to or arising from the transactions contemplated by any of the Credit Documents, including, without limitation, immunity from service of process, immunity from jurisdiction or judgment of any court or tribunal, immunity from execution of a judgment, and immunity of any of its property from attachment prior to any entry of judgment, or from attachment in aid of execution upon a judgment, the Borrower, for itself and on behalf of the other Credit Parties, hereby expressly waives, to the fullest extent permissible under applicable law, any such immunity, and agrees not to assert any such right or claim in any such proceeding, whether in the United States, any Acceptable Flag Jurisdiction or elsewhere.

11.21USA PATRIOT Act Notice. Each Lender hereby notifies each Credit Party that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub.: 107-56 (signed into law October 26, 2001)) (the “PATRIOT Act”), it is required to obtain, verify, and record information that identifies each Credit Party, which information includes the name of each Credit Party and other “know your customer” information that will allow such Lender to identify each Credit Party in accordance with the PATRIOT Act and anti-money laundering rules and regulations, and each Credit Party agrees to provide such information from time to time to any Lender.

11.22Severability. If any provisions of this Agreement or the other Credit Documents is held to be illegal, invalid or unenforceable: (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Credit Documents shall not be affected

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or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions; provided that the Lenders shall charge no fee in connection with any such amendment. The invalidity of a provision in a particular jurisdiction shall not invalid or render unenforceable such provision in any other jurisdiction.

11.23Flag Jurisdiction Transfer. In the event that the Borrower desires to implement a Flag Jurisdiction Transfer with respect to a Collateral Vessel, upon receipt of reasonable advance notice thereof from the Borrower, the Collateral Agent shall use commercially reasonably efforts to provide, or (as necessary) procure the provision of, all such reasonable assistance as any Credit Party may request from time to time in relation to (i) the Flag Jurisdiction Transfer, (ii) the related deregistration of the relevant Collateral Vessel from its previous flag jurisdiction, and (iii) the release and discharge of the related Security Documents; provided that the relevant Credit Party shall pay all documented out of pocket costs and expenses reasonably incurred by the Collateral Agent in connection with provision of such assistance. Each Lender hereby consents in connection with any Flag Jurisdiction Transfer and subject to the satisfaction of the requirements thereof to be satisfied by the relevant Credit Party, to (x) deregister such Collateral Vessel from its previous flag jurisdiction and (y) release and hereby direct the Collateral Agent to release the relevant Collateral Vessel Mortgage. Each Lender hereby directs the Collateral Agent, and the Collateral Agent agrees to execute and deliver or, at the Borrower’s expense, file such documents and perform other actions reasonably necessary to release the relevant Collateral Vessel Mortgages when and as directed pursuant to this Section 11.23.

*     *     *

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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Agreement as of the date first above written.

SCORPIO BULKERS INC., as the Borrower

By: /s/ Hugh Baker    Name: Hugh BakerTitle: Chief Financial Officer

Signature page to Scorpio Bulkers Inc. Credit Agreement

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NORDEA BANK FINLAND PLC, NEW YORK BRANCH, individually, as Administrative Agent, Joint Bookrunner, Lead Arranger and Collateral Agent

By: /s/ Henning Lyche Christiansen Name: Henning Lyche Christiansen
Title: First Vice President

By: /s/ Gustaf Stael von Holstein Name: Gustav Stael von Holstein
Title: Head of Risk Management

Signature page to Scorpio Bulkers Inc. Credit Agreement

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MERCHANT BANKING, SKANDINAVISKA ENSKILDA BANKEN AB (PUBL), individually, as Joint Bookrunner and Lead Arranger

By: /s/ Mats Holmstrom Name: Mats Holmstrom
Title:

By: /s/ Olof Kajerdt Name: Olof Kajerdt
Title:

Signature page to Scorpio Bulkers Inc. Credit Agreement

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NORDEA BANK FINLAND PLC, NEW YORK BRANCH, as Lender

By: /s/ Henning Lyche Christiansen Name: Henning Lyche Christiansen
Title: First Vice President

By: /s/ Gustaf Stael von Holstein Name: Gustaf Stael von Holstein
Title: Head of Risk Management

Signature page to Scorpio Bulkers Inc. Credit Agreement

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SKANDINAVISKA ENSKILDA BANKEN AB (PUBL), as Lender

By:/s/ Mats Holmstrom __________________________________    Name:  Mats Holmstrom
    Title:

By:____/s/ Olof Kajerdt______________    Name:  Olof Kajerdt
    Title:

Signature page to Scorpio Bulkers Inc. Credit Agreement

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SCHEDULE I

COMMITMENTS

Lender	Term Loan Commitments	Revolving Loan Commitments
Nordea Bank Finland Plc, New York Branch	$138,055,423	$66,432,800.50
Skandinaviska Enskilda Banken AB (publ)	$138,055,423	$66,432,800.50
Total	$276,110,846	$132,865,601

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SCHEDULE II

LENDER ADDRESSES

INSTITUTIONS	ADDRESSES
NORDEA BANK FINLAND PLC, NEW YORK BRANCH	437 Madison Avenue, 21st Floor New York, NY 10022 Attn: Shipping, Offshore and Oil Services Telephone: +1 212-318-9634 Facsimile: +1 212-421-4420
SKANDINAVISKA ENSKILDA BANKEN AB (publ)	Kungsträdgårdsgatan 8 SE-106 40 Stockholm Sweden Attn: Johan Lindstrom Telephone: +46 8 763 97 58 Facsimile: +46 8 678 02 06

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SCHEDULE III

SUBSIDIARIES

NAME OF SUBSIDIARY	DIRECT OWNER	OWNERSHIP PERCENTAGE (DIRECT OR INDIRECT) BY BORROWER
SBI Achilles Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Alhambra Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Antares Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Apollo Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Aroma Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Athena Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Avanti Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Behike Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Belicoso Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Bolero Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Bravo Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Cakewalk Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Camacho Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Capoeira Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Carioca Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Charleston Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Chartering and Trading Limited	Scorpio Bulkers Inc.	100%
SBI Churchill Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Cohiba Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Conga Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Corona Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Cronos Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Cuaba Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Diadema Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Echo Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Electra Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Estupendo Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Flamenco Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Habano Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Hera Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Hercules Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Hermes Shipping Company Limited]	Scorpio Bulkers Inc.	100%
SBI Hydra Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Hyperion Shipping Company Limited	Scorpio Bulkers Inc.	100%

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Schedule III
Page 2

NAME OF SUBSIDIARY	DIRECT OWNER	OWNERSHIP PERCENTAGE (DIRECT OR INDIRECT) BY BORROWER
SBI Jive Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Kratos Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Lambada Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Leo Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Lonsdale Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Lyra Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Macanudo Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Macarena Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Maduro Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Magnum Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Maia Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Mazurka Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Merengue Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Montecristo Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Monterrey Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Montesino Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Orion Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Panatela Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Parapara Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Parejo Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Partagas Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Pegasus Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Perfecto Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Perseus Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Phoebe Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Phoenix Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Poseidon Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Presidente Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Puro Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Reggae Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Robusto Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Rock Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Rumba Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Salsa Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Samba Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Samson Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Sousta Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Subaru Shipping Company Limited	Scorpio Bulkers Inc.	100%

Americas 9311184 (2K)

Schedule III
Page 3

NAME OF SUBSIDIARY	DIRECT OWNER	OWNERSHIP PERCENTAGE (DIRECT OR INDIRECT) BY BORROWER
SBI Swing Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Tango Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Tethys Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Thalia Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Toro Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Tuscamina Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Twist Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Ursa Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Valrico Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Zeus Shipping Company Limited	Scorpio Bulkers Inc.	100%
SBI Zumba Shipping Company Limited	Scorpio Bulkers Inc.	100%
Scorpio SALT LLC	Scorpio Bulkers Inc.	100%
Bedford Shipping Limited	SBI Sousta Shipping Company limited	100%
Belgrave Shipping Limited	SBI Zumba Shipping Company Limited	100%
Caithness Shipping Limited	SBI Cakewalk Shipping Company Limited	100%
Cavendish Shipping Limited	SBI Cavendish Shipping Company Limited	100%
Fitzroy Shipping Limited	SBI Bolero Shipping Company Limited.	100%
Grosvenor Shipping Limited	-SBI Parapara Shipping Company Limited	100%
Skegness Shipping Limited	SBI Charleston Shipping Company Limited	100%
Sloane Shipping Limited	SBI Reggae Shipping Company Limited	100%
St. James's Shipping Limited	SBI Mazurka Shipping Company Limited	100%

Americas 9311184 (2K)

Exhibit - 4.27

SCHEDULE IV-A

REQUIRED INSURANCE

Insurance to be maintained on the Collateral Vessel:

(a)    The Borrower shall keep the Collateral Vessel insured with insurers and protection and indemnity clubs or associations of internationally recognized reputation, and placed in such markets, on such terms and conditions, and through brokers, reasonably satisfactory to the Collateral Agent (it being understood that AON and Marsh are satisfactory) and under forms of policies approved by the Collateral Agent against the risks indicated below and such other risks as the Collateral Agent may reasonably specify from time to time; however, in no case shall the Collateral Agent specify insurance in excess of the customary insurances purchased by first-class owners of comparable vessels:

(i)    Marine and war risk, including terrorism, confiscation, London Blocking and Trapping Addendum and Missing Collateral Vessel Clause, hull and machinery insurance, hull interest insurance and freight interest insurance, together in an amount in U.S. dollars at all times equal to or greater than the greater of (x) its fair market value and (y) 110% of the aggregate principal amount of Term Loans and Revolving Loan Commitments outstanding under the Credit Facilities. The insured value for hull and machinery required under this clause (i) for the Collateral Vessel shall at all times be in an amount equal to the greater of (x) eighty per cent (80%) of the Appraised Value of the Collateral Vessel and (y) the aggregate principal amount of all Term Loans and Revolving Loan Commitments outstanding under the Credit Facilities, and the remaining machine and war risk insurance required by this clause (i) may be taken out as hull and freight interest insurance.

(ii)    Marine and war risk protection and indemnity insurance or equivalent insurance (including coverage against liability for crew, fines and penalties arising out of the operation of the Collateral Vessel, insurance against liability arising out of pollution, spillage or leakage, and workmen’s compensation or longshoremen’s and harbor workers’ insurance as shall be required by applicable law) in such amounts approved by the Collateral Agent; provided,however, that insurance against liability under law or international convention arising out of pollution, spillage or leakage shall be in an amount not less than the greater of:

(y)    the maximum amount reasonably available from the International Group of Protection and Indemnity Associations (the “International Group”) or alternatively such sources of pollution, spillage or leakage coverage as are commercially available in any absence of such coverage by the International Group as shall be carried by prudent shipowners engaged in similar trades; and

Americas 9311184 (2K)

Schedule IV-A
Page 2

(z)    the amounts required by the laws or regulations of the United States of America or any applicable jurisdiction in which the Collateral Vessel may be trading from time to time.

(iii)    Mortgagee’s interest insurance on such conditions as the Collateral Agent may reasonably require and mortgagee’s interest insurance for pollution risks as from time to time agreed, satisfactory to the Collateral Agent and for an amount in U.S. dollars approved by the Collateral Agent but not being less than 110% of the sum of the aggregate principal amount of Term Loans and Revolving Loan Commitments outstanding pursuant to the Credit Agreement, the Borrower and the Collateral Vessel Owner having no interest or entitlement in respect of such policies; all such mortgagee’s interest insurance cover shall be obtained directly by the Collateral Agent and the Collateral Agent undertakes to use its best endeavors to match the premium level that the Borrower would have paid if they had arranged such cover on such conditions (as demonstrated by the reasonable satisfaction of the Collateral Agent), provided that in no event shall the Borrower be required to reimburse the Collateral Agent for any such costs in excess of the premium level then available to the Collateral Agent in the market.

(iv)    While the Collateral Vessel is idle or laid up, at the option of the Borrower and in lieu of the above-mentioned marine and war risk hull insurance, port risk insurance insuring the Collateral Vessel against the usual risks encountered by like vessels under similar circumstances.

(b)    The marine and commercial war-risk insurance required in this Schedule IV-A for the Collateral Vessel shall have deductibles and franchises in amounts reasonably satisfactory to the Collateral Agent.

All insurance maintained hereunder shall be primary insurance without right of contribution against any other insurance maintained by the Collateral Agent. The policy of marine and war risk hull and machinery insurance with respect to the Collateral Vessel shall, if so requested by the Collateral Agent, provide that the Collateral Agent shall be a named insured in its capacity as mortgagee and as loss payee. The entry in a marine and war risk protection indemnity club with respect to the Collateral Vessel shall note the interest of the Collateral Agent. The Administrative Agent, the Collateral Agent and each of their respective successors and assigns shall not be responsible for any premiums, club calls, assessments or any other obligations or for the representations and warranties made therein by the Borrower, any of the Borrower’s Subsidiaries or any other Person. In addition, the Borrower shall reimburse the Administrative Agent for the commercially reasonable cost of Mortgagees Interest Insurance and MAPP which the Administrative Agent will take out on the Collateral Vessel upon such terms and in such amounts as the Administrative Agent shall deem appropriate.

(c)    The Collateral Agent shall from time to time obtain a detailed report signed by a firm of marine insurance brokers acceptable to the Collateral Agent with respect to P & I entry,

Americas 9311184 (2K)

Schedule IV-A
Page 3

the hull and machinery and war risk insurance carried and maintained on the Collateral Vessel, together with their opinion as to the adequacy thereof and its compliance with the provisions of this Schedule IV. At the Borrower’s expense, the Borrower will instruct its insurance broker (which, for the avoidance of doubt shall be a different insurance broker from the firm of marine insurance brokers referred to in the immediately preceding sentence) and the P & I club or association providing P & I insurance referred to in part (a)(ii) of this Schedule IV, to agree to advise the Collateral Agent by electronic mail of any expiration, termination, alteration or cancellation of any policy, any default in the payment of any premium and of any other act or omission on the part of the Borrower of which the Borrower has knowledge and which might invalidate or render unenforceable, in whole or in part, any insurance on the Collateral Vessel, and to provide an opportunity of paying any such unpaid premium or call, such right being exercisable by the Collateral Agent on the Collateral Vessel on an individual and not on a fleet basis. In addition, the Borrower shall promptly provide the Collateral Agent with any information which the Collateral Agent reasonably requests for the purpose of obtaining or preparing any report from the Collateral Agent’s independent marine insurance consultant as to the adequacy of the insurances effected or proposed to be effected in accordance with this Schedule IV-A as of the date hereof or in connection with any renewal thereof, and the Borrower shall upon demand indemnify the Collateral Agent in respect of all reasonable fees and other expenses incurred by or for the account of the Collateral Agent in connection with any such report, provided that the Collateral Agent shall be entitled to such indemnity only for one such report during a period of twelve months.

The underwriters or brokers shall furnish the Collateral Agent with a letter or letters of undertaking to the effect that:

(i)they will hold the instruments of insurance, and the benefit of the insurances thereunder, to the order of the Collateral Agent in accordance with the terms of the loss payable clause referred to in the relevant Assignment of Insurances for the Collateral Vessel;

(ii)they will have endorsed on each and every policy as and when the same is issued the loss payable clause, to be in the excess of $1 million, and the notice of assignment referred to in the relevant Assignment of Insurances for the Collateral Vessel; and

(iii)they will not set off against any sum recoverable in respect of a claim against any Collateral Vessel under the said underwriters or brokers or any other Person in respect of any other vessel nor cancel the said insurances by reason of non-payment of such premiums or other amounts.

All policies of insurance required hereby shall provide for not less than 14 days prior written notice (seven days in respect of war risks) to be received by the Collateral Agent of the termination or cancellation of the insurance evidenced thereby. All policies of insurance maintained pursuant to this Schedule IV-A for risks covered by insurance other than that provided by a P & I Club shall contain provisions waiving underwriters’ rights of subrogation thereunder against any assured named in such policy and any assignee of said assured, only to the extent such underwriters agree

Americas 9311184 (2K)

Schedule IV-A
Page 4

to so waive rights of subrogation (provided that it is understood and agreed that the Borrower shall use commercially reasonable efforts to obtain such waivers). The Borrower shall assign to the Collateral Agent its full rights under any policies of insurance in respect of the Collateral Vessel in accordance with the terms contained herein (and, for the avoidance of doubt, such assignments shall include any additional value of any insurance that exceeds the values expressly required herein in respect of the Collateral Vessel). The Borrower agrees that it shall deliver unless the insurances by their terms provide that they cannot cease (by reason of nonrenewal or otherwise) without the Collateral Agent being informed and having the right to continue the insurance by paying any premiums not paid by the Borrower, receipts showing payment of premiums for Required Insurance and also of demands from the Collateral Vessel’s P & I underwriters to the Collateral Agent at least two (2) days before the risk in question commences.

(d)    Unless the Collateral Agent shall otherwise agree, all amounts of whatsoever nature payable under any insurance must be payable to the Collateral Agent for distribution first to itself and thereafter to the Borrower or others as their interests may appear, provided that, notwithstanding anything to the contrary herein, until otherwise required by the Collateral Agent by notice to the underwriters upon the occurrence and continuance of an Event of Default hereunder, (i) amounts payable under any insurance on the Collateral Vessel with respect to protection and indemnity risks may be paid directly to (x) the Borrower to reimburse it for any loss, damage or expense incurred by it and covered by such insurance or (y) the Person to whom any liability covered by such insurance has been incurred, and (ii) amounts payable under any insurance with respect to the Collateral Vessel involving any damage to the Collateral Vessel not constituting an Event of Loss, may be paid by underwriters directly for the repair, salvage or other charges involved or, if the Borrower shall have first fully repaired the damage or paid all of the salvage or other charges, may be paid to the Borrower as reimbursement therefor; provided,however, that if such amounts (including any franchise or deductible) are in excess of U.S. $1,000,000, the underwriters shall not make such payment without first obtaining the written consent thereto of the Collateral Agent and the loss payable clauses pertaining to such insurances shall be endorsed to that effect.

(e)    All amounts paid to the Collateral Agent in respect of any insurance on the Collateral Vessel shall be disposed of as follows (after deduction of the expenses of the Collateral Agent in collecting such amounts):

(i)    any amount which might have been paid at the time, in accordance with the provisions of paragraph (d) above, directly to the Borrower or others shall be paid by the Collateral Agent to, or as directed by, the Borrower;

(ii)    all amounts paid to the Collateral Agent in respect of an Event of Loss of the Collateral Vessel shall be applied by the Collateral Agent to the payment of the Financial Indebtedness hereby secured pursuant to Section 4.02(c) of the Credit Agreement; and

(iii) all other amounts paid to the Collateral Agent in respect of any insurance on the Collateral Vessel may, in the Collateral Agent’s sole discretion, be held and applied

Americas 9311184 (2K)

Schedule IV-A
Page 5

to the prepayment of the Obligations or to making of needed repairs or other work on the Collateral Vessel, or to the payment of other claims incurred by the Borrower relating to the Collateral Vessel, or may be paid to the Borrower or whosoever may be entitled thereto.

(f)     In the event that any claim or lien is asserted against the Collateral Vessel for loss, damage or expense which is covered by insurance required hereunder and it is necessary for the Borrower to obtain a bond or supply other security to prevent arrest of the Collateral Vessel or to release the Collateral Vessel from arrest on account of such claim or lien, the Collateral Agent, on request of the Borrower, may, in the sole discretion of the Collateral Agent, assign to any Person, firm or corporation executing a surety or guarantee bond or other agreement to save or release the Collateral Vessel from such arrest, all right, title and interest of the Collateral Agent in and to said insurance covering said loss, damage or expense, as collateral security to indemnify against liability under said bond or other agreement.

(g)     The Borrower shall deliver to the Collateral Agent certified copies and, whenever so reasonably requested by the Collateral Agent, if available to the Borrower, the originals of all certificates of entry, cover notes, binders, evidences of insurance and policies and all endorsements and riders amendatory thereof in respect of insurance maintained pursuant to Section 7.03 of the Credit Agreement and this Schedule IV-A for the purpose of inspection or safekeeping, or, alternatively, satisfactory letters of undertaking from the broker holding the same. The Collateral Agent shall be under no duty or obligation to verify the adequacy or existence of any such insurance or any such policies, endorsement or riders.

(h)    The Borrower will not execute or permit or willingly allow to be done any act by which any insurance may be suspended, impaired or cancelled, and that it will not permit or allow the Collateral Vessel to undertake any voyage or run any risk or transport any cargo which may not be permitted by the policies in force, without having previously notified the Collateral Agent in writing and insured the Collateral Vessel by additional coverage to extend to such voyages, risks, passengers or cargoes.

(i)     In case any underwriter proposes to pay less on any claim than the amount thereof, the Borrower shall forthwith inform the Collateral Agent, and if a Default, Event of Default or an Event of Loss has occurred and is continuing, the Collateral Agent shall have the exclusive right to negotiate and agree to any compromise.

(j)    The Borrower will comply with and satisfy all of the provisions of any applicable law, convention, regulation, proclamation or order concerning financial responsibility for liabilities imposed on the Borrower or the Collateral Vessel with respect to pollution by any state or nation or political subdivision thereof and will maintain all certificates or other evidence of financial responsibility as may be required by any such law, convention, regulation, proclamation or order with respect to the trade in which the Collateral Vessel are from time to time engaged and the cargo carried by it.

Americas 9311184 (2K)

Exhibit - 4.27

Schedule IV-B

VESSEL INSURANCE

Insured Vessel	Insured Party	Type of Insurance	Deductibles	Limits of Cover	Provider
SBI APOLLO	SBI Apollo Shipping Company Limited, Scorpio Ship Management S.A.M.	Freight Demurrage & Defence Certificate No. 176948	25%, in respect of each claim, subject to a minimum of US$ 10,000.	USD$3,000,000	The Standard Club Europe Ltd
SBI ATHENA	SBI Athena Shipping Company Limited, Scorpio Ship Management S.A.M.	Freight Demurrage & Defence Certificate No. 174037	25%, in respect of each claim, subject to a minimum of US$ 10,000.	USD$3,000,000	The Standard Club Europe Ltd
SBI BEHIKE	SBI Behike Shipping Company Limited, Scorpio Ship Management S.A.M.	Freight Demurrage & Defence Certificate No. 176959	25%, in respect of each claim, subject to a minimum of US$ 10,000.	USD$3,000,000	The Standard Club Europe Ltd
SBI BOLERO	SBI Bolero Shipping Company Limited, Scorpio Ship Management S.A.M.	Freight Demurrage & Defence Certificate No. 175483	25%, in respect of each claim, subject to a minimum of US$ 10,000.	USD$3,000,000	The Standard Club Europe Ltd
SBI CHURCHILL	SBI Churchill Shipping Company Limited, Scorpio Ship Management S.A.M.	Freight Demurrage & Defence Certificate No. 173812	25%, in respect of each claim, subject to a minimum of US$ 10,000.	USD$3,000,000	The Standard Club Europe Ltd
SBI CONGA	SBI Conga Shipping Company Limited, Scorpio Ship Management S.A.M.	Freight Demurrage & Defence Certificate No. 175482	25%, in respect of each claim, subject to a minimum of US$ 10,000.	USD$3,000,000	The Standard Club Europe Ltd
SBI HERA	SBI Hera Shipping Company Limited, Scorpio Ship Management S.A.M., Co-Assureds: Scorpio Commercial Management S.A.M., Scorpio Crewing Services Pte. Ltd., Scorpio Marine Management (India) Pvt Ltd, Scorpio UK Limited, Scorpio USA LLC	Freight Demurrage & Defence Certificate No. 166843	25%, in respect of each claim, subject to a minimum of US$ 10,000.	USD$3,000,000	The Standard Club Europe Ltd
SBI MAZURKA	SBI Mazurka Shipping Company Limited, Scorpio Ship Management S.A.M.	Freight Demurrage & Defence Certificate No. 176844	25%, in respect of each claim, subject to a minimum of US$ 10,000.	USD$3,000,000	The Standard Club Europe Ltd

Americas 9311184 (2K)

Schedule IV-B
Page 2

Insured Vessel	Insured Party	Type of Insurance	Deductibles	Limits of Cover	Provider
SBI MONTERREY	SBI Monterrey Shipping Company Limited, Scorpio Ship Management S.A.M.	Freight Demurrage & Defence Certificate No. 176961	25%, in respect of each claim, subject to a minimum of US$ 10,000.	USD$3,000,000	The Standard Club Europe Ltd
SBI PARAPARA	SBI Parapara Shipping Company Limited, Scorpio Ship Management S.A.M.	Freight Demurrage & Defence Certificate No. 176843	25%, in respect of each claim, subject to a minimum of US$ 10,000.	USD$3,000,000	The Standard Club Europe Ltd
SBI PERFECTO	SBI Perfecto Shipping Company Limited, Scorpio Ship Management S.A.M.	Freight Demurrage & Defence Certificate No. 173813	25%, in respect of each claim, subject to a minimum of US$ 10,000.	USD$3,000,000	The Standard Club Europe Ltd
SBI POSEIDON	SBI Poseidon Shipping Company Limited, Scorpio Ship Management S.A.M.	Freight Demurrage & Defence Certificate No. 176849	25%, in respect of each claim, subject to a minimum of US$ 10,000.	USD$3,000,000	The Standard Club Europe Ltd
SBI PRESIDENTE	SBI Presidente Shipping Company Limited, Scorpio Ship Management S.A.M.	Freight Demurrage & Defence Certificate No. 173814	25%, in respect of each claim, subject to a minimum of US$ 10,000.	USD$3,000,000	The Standard Club Europe Ltd
SBI REGGAE	SBI Reggae Shipping Company Limited, Scorpio Ship Management S.A.M.	Freight Demurrage & Defence Certificate No. 175485	25%, in respect of each claim, subject to a minimum of US$ 10,000.	USD$3,000,000	The Standard Club Europe Ltd
SBI ROCK	SBI Rock Shipping Company Limited, Scorpio Ship Management S.A.M.	Freight Demurrage & Defence Certificate No. 176876	25%, in respect of each claim, subject to a minimum of US$ 10,000.	USD$3,000,000	The Standard Club Europe Ltd
SBI SOUSTA	SBI Sousta Shipping Company Limited, Scorpio Ship Management S.A.M.	Freight Demurrage & Defence Certificate No. 175484	25%, in respect of each claim, subject to a minimum of US$ 10,000.	USD$3,000,000	The Standard Club Europe Ltd
SBI THALIA	SBI Thalia Shipping Company Limited, Scorpio Ship Management S.A.M.	Freight Demurrage & Defence Certificate No. 174038	25%, in respect of each claim, subject to a minimum of US$ 10,000.	USD$3,000,000	The Standard Club Europe Ltd
SBI TWIST	SBI Twist Shipping Company Limited, Scorpio Ship Management S.A.M.	Freight Demurrage & Defence Certificate No. 176877	25%, in respect of each claim, subject to a minimum of US$ 10,000.	USD$3,000,000	The Standard Club Europe Ltd

Americas 9311184 (2K)

Schedule IV-B
Page 3

Insured Vessel	Insured Party	Type of Insurance	Deductibles	Limits of Cover	Provider
SBI ZEUS	SBI Zeus Shipping Company Limited, Scorpio Ship Management S.A.M. Co-Assureds: Scorpio Commercial Management sam, Scorpio Crewing Services Pte. Ltd., Scorpio Marine Management (India) Pvt. Ltd., Scorpio UK Limited, Scorpio USA LLC	Freight Demurrage & Defence Certificate No. 166858	25%, in respect of each claim, subject to a minimum of US$ 10,000.	USD$3,000,000	The Standard Club Europe Ltd
SBI ZUMBA	SBI Zumba Shipping Company Limited, Scorpio Ship Management S.A.M.	Freight Demurrage & Defence Certificate No. 175486	25%, in respect of each claim, subject to a minimum of US$ 10,000.	USD$3,000,000	The Standard Club Europe Ltd

Americas 9311184 (2K)

Exhibit - 4.27

SCHEDULE V

ERISA

None.

Americas 9311184 (2K)

Exhibit - 4.27

SCHEDULE VI

A. Term Loan Vessels

Vessel Name	Registered Owner	Type	Flag	DWT	Builder’s Hull Number	Estimated Delivery Date	Contract Price	Maximum Loan Amount
SBI Athena	SBI Athena Shipping Company Limited	Ultramax	Marshall Islands	64,000	CX0610	Q1 2015	$27,250,000	$14,987,500
SBI Conga	SBI Conga Shipping Company Limited	Kamsarmax	Marshall Islands	82,000	H1722A	Q2 2015	$31,310,000	$17,220,500
SBI Behike	SBI Behike Shipping Company Limited	Capesize	Marshall Islands	180,000	HN1058	Q4 2015	$61,400,000	$33,770,000
SBI Bolero	SBI Bolero Shipping Company Limited	Kamsarmax	Marshall Islands	82,000	H1723A	Q3 2015	$31,310,000	$33,770,000
SBI Monterrey	SBI Monterrey Shipping Company Limited	Capesize	Marshall Islands	180,000	HN1059	Q1 2016	$61,400,000	$17,220,500
SBI Sousta	SBI Sousta Shipping Company Limited	Kamsarmax	Marshall Islands	82,000	H1724A	Q3 2015	$31,310,000	$17,220,500
SBI Rock	SBI Rock Shipping Company Limited	Kamsarmax	Marshall Islands	82,000	1092	Q4 2015	$29,313,000	$16,122,150
SBI Churchill	SBI Churchill Shipping Company Limited	Capesize	Marshall Islands	180,000	1059	Q4 2015	$54,771,860	$30,124,523
SBI Perfecto	SBI Perfecto Shipping Company Limited	Capesize	Marshall Islands	180,000	1060	Q4 2015	$54,771,860	$30,124,523
SBI Thalia	SBI Thalia Shipping Company Limited	Ultramax	Marshall Islands	64,000	CX0612	Q4 2015	$27,250,000	$14,987,500
SBI Twist	SBI Twist Shipping Company Limited	Kamsarmax	Marshall Islands	82,000	1093	Q1 2016	$29,313,000	$16,122,150
SBI Reggae	SBI Reggae Shipping Company Limited	Kamsarmax	Marshall Islands	82,000	H1725A	Q4 2015	$31,310,000	$17,220,500
SBI Parapara	SBI Parapara Shipping Company Limited	Kamsarmax	Marshall Islands	82,000	H1735A	Q1 2016	$31,310,000	$17,220,500

Americas 9311184 (2K)

Exhibit - 4.27

B. Revolving Loan Vessels

Vessel Name	Registered Owner	Type	Flag	DWT	Builder’s Hull Number	Estimated Delivery Date	Contract Price	Maximum Loan Amount
SBI Presidente	SBI Presidente Shipping Company Limited	Capesize	Marshall Islands	180,000	1061	Q1 2016	$54,771,860	$30,124,523
SBI Zumba	SBI Zumba Shipping Company Limited	Kamsarmax	Marshall Islands	82,000	H1726A	Q1 2016	$31,310,000	$17,220,500
SBI Mazurka	SBI Mazurka Shipping Company Limited	Kamsarmax	Marshall Islands	82,000	H1736A	Q2 2016	$31,310,000	$17,220,500
SBI Hera	SBI Hera Shipping Company Limited	Ultramax	Marshall Islands	60,200	1907	Q2 2016	$31,045,490	$17,075,020
SBI Zeus	SBI Zeus Shipping Company Limited	Ultramax	Marshall Islands	60,200	1906	Q2 2016	$31,045,490	$17,075,020
SBI Poseidon	SBI Poseidon Shipping Company Limited	Ultramax	Marshall Islands	60,200	1911	Q3 2016	$31,045,490	$17,075,020
SBI Apollo	SBI Apollo Shipping Company Limited	Ultramax	Marshall Islands	60,200	1912	Q3 2016	$31,045,490	$17,075,020

Americas 9311184 (2K)

Exhibit - 4.27

SCHEDULE VII

NOTICE ADDRESSES

If to any Credit Party, to:

Scorpio Bulkers Inc.

9, Boulevard Charles III

Monaco 98000

Attention: General Counsel

Facsimile: +377 97 77 8346

Email: legal@scorpiogroup.net

with copies to:

150 E. 58^th Street

New York, New York 10155

Attention: Chief Financial Officer

Facsimile: +1 212-542-1618

Email: hbaker@scorpiogroup.net

Americas 9311184 (2K)

Exhibit - 4.27

SCHEDULE VIII

SCHEDULED TERM AMORTIZATION PAYMENTS AND
SCHEDULED REVOLVING LOAN COMMITMENT REDUCTIONS

Americas 9311184 (2K)

EX-4.28

Exhibit - 4.28

EXECUTION VERSION

LOAN AGREEMENT

DATED AS OF JANUARY 15, 2015

THE COMPANIES

listed in Schedule 8

as Joint and Several Borrowers

SCORPIO BULKERS INC.

as Guarantor

THE EXPORT-IMPORT BANK OF KOREA and

THE BANKS, FINANCIAL INSTITUTIONS AND INSTITUTIONAL LENDERS LISTED IN PART 1 OF SCHEDULE 1

as KEXIM Lenders

and

THE BANKS, FINANCIAL INSTITUTIONS AND INSTITUTIONAL LENDERS LISTED IN PART 2 OF SCHEDULE 1

as K-Sure Lenders

and

THE BANKS, FINANCIAL INSTITUTIONS AND INSTITUTIONAL LENDERS LISTED IN PART 3 OF SCHEDULE 1

as Commercial Lenders

and

DNB MARKETS, INC.,

as Mandated Lead Arranger

DNB MARKETS, INC.

as Bookrunner

DNB BANK ASA, NEW YORK BRANCH

as Agent, K-Sure Agent, KEXIM Guaranteed Loan Agent and as Security Trustee

Relating to an up to US$411,264,000 Senior Secured Term Loan Facility to part finance the acquisition of the Ships identified in Schedule 6

Allen & Overy LLP
	0103218-0000004 NY:20884372.11

CONTENTS

Clause    Page

1. Interpretation    2

2. Facility    29

3. Position of the Lenders and K-Sure    31

4. Drawdown    33

5. Interest    35

6. Interest Periods    38

7. Default Interest    38

8. Repayment, Prepayment, Reduction and Cancellation    40

9. Conditions Precedent    44

10. Representations and Warranties    46

11. General Affirmative and Negative Covenants    56

12. Financial Covenants    66

13. Marine Insurance Covenants    67

14. Ship Covenants    73

15. Collateral Maintenance Ratio    78

16. Guarantee    79

17. Payments and Calculations    83

18. Application of Receipts    85

19. Application of Earnings    88

20. Events of Default    89

21. Fees and Expenses    93

22. Indemnities    95

23. No Set-off or Tax Deduction; Tax Indemnity; FATCA    97

24. Illegality, Etc    101

25. Increased Costs    102

26. Set off    104

27. Transfers and Changes to the Parties    105

28. K-Sure    111

29. Kexim    114

30. Variations and Waivers    117

31. Notices    118

32. Supplemental    121

33. The Servicing Banks    122

34. Law and Jurisdiction    127

35. Waiver of Jury Trial    128

36. Patriot Act Notice    128

0103218-0000004 NY:20884372.11

Schedule    Page

1. [       ]    129

Part 1 Kexim Lenders and Kexim Loan Commitments    129

Part 2 K-Sure Lenders and K-Sure Loan Commitments    130

Part 3 Commercial Lenders and Commercial Loan Commitment 132

2. Drawdown Notice    133

3. Condition Precedent Documents    135

Part 1 Conditions Precedent to Service of a Drawdown Notice    135

Part 2 Conditions Precedent to Delivery    137

4. Transfer Certificate    139

5. List of Approved Brokers    143

6. List of Ships    144

7. Mandatory Cost Formula    146

8. Borrowers    148

9. Amortization Schedule    151

Signatories    1

0103218-0000004 NY:20884372.11

THIS LOAN AGREEMENT (this Agreement) is made as of January 15, 2015

AMONG:

(1) THE COMPANIES listed in Schedule 8, as joint and several borrowers, (the "Borrowers", and each separately a "Borrower", which expressions include their respective successors, permitted transferees and permitted assigns);

(2) SCORPIO BULKERS INC., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands whose principal office is at 9, Boulevard Charles III, Monaco, 98000, as guarantor (the "Guarantor", which expression includes its successors, permitted transferees and permitted assigns);

(3) THE EXPORT-IMPORT BANK OF KOREA, with its registered office at 38 Eunhaeng-ro Yeongdeungpo-gu, Seoul, Korea 150-996 as a lender ("KEXIM", which expression includes its successors, permitted transferees and permitted assigns);

(4) THE BANKS, FINANCIAL INSTITUTIONS AND INSTITUTIONAL LENDERS listed in Part 1 of Schedule 1, as KEXIM export credit agency lenders (the "KEXIM Guaranteed Lenders", and together with KEXIM, "KEXIM Lenders", which expression includes their respective successors, permitted transferees and permitted assigns);

(5) THE BANKS, FINANCIAL INSTITUTIONS AND INSTITUTIONAL LENDERS listed in Part 2 of Schedule 1, as K-Sure export credit agency lenders (the "K-Sure Lenders", which expression includes their respective successors, permitted transferees and permitted assigns);

(6) THE BANKS, FINANCIAL INSTITUTIONS AND INSTITUTIONAL LENDERS listed in Part 3 of Schedule 1, as commercial lenders (the "Commercial Lenders", which expression includes their respective successors, permitted transferees and permitted assigns);

(7) DNB MARKETS, INC. as Mandated Lead Arranger (the "MandatedLead Arranger" which expression includes its respective successors, permitted transferees and permitted assigns);

(8) DNB MARKETS, INC. as Bookrunner (the "Bookrunner", which expression includes its respective successors, permitted transferees and permitted assigns);

(9) DNB BANK ASA, NEW YORK BRANCH, acting in such capacity through its office at 200 Park Avenue, 31st Floor, New York, NY 10166 as administrative agent for the Lenders (in such capacity, the "Agent", which expression includes its successors, permitted transferees and permitted assigns);

(10) DNB BANK ASA, NEW YORK BRANCH, acting in such capacity through its office at 200 Park Avenue, 31st Floor, New York, NY 10166 as security agent for the Lenders (in such capacity, the "Security Trustee", which expression includes its successors, permitted transferees and permitted assigns);

(11) DNB BANK ASA, NEW YORK BRANCH, acting in such capacity through its office at 200 Park Avenue, 31st Floor, New York, NY 10166 as K-Sure agent (in such capacity, the "K‑Sure Agent", which expression includes its successors, permitted transferees and permitted assigns); and

(12) DNB BANK ASA, NEW YORK BRANCH, acting in such capacity through its office at 200 Park Avenue, 31st Floor, New York, NY 10166 as KEXIM Guaranteed Loan agent (in such capacity, the

0103218-0000004 NY:20884372.11 1

"KEXIM Guaranteed Loan Agent", which expression includes its successors, permitted transferees and permitted assigns).

BACKGROUND:

(A) The Lenders have severally agreed to make available to the Borrowers, on a joint and several basis, a senior secured term loan facility in the aggregate principal amount of up to $411,264,000 to finance part of the purchase price of each of the Ships consisting of:

(i) a commercial loan facility in the principal amount of up to $91,264,000 provided by the Commercial Lenders; and

(ii) an export credit agency loan facility in the principal amount of up to $160,000,000 provided or supported by KEXIM; and

(iii) an export credit agency loan facility in the principal amount of up to $160,000,000 to be made available to the Borrowers by the K-Sure Lenders, subject to the K-Sure Insurance Policies.

IT IS AGREED as follows:

1. INTERPRETATION

1.1 Definitions

Subject to Clause 1.5, in this Agreement:

"Account Bank" means DNB BANK ASA, Grand Cayman Branch, acting through its office at 200 Park Avenue, New York, NY 10166;

"Additional Prepayment Amount" means in circumstances where a prepayment is being made and the Collateral Maintenance Ratio would otherwise be breached following such prepayment, a principal amount of the Loans (in the Proportionate Shares) determined by the Agent which would be sufficient to ensure that the Collateral Maintenance Ratio is satisfied;

"Advance" means, as the context may require, a Commercial Loan Advance, a K-Sure Loan Advance or a KEXIM Loan Advance;

"Affiliate" means, as to any person, any other person that, directly or indirectly, controls, is controlled by or is under common control with such person or is a director or officer of such person, and for purposes of this definition, the term control (including the terms controlling, controlled by and under common control with) of a person means the possession, direct or indirect, of the power to vote 20% or more of the Voting Stock of such person or to direct or cause direction of the management and policies of such person, whether through the ownership of Voting Stock, by contract or otherwise;

"Agreed Form" means in relation to any document, that document in the form approved by the Agent with the prior written consent of all Lenders and K-Sure (such consent not to be unreasonably withheld or delayed), or as otherwise approved in accordance with any other approval procedure specified in any relevant provision of any Finance Document, such consent not to be unreasonably withheld or delayed;

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"Approved Acquisition Contract" means, in relation to a Ship, the shipbuilding contract made or to be made between an Approved Builder and the Guarantor (or the Borrower who will be the owner of such Ship);

"Approved Broker" means any of the companies listed in Schedule 5 or such other company proposed by the Guarantor which the Agent may, with the prior written consent of the Majority Lenders, KEXIM and K-Sure (such consent not to be unreasonably withheld or delayed), approve from time to time for the purpose of valuing a Ship, who shall act as an expert and not as arbitrator and whose valuation shall be conclusive and binding on all parties to this Agreement;

"Approved Builder" means Sungdong Shipbuilding & Marine Engineering or any Affiliate thereof or such other company as the Agent may, with the prior written consent of the Majority Lenders, KEXIM and K-Sure, approve from time to time in writing as the builder of a Ship;

"Approved Flag" means the Marshall Islands or such other flag as the Agent may, with the prior written consent of all Lenders and K-Sure, approve from time to time in writing as the flag on which a Ship shall be registered;

"Approved Management Agreement" means, in relation to a Ship in respect of its commercial and/or technical management, a management agreement between the Borrower that owns that Ship and the relevant Approved Manager;

"Approved Manager" means each of SSM and SCM or any other company proposed by the Guarantor which the Agent may, with the prior written consent of the Majority Lenders (such consent not to be unreasonably withheld or delayed), approve from time to time in writing as the technical and/or commercial manager of a Ship;

"Availability Period" means the period commencing on the Effective Date and ending on the earlier date of

(a) the Delivery Date of the last Ship to be acquired; and

(b) December 31, 2016 (or such later date as the Agent may, with the consent of all the Lenders and K‑Sure, agree with the Guarantor), and

(c) the date on which the Total Commitments in respect of the Loan Facilities are fully borrowed, cancelled or terminated;

"Bank Secrecy Act" means the United States Bank Secrecy Act of 1970, as amended;

"Basel III" means the global regulatory framework on bank capital and liquidity contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee in December 2010 each as amended, and any other documents published by the Basel Committee in relation to "Basel III";

"Business Day" means a day on which banks are open in: London, England; Hong Kong, PRC; New York, United States; Oslo, Norway; and Seoul, Korea; except as used in the definition of Quotation Date, means the day on which banks are open in London, England.

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"Capitalized Lease" means, as applied to any person, any lease of any property (whether real, personal or mixed) of which the discounted present value of the rental obligations of such person, as lessee, in conformity with GAAP, is required to be capitalized on the balance sheet of such person; and Capitalized Lease Obligation is defined to mean the rental obligations, as aforesaid, under a Capitalized Lease;

"Cash Equivalents" means:

(a) unencumbered securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof);

(b) time deposits, certificates of deposit or deposits (in each case, unencumbered) held with any commercial bank of recognized standing organized under the laws of the United States of America, any state thereof or any foreign jurisdiction having capital and surplus in excess of $500,000,000;

(c) repurchase obligations with a term of not more than 90 days for underlying securities of the types described in clause (a) above entered into with any bank meeting the qualifications specified in clause (b) above;

(d) commercial paper issued by any person incorporated in the United States rated at least BBB+ or the equivalent thereof by Moody’s and in each case maturing not more than one year after the date of acquisition by such person;

(e) investments in money market funds substantially all of whose assets are comprised of securities of the types described in clauses (a) through (d) above; and

(f) such other securities or instruments as the Majority Lenders shall agree in writing;

and in respect of both (a) and (b) above, with a Rating Category of at least "A-" by S&P and "A" by Moody's (or the equivalent used by another Rating Agency) (provided that, in the case of (b) above only, such Rating Category shall not be applicable for time deposits, certificates of deposit or deposits (in each case, unencumbered) held with any commercial bank which is a Lender), and in each case having maturities of not more than 90 days from the date of acquisition;

"Change of Control" means:

(a) in respect of the Borrowers, the occurrence of any act, event or circumstance that without prior written consent of the Majority Lenders results in the Guarantor owning directly or indirectly less than 100% of the issued and outstanding Equity Interests in a Borrower; and

(b) in respect of the Guarantor:

(i) a "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act), other than any holders of the Guarantor's Equity Interests as of the Effective Date, becomes the ultimate "beneficial owner" (as defined in Rule 13(d)-3 under the Exchange Act and including by reason of any change in the ultimate "beneficial ownership" of the Equity Interests of the Guarantor) of more than 35% of the total voting power of the Voting Stock of the Guarantor (calculated on a fully diluted basis); or

0103218-0000004 NY:20884372.11 4

(ii) individuals who at the beginning of any period of two consecutive calendar years constituted the Board of Directors or equivalent governing body of the Guarantor (together with any new directors (or equivalent) whose election by such Board of Directors or equivalent governing body or whose nomination for election was approved by a vote of at least two-thirds of the members of such Board of Directors or equivalent governing body then still in office who either were members of such Board of Directors or equivalent governing body at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute at least 50% of the members of such Board of Directors or equivalent governing body then in office;

"Charter" means, in relation to a Ship, any demise, time or consecutive voyage charter in respect of that Ship for a term which exceeds, or which by virtue of any optional extension by the Borrower that owns that Ship may exceed, 12 months;

"Charter Assignment"means, in relation to a Ship, an assignment of the Charter for such Ship, in Agreed Form;

"Classification Society" means, in relation to a Ship, any of Det Norske Veritas, Lloyd's Register of Shipping, American Bureau of Shipping, Korean Register of Shipping, Bureau Veritas or such other first-class vessel classification society that is a member of IACS that the Agent may, with the prior written consent of all Lenders (such consent not to be unreasonably withheld or delayed) and K-Sure, approve from time to time;

"Code" means the United States Internal Revenue Code of 1986, as amended, and the regulations promulgated and rulings issued thereunder;

"Collateral" means all property (including, without limitation, any proceeds thereof) referred to in the Finance Documents that is or is intended to be subject to any Security Interest in favor of the Security Trustee, for the benefit of the Creditor Parties, securing the Secured Liabilities;

"Collateral Maintenance Ratio" has the meaning given in Clause 15.2;

"Commercial DNB Loan" means the aggregate principal amount of the Commercial DNB Loan Advances;

"Commercial DNB Loan Advance" means the principal amount of each borrowing by the Borrowers of a portion of the Commercial DNB Loan Commitments;

"Commercial DNB Loan Commitment"means, in relation to DNB Capital LLC, the amount specified opposite its name in Part 3 of Schedule 1 in respect of the Commercial Loan Facility, or, as the case may require, the amount(s) specified in the relevant Transfer Certificate, as such amount(s) may be reduced, cancelled or terminated in accordance with this Agreement;

"Commercial Fixed Rate Loan" means the aggregate principal amount of the Commercial Fixed Rate Loan Advances;

"Commercial Fixed Rate Loan Advance"means the principal amount of each borrowing by the Borrowers of a portion of the Commercial Fixed Rate Loan Commitments;

"Commercial Fixed Rate Loan Commitment"means, in relation to Woori Bank acting through Woori Bank Gongduk-Dong Financial Center or its successors, permitted transferees and permitted assigns,

0103218-0000004 NY:20884372.11 5

the amount specified opposite its name in Part 3 of Schedule 1 in respect of the Commercial Loan Facility, or, as the case may require, the amount(s) specified in the relevant Transfer Certificate, as such amount(s) may be reduced, cancelled or terminated in accordance with this Agreement;

"Commercial Loan" means the aggregate principal amount of the Commercial DNB Loan Advances and the Commercial Fixed Rate Loan Advances from time to time outstanding under this Agreement;

"Commercial Loan Advance"means the principal amount of each borrowing by the Borrowers of a portion of the Commercial Loan Commitments;

"Commercial Loan Commitment"means the aggregate of the Commercial Fixed Rate Loan Commitments and the Commercial DNB Loan Commitments;

"Commercial Loan Facility" means the term loan facility in the original principal amount of up to $91,264,000 to be made available to the Borrowers under the terms of this Agreement;

"Commercial Loan Maturity Date" means, in respect of a Commercial Loan Advance, the earlier of (a) the date falling on the sixth (6th) anniversary of the Final Delivery Date; (b) 30 June 2022; and (c) the date on which the Commercial Loan is accelerated pursuant to Clause 20.4;

"Commission" or "SEC" means the United States Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act;

"Commitment" means, as the context may require, a Commercial Loan Commitment, a K‑Sure Loan Commitment or a KEXIM Loan Commitment;

"Compliance Certificate" means a certificate executed by an authorized person of the Guarantor in Agreed Form;

"Consolidated EBITDA" means, for any accounting period, the consolidated net income of the Guarantor for that accounting period:

(a) plus, to the extent deducted in computing the net income of the Guarantor for that accounting period, the sum, without duplication, of:

(i) all federal, state, local and foreign income taxes and tax distributions;

(ii) Consolidated Net Interest Expense;

(iii) depreciation, depletion, amortization of intangibles and other non-cash charges or non-cash losses (including non-cash transaction expenses and the amortization of debt discounts), amortization of restricted stock awards, and any extraordinary losses not incurred in the ordinary course of business;

(iv) expenses incurred in connection with a special or intermediate survey (including any underwater survey done in lieu thereof) of a Ship during such period; and

(v) any drydocking expenses of a ship owned by a Borrower or any of the other subsidiaries of the Guarantor;

0103218-0000004 NY:20884372.11 6

(b) minus, to the extent added in computing the consolidated net income of the Guarantor for that accounting period, (i) any non-cash income or losses or non-cash gains/losses and (ii) any extraordinary gains or losses on asset sales not incurred in the ordinary course of business;

"Consolidated Funded Debt" means, for any accounting period, the sum of the following for the Guarantor determined (without duplication) on a consolidated basis for such period and in accordance with GAAP consistently applied:

(a) all Financial Indebtedness; and

(b) all obligations to pay a specific purchase price for goods or services whether or not delivered or accepted (including take-or-pay and similar obligations which in accordance with GAAP would be shown on the liability side of a balance sheet);

provided that balance sheet accruals for future drydock expenses shall not be classified as Consolidated Funded Debt;

"ConsolidatedLiquidity" means, on a consolidated basis at any time, the sum of (a) cash, (b) Cash Equivalents, in each case held by the Guarantor on a freely available and unencumbered basis and (c) amounts readily available for drawing by the Guarantor and its subsidiaries under committed credit facilities with a maturity date in excess of 12 months which remain undrawn and could be drawn for general working capital or other general corporate purposes (subject to the availability limits and other provisions set out in the agreements related to such committed credit facilities), provided that no event of default has occurred and is continuing under any such committed credit facilities and the Borrower is entitled to borrow under such committed credit facilities;

"ConsolidatedNet Interest Expense" means the aggregate of all interest, commissions, discounts and other costs, charges or expenses accruing that are due from the Guarantor and all of its subsidiaries during the relevant accounting period less (a) interest income received, (b) commitment fees and (c) amortization of deferred charges and arrangement fees, determined on a consolidated basis in accordance with GAAP and as shown in the consolidated statements of income for the Guarantor;

"Consolidated Tangible Net Worth" means, on a consolidated basis, the total shareholders' equity (including retained earnings) of the Guarantor, minus goodwill and other non-tangible items;

"Consolidated Total Capitalization" means Consolidated Tangible Net Worth plus Consolidated Funded Debt;

"Contract Price" means, in respect of a Ship, the Contract Price specified in Schedule 6;

"Contractual Currency" has the meaning given in Clause 22.4;

"Contribution" means, in relation to a Lender and a Loan, the part of that Loan which is owing to that Lender or, as the context may require, the portion of an Advance to be made by such Lender;

"CRD IV" means (a) Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU No 648/2012) and (b) Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC;

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"Creditor Party" means the Agent, the Security Trustee, any Lender, any Mandated Lead Arranger, the K-Sure Agent, the KEXIM Guaranteed Loan Agent or any Bookrunner whether as at the Effective Date or at any later time;

"Currency Agreement" means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement designed to protect a person or any of its subsidiaries against fluctuations in currency values to or under which such person or any of its subsidiaries is a party or a beneficiary on the Effective Date or becomes a party or a beneficiary thereafter;

"Delivery Date" means the date of the delivery of a Ship to the Borrower that will own such Ship;

"Disbursement Authorization" has the meaning given in Clause 9.3(b);

"Dollars"and "$" means the lawful currency for the time being of the United States of America;

"Drawdown Date" means, in relation to an Advance and subject to the fulfilment of the conditions specified in Clause 4.2(a), the date specified in the Drawdown Notice;

"Drawdown Notice" means a notice in the form set out in Schedule 2 (or in any other form which the Agent approves or reasonably requires);

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

(a) except to the extent that they fall within paragraph (b):

(i) all freight, hire and passage moneys;

(ii) compensation payable to the Borrower owning that Ship or the Security Trustee in the event of requisition of that Ship for hire;

(iii) remuneration for salvage and towage services;

(iv) demurrage and detention moneys;

(v) damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of that Ship; and

(vi) all moneys which are at any time payable under Insurances in respect of loss of hire; and

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

"Earnings Account" means, in relation to the Ships,

(a) an account in the name of the Borrower owning the relevant Ship with the Account Bank designated as the Earnings Account for such Ship; or

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(b) any other account (with the Account Bank or the Agent or with another bank or financial institution acceptable to the Majority Lenders) which is designated as the Earnings Account in relation to the Ships for the purposes of this Agreement;

"Earnings Account Pledge" means a pledge of each Earnings Account, in Agreed Form;

"Earnings Assignment"means, in relation to a Ship, an assignment of the Earnings and any Requisition Compensation of that Ship, in Agreed Form;

"EDGAR" means the Electronic Data Gathering, Analysis, and Retrieval system maintained by the SEC;

"Effective Date" means the date on which this Agreement is executed and delivered by the parties hereto;

"Email" has the meaning given in Clause 29.1;

"Environmental Claim" means:

(a) any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or

(b) any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident,

and "claim" means a claim for damages, compensation, indemnification, contribution, fines, penalties or any other payment of any kind whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset;

"Environmental Incident" means:

(a) any release of Environmentally Sensitive Material from a Ship; or

(b) any incident in which Environmentally Sensitive Material is released and which involves a collision or allision between a Ship and another vessel or object, or some other incident of navigation or operation, in any case, in connection with which such Ship is actually or potentially liable to be arrested, attached, detained or injuncted and/or such Ship and/or the Guarantor and/or the Borrower owning such Ship and/or any operator or manager of the Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or

(c) any other incident in which Environmentally Sensitive Material is released otherwise than from a Ship and in connection with which such Ship is actually or potentially liable to be arrested and/or where the Guarantor and/or the Borrower owning such Ship and/or any operator or manager of such Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action;

"Environmental Law" means any law relating to pollution or protection of the environment, to the carriage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material;

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"Environmental Permit" means any permit, approval, identification number, license or other authorization required under any applicable Environmental Law;

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

"Equity Contribution" has the meaning given in Clause 4.2;

"Equity Interests" of any person means:

(a) any and all shares and other equity interests (including common stock, preferred stock, limited liability company interests and partnership interests) in such person; and

(b) all rights to purchase, warrants or options or convertible debt (whether or not currently exercisable), participations or other equivalents of or interests in (however designated) such shares or other interests in such person;

"Equity Proceeds" means the net cash proceeds from the issuance of common or preferred stock of the Guarantor;

"ERISA" means the United States Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated and rulings issued thereunder;

"ERISA Affiliate" means a trade or business (whether or not incorporated) that, together with the Guarantor or any subsidiary of it, would be deemed to be a single employer under Section 414 of the Code;

"Estate" has the meaning assigned such term in Clause 31.1(b)(ii);

"Event of Default" means any of the events or circumstances described in Clause 20.1;

"Exchange Act" means the United States Securities Exchange Act of 1934, as amended, and any successor act thereto, and (unless the context otherwise requires) includes the rules and regulations of the Commission promulgated thereunder;

"Executive Order" means an executive order issued by the President of the United States of America;

"Fair Market Value" means, in relation to a Ship, the market value of such Ship at any date that is shown by the average of two (2) valuations each prepared for and addressed to the Agent on a semi-annual basis:

(a) as at a date not more than 10 days prior to the date such valuation is delivered to the Agent;

(b) by Approved Brokers;

(c) if such valuation is to be carried out in relation to a Major Casualty, with physical inspection of that Ship and in all other circumstances, without physical inspection of that Ship; and

(d) on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment (and with no value to be given to any pooling arrangements),

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provided that if a range of market values is provided in a particular appraisal, then the market value in such appraisal shall be deemed to be the mid-point within such range;

"FATCA" means Sections 1471 through 1474 of the Code and any regulation thereunder issued by the United States Treasury or any official interpretations or administrative guidance relating thereto;

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

"FATCA Exempt Party" means a FATCA Relevant Party who is entitled under FATCA to receive payments free from any FATCA Deduction;

"FATCA Non-Exempt Lender" means any Lender who is a FATCA Non-Exempt Party;

"FATCA Non-Exempt Party" means a FATCA Relevant Party who is not a FATCA Exempt Party;

"FATCA Relevant Party" means each Creditor Party and each Security Party;

"Fee Letters" means each letter dated the date hereof from the Agent to the Guarantor;

"Final Delivery Date" means the earlier of the date of:

(a) the Delivery Date for the last Ship delivered by an Approved Builder to a Borrower; and

(b) the last day of the Availability Period;

"Finance Documents" means:

(a) this Agreement;

(b) the Charter Assignments;

(c) each Earnings Account Pledge;

(d) the Earnings Assignments;

(e) the Insurance Assignments;

(f) the Mortgages;

(g) the Loan Notes;

(h) the Shares Pledges;

(i) the Fee Letters;

(j) the KEXIM Guarantee;

(k) the Manager's Undertakings; and

(l) any other document (whether creating a Security Interest or not) which is executed at any time by any person as security for, or to establish any form of subordination or priorities arrangement in relation to, any amount payable to the Lenders under this Agreement or any of the other

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documents referred to in this definition or which is entered or to be entered into by any Security Party and is designated as a "Finance Document" under this Agreement;

"Financial Indebtedness" means, with respect to any person (the debtor) at any date of determination (without duplication) as determined in conformity with GAAP:

(a) all obligations of the debtor for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;

(b) all obligations of the debtor evidenced by bonds, debentures, notes or other similar instruments;

(c) all obligations of the debtor in respect of any acceptance credit, guarantee or letter of credit facility or equivalent made available to the debtor (including reimbursement obligations with respect thereto) which in accordance with GAAP would be shown on the liability side of a balance sheet;

(d) all obligations of the debtor to pay the deferred purchase price of property or services, which purchase price is due more than 6 months after the date of placing such property in service or taking delivery thereof or the completion of such services, except trade payables;

(e) all Capitalized Lease Obligations of the debtor as lessee;

(f) all Financial Indebtedness of persons other than the debtor secured by a Security Interest on any asset of the debtor, whether or not such Financial Indebtedness is assumed by the debtor, provided that the amount of such Financial Indebtedness shall be the lesser of (i) the fair market value of such asset at such date of determination and (ii) the amount of such Financial Indebtedness; and

(g) all Financial Indebtedness of persons other than the debtor under any guarantee, indemnity or similar obligation entered into by the debtor to the extent such Financial Indebtedness is guaranteed or indemnified by the debtor.

The amount of Financial Indebtedness of any debtor at any date shall be the outstanding balance at such date of all unconditional obligations as described above and, with respect to contingent obligations, the maximum liability upon the occurrence of the contingency giving rise to the obligation, as determined in conformity with GAAP, provided that (i) the amount outstanding at any time of any Financial Indebtedness issued with an original issue discount is the face amount of such Financial Indebtedness less the remaining unamortized portion of such original issue discount of such Financial Indebtedness at such time as determined in conformity with GAAP, and (ii) Financial Indebtedness shall not include any liability for taxes;

"Fiscal Year" means, in relation to any person, each period of one (1) year commencing on 1 January of each year and ending on 31 December of such year in respect of which its accounts are or ought to be prepared;

"Foreign Pension Plan" means any plan, fund (including without limitation, any superannuation fund) or other similar program established or maintained outside the United States of America by the Guarantor or any one or more of its subsidiaries primarily for the benefit of its or their employees residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, and which plan, fund or program would be covered by Title IV of ERISA but which is not subject to ERISA by reason of Section 4(b)(4) of ERISA;

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"GAAP" means generally accepted accounting principles in effect in the United States.

"Guaranteed Obligations" has the meaning given in Clause 16.1;

"IACS" means the International Association of Classification Societies;

"Insolvency Event" means with respect to any person:

(a) such person shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or

(b) any proceeding shall be instituted by or against such person seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property, and solely in the case of an involuntary proceeding:

(i) such proceeding shall remain undismissed or unstayed for a period of 60 days; or

(ii) any of the actions sought in such involuntary proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property) shall occur.

"Insurance Assignment" means, in relation to a Ship, an assignment of the Insurances of that Ship, in Agreed Form;

"Insurances" means in relation to a Ship:

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

(b) all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium and any rights in respect of any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the Effective Date;

"Interest Period" means a period determined in accordance with Clause 6;

"IRS" means the United States Internal Revenue Service or any successor taxing authority or agency of the United States government;

"ISM Code" means the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organization, as the same may be amended or supplemented from time to time (and the terms safety management system, Safety Management Certificate and Document of Compliance have the same meanings as are given to them in the ISM Code);

"ISM Code Documentation" includes, in respect of a Ship:

0103218-0000004 NY:20884372.11 13

(a) the Document of Compliance and Safety Management Certificate issued pursuant to the ISM Code in relation to that Ship within the periods specified by the ISM Code;

(b) all other documents and data which are relevant to the safety management system and its implementation and verification which the Agent may reasonably require; and

(c) any other documents which are prepared or which are otherwise relevant to establish and maintain that Ship's compliance or the compliance of the Borrower that owns that Ship or the relevant Approved Manager with the ISM Code which the Agent may reasonably require;

"ISPS Code" means the International Ship and Port Facility Security Code as adopted by the International Maritime Organization, as the same may be amended or supplemented from time to time;

"ISPS Code Documentation" includes:

(a) the ISSC; and

(b) all other documents and data which are relevant to the ISPS Code and its implementation and verification which the Agent may reasonably require;

"ISSC" means a valid and current International Ship Security Certificate issued under the ISPS Code;

"KEXIM" means The Export-Import Bank of Korea, with its registered office at 38 Eunhaeng-ro Yeongdeungpo-gu, Seoul, Korea 150-996;

"KEXIM Direct Loan" means the aggregate principal amount of the KEXIM Direct Loan Advances from time to time outstanding under this Agreement;

"KEXIM Direct Loan Advance" means the principal amount of each borrowing by the Borrowers of a portion of the KEXIM Direct Loan Commitments;

"KEXIM Direct Loan Commitment" means, in relation to KEXIM, the amount specified opposite its name in Part 1 of Schedule 1, less the amount(s) specified in the relevant Transfer Certificate; and as such amount(s) may be reduced, cancelled or terminated in accordance with this Agreement;

"KEXIM Direct Loan Facility" means the term loan facility in the original principal amount of up to eighty five million Dollars ($85,000,000) to be made available to the Borrowers by KEXIM under this Agreement;

"KEXIM Guarantee" means the guarantee issued by KEXIM providing political and commercial risk cover in an amount of up to one hundred percent (100%) of the KEXIM Guaranteed Loan Advances outstanding from time to time and accrued interest thereunder, including, for the avoidance of doubt, the KEXIM Guarantee Premium;

"KEXIM Guarantee Premium" means an amount equal to five hundred and seven basis points (5.07%) of the total KEXIM Guaranteed Loan Commitment;

"KEXIM Guarantee Premium Repayment Proportion" means, in respect of a voluntary prepayment in full of the KEXIM Guaranteed Loan, the amount of unutilised KEXIM Guarantee Premium to be refunded to the Borrowers in the following proportions:

(a) after and including the sixth (6th) anniversary of the Final Delivery Date, 90%;

0103218-0000004 NY:20884372.11 14

(b) from and including the fifth (5th) anniversary of the Final Delivery Date to and excluding the sixth (6th) anniversary of the Final Delivery Date, 80%;

(c) from and including the fourth (4th) anniversary of the Final Delivery Date to and excluding the fifth (5th) anniversary of the Final Delivery Date, 70%;

(d) from and including the third (3rd) anniversary of the Final Delivery Date to and excluding the fourth (4th) anniversary of the Final Delivery Date, 60%;

(e) from and including the second (2nd) anniversary of the Final Delivery Date to and excluding the third (3rd) anniversary of the Final Delivery Date, 50%; and

(f) from and including the first (1st) day following the Final Delivery Date to the second anniversary to and excluding second (2nd) anniversary of the Final Delivery Date, 40%;

"KEXIM Guaranteed Loan" means the aggregate principal amount of the KEXIM Guaranteed Loan Advances from time to time outstanding under this Agreement;

"KEXIM Guaranteed Loan Advance" means the principal amount of each borrowing by the Borrowers of a portion of the KEXIM Guaranteed Loan Commitment;

"KEXIM Guaranteed Loan Commitment" means, in relation to a KEXIM Lender (other than KEXIM), the amount specified opposite its name in Part 1 of Schedule 1, or, as the case may require, the amount(s) specified in the relevant Transfer Certificate; and as such amount(s) may be reduced, cancelled or terminated in accordance with this Agreement;

"KEXIM Guaranteed Loan Facility" means the term loan facility in the original principal amount of up to seventy five million Dollars ($75,000,000) to be made available to the Borrowers by the KEXIM Guaranteed Lenders under this Agreement;

"KEXIM Loan" means, at any time, the aggregate of the KEXIM Direct Loan and the KEXIM Guaranteed Loan at such time.

"KEXIM Loan Advance" means a KEXIM Direct Loan Advance or a KEXIM Guaranteed Loan Advance;

"KEXIM Loan Commitments" means the aggregate of the KEXIM Direct Loan Commitments and the KEXIM Guaranteed Loan Commitments;

"KEXIM Loan Facility" means the KEXIM Direct Loan Facility and the KEXIM Guaranteed Loan Facility;

"KEXIM Loan Maturity Date" means, in respect of a KEXIM Loan Advance, the earliest of (a) the date falling on the twelfth (12th) anniversary of the relevant Delivery Date; (b) if the Commercial Loan is not refinanced on or before the date falling 15 days before the Commercial Loan Maturity Date, the Commercial Loan Maturity Date; (c) if the Commercial Loan is refinanced on or before the date falling 15 days before the Commercial Loan Maturity Date, the Refinanced Loan Maturity Date; and (d) the date on which the Loan is accelerated pursuant to Clause 20.4;

"K-Sure" means Korea Trade Insurance Corporation of 2-16 Floors, Seoul Central Building, 136 Seorin Dong, Jongro-ku, Seoul 110-729, Korea;

0103218-0000004 NY:20884372.11 15

"K-Sure 100% Policy Loan" means the aggregate principal amounts of the K-Sure 100% Policy Loan Advances outstanding under this Agreement;

"K-Sure 100% Policy Loan Advance" means the principal amount of each borrowing by the Borrowers of a portion of the K-Sure 100% Policy Loan Commitments;

"K-Sure 100% Policy Loan Commitments" means, in relation to a K-Sure Lender, the amount set forth opposite its name in Part 2 of Schedule 1 in respect of the K-Sure 100% Policy Loan, or, as the case may require, the amount(s) specified in the relevant Transfer Certificate, as such amount(s) may be reduced, cancelled or terminated in accordance with this Agreement;

"K-Sure 95% Policy Loan" means the aggregate principal amounts of the K-Sure 95% Policy Loan Advances outstanding under this Agreement;

"K-Sure 95% Policy Loan Advance" means the principal amount of each borrowing by the Borrowers of a portion of the K-Sure 95% Policy Loan Commitments;

"K-Sure 95% Policy Loan Commitments" means, in relation to a K-Sure Lender, the amount set forth opposite its name in Part 2 of Schedule 1 in respect of the K-Sure 95% Policy Loan, or, as the case may require, the amount(s) specified in the relevant Transfer Certificate, as such amount(s) may be reduced, cancelled or terminated in accordance with this Agreement;

"K-Sure Insurance Policy" means, in respect of the relevant Ship, the policy of the Medium and Long Term Export Insurance Policy, the General Terms and Conditions of Medium and Long Term Export Insurance (Buyer's Credit, Standard Type) and the special terms and conditions attached thereto and issued or to be issued by K-Sure providing political and commercial risk cover in an amount of up to one hundred percent (100%) or ninety-five percent (95%), as the case may be of the K-Sure Loan Advances outstanding from time to time and accrued interest thereunder;

"K-Sure Loan" means the aggregate principal amounts of the K-Sure 95% Policy Loan and the K-Sure 100% Policy Loan from time to time outstanding under this agreement;

"K-Sure Loan Advance" means a K-Sure 95% Policy Loan Advance or a K-Sure 100% Policy Loan Advance;

"K-Sure Loan Commitments" means, the aggregate of the K-Sure 95% Policy Loan Commitments and the K-Sure 100% Policy Loan Commitments;

"K-Sure Loan Facility" means the term loan facility in the original principal amount of up to one hundred and sixty million Dollars ($160,000,000) to be made available to the Borrowers by the K-Sure Lenders under this Agreement;

"K-Sure Loan Maturity Date" means, in respect of a K-Sure Advance, the earliest of (a) the date falling on the twelfth (12th) anniversary of the relevant Delivery Date; (b) if the Commercial Loan is not refinanced on or before the date falling 15 days before the Commercial Loan Maturity Date, the Commercial Loan Maturity Date; (c) if the Commercial Loan is refinanced on or before the date falling 15 days before the Commercial Loan Maturity Date, the Refinanced Loan Maturity Date; and (d) the date on which the Loan is accelerated pursuant to Clause 20.4;

"K-Sure Matters" means all communications and dealings with K-Sure in connection with each K-Sure Insurance Policy, any Finance Document, the Borrowers and/or any other Security Party or any

0103218-0000004 NY:20884372.11 16

matters relating thereto (including, without limitation, obtaining any approvals and/or instructions from K-Sure);

"K-Sure Premium" means, in respect of each K-Sure Insurance Policy, the full sum payable to K-Sure as stipulated in that K-Sure Insurance Policy, which sum shall be adjusted by K-Sure in accordance with the terms of that K-Sure Insurance Policy and K-Sure's internal regulations and shall be agreed by the Borrowers, such amount being approximately 4.133%;

"K-Sure Premium Repayment Proportion" means, in respect of a voluntary prepayment in full of the K-Sure Loan, the amount of unutilized K-Sure Premium (such amount of unutilized K-Sure Premium to be calculated by K-Sure) to be refunded to the Borrowers in the following proportions:

(a) after and including the sixth (6th) anniversary of the Final Delivery Date, 90%;

(b) from and including the fifth (5th) anniversary of the Final Delivery Date to and excluding the sixth (6th) anniversary of the Final Delivery Date, 80%;

(c) from and including the fourth (4th) anniversary of the Final Delivery Date to and excluding the fifth (5th) anniversary of the Final Delivery Date, 70%;

(d) from and including the third (3rd) anniversary of the Final Delivery Date to and excluding the fourth (4th) anniversary of the Final Delivery Date, 60%;

(e) from and including the second (2nd) anniversary of the Final Delivery Date to and excluding the third (3rd) anniversary of the Final Delivery Date, 50%; and

(f) from and including the first (1st) day following the Final Delivery Date to the second anniversary to and excluding second (2nd) anniversary of the Final Delivery Date, 40%;

"Lenders" means the K-Sure Lenders, the KEXIM Lenders and the Commercial Lenders;

"Lending Office" means, with respect to any Lender, the office of such Lender specified as its "Lending Office" under its name on Schedule 1 or in the relevant Transfer Certificate pursuant to which it became a Lender, or such other office of such Lender as such Lender may from time to time specify to the Borrowers and the Agent;

"LIBOR" means, in relation to any period for which an interest rate is to be determined under any provision of a Finance Document:

(a) the applicable Screen Rate; or

(b) if no Screen Rate is available for that period, the rate per annum determined by the Agent to be the arithmetic mean (rounded upwards to four (4) decimal places) of the rates, as supplied to the Agent at its request, quoted by each Reference Bank to leading banks in the London Interbank Market;

as of 11:00 a.m. (London time) on the Quotation Date for that period for the offering of deposits in the relevant currency and for a period comparable to that period and if LIBOR falls below zero, such rate is deemed to be zero;

"Loan"means, as the context may require, the Commercial Loan, the K-Sure Loan or the KEXIM Loan or the aggregate of any or all of them;

0103218-0000004 NY:20884372.11 17

"Loan Facility" means the KEXIM Loan Facility, the K-Sure Loan Facility or the Commercial Loan Facility;

"Loan Note" means:

(a) if requested by a Lender, in respect of the Commercial Loan Facility, a promissory note of the Borrowers, payable to the order of the Agent evidencing the aggregate indebtedness of the Borrowers under this Agreement in respect of the Commercial Loan Facility, in the Agreed Form; and

(b) if requested by a Lender, in respect of the KEXIM Loan Facility, a promissory note of the Borrowers payable to the order of the Agent, evidencing the aggregate indebtedness of the Borrowers under this Agreement in respect of the KEXIM Loan Facility, in the Agreed Form; and

(c) if requested by a Lender, in respect of the K-Sure Loan Facility, a promissory note of the Borrowers, payable to the order of the Agent evidencing the aggregate indebtedness of the Borrowers under this Agreement in respect of the K-Sure Loan Facility, in the Agreed Form;

"Major Casualty" means, in relation to a Ship, any casualty or injury caused by or to that Ship in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $4,000,000 or the equivalent in any other currency;

"Majority Lenders" means:

(a) before any Advance has been made, Lenders whose Commitments total at least 66.67% of the Total Commitments or, where the Total Commitments have been reduced to zero, Lenders whose Commitments aggregated 66.67% or more of the Total Commitments immediately before the reduction;

(b) at any other time, Lenders, the sum of whose Contributions then aggregate at least 66.67% of the aggregate amount of the Loans at such time,

provided that any Majority Lenders decision shall always include either:

(i) if there are no more than three (3) Commercial Lenders, a minimum of one (1) Commercial Lender or

(ii) if there are four (4) or more Commercial Lenders, a minimum of two (2) Commercial Lenders; and providedfurther that if a Majority Lenders decision is not made because of an objection of any Commercial Lender or Commercial Lenders and the circumstances requiring a Majority Lender decision continue for 60 days, a Majority Lender decision will be made on the basis of (a) and (b) above only regardless of the foregoing proviso.

"Manager's Undertaking" means, in relation to a Ship, the letter executed and delivered by an Approved Manager, in Agreed Form;

"Mandatory Cost" means the percentage rate per annum calculated by the Agent in accordance with Schedule 7;

"Margin" means:

0103218-0000004 NY:20884372.11 18

(a) in relation to the Commercial DNB Loan, 2.95% per annum;

(b) in relation to the KEXIM Direct Loan, 2.95% per annum;

(c) in relation to the KEXIM Guaranteed Loan, 1.90% per annum;

(d) in relation to the K-Sure 95% Policy Loan, 2.10% per annum; and

(e) in relation to the K-Sure 100% Policy Loan, 2.00% per annum.    

"Margin Regulations" means Regulations U and X issued by the Board of Governors of the United States Federal Reserve System and any successor regulations thereto, as in effect from time to time;

"Margin Stock" means "margin stock" or "margin securities" as defined in the Margin Regulations;

"Market Disruption Event" has the meaning given in Clause 5.8;

"Market Disruption Notice" has the meaning given in Clause 5.9;

"Material Adverse Effect" means any condition or circumstance which the Lenders shall determine has had, or could reasonably be expected to have, a material adverse effect:

(a) on the rights or remedies of any the Creditor Parties under any of the Finance Documents or in respect of the Collateral taken as a whole;

(b) on the performance of any of the Security Parties, or the Security Parties taken as a whole, to perform its or their obligations under any of the Finance Documents;

(c) with respect to the loan facilities contemplated by this Agreement; or

(d) on the business, property, assets, nature of assets, operations, liabilities or condition (financial or otherwise) of (i) the Guarantor, or (ii) the other Security Parties (taken as a whole);

"Maturity Date" means the Commercial Loan Maturity Date, the KEXIM Loan Maturity Date or the K-Sure Loan Maturity Date, as the case may be;

"Maximum Advance" means, in relation to a Ship, the amount set out in the column titled "Maximum Advance (60% of Contract Price) of Schedule 6 in respect of that Ship;

"Moody's" means Moody's Investors Service, Inc., a subsidiary of Moody's Corporation, and its successors;

"Mortgage" means, in relation to a Ship, the first priority or, as the case may be, preferred ship mortgage on that Ship in Agreed Form;

"Multiemployer Plan" means, at any time, a "multiemployer plan as defined in Section 4001(a)(3) of ERISA to which the Guarantor or any subsidiary of it or any ERISA Affiliate has any liability or obligation to contribute or has within any of the six preceding plan years had any liability or obligation to contribute;

"Net Debt" means Consolidated Funded Debt less cash and Cash Equivalents;

"Non-indemnified Tax" means:

0103218-0000004 NY:20884372.11 19

(a) any tax on the net income of a Creditor Party (but not a tax on gross income or individual items of income), whether collected by deduction or withholding or otherwise, which is levied by a taxing jurisdiction which:

(i) is located in the country under whose laws such entity is formed (or in the case of a natural person is a country of which such person is a citizen); or

(ii) with respect to any Lender, is located in the country of its Lending Office; or

(iii) with respect to any Creditor Party other than a Lender, is located in the country from which such party has originated its participation in this transaction;

(b) any FATCA Deduction made on account of a payment to a FATCA Non-Exempt Party;

"Notifying Lender" has the meaning given in Clause 24.1 or Clause 25.1 as the context requires;

"Obligor" means the Guarantor and each Borrower;

pari passu, when used with respect to the ranking of any Financial Indebtedness of any person in relation to other Financial Indebtedness of such person, means that each such Financial Indebtedness:

(a) (i) is not subordinated in right of payment to any other Financial Indebtedness of such person or (ii) is subordinate in right of payment to the same Financial Indebtedness of such person as is such other Financial Indebtedness and is so subordinate to the same extent; and

(b) is not subordinate in right of payment to the other or to any Financial Indebtedness of such person as to which such other Financial Indebtedness is not so subordinate;

"OFAC" means the Office of Foreign Assets Control of the United States Department of the Treasury (or any successor thereto).

"PATRIOT Act" means the United States Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Improvement and Reauthorization Act of 2005 (H.R. 3199);

"Payment Currency" has the meaning given in Clause 22.4;

"Permitted Security Interests" means:

(a) Security Interests disclosed in writing to the Agent prior to the signing of this Agreement and acceptable to the Lenders;

(b) Security Interests created by the Finance Documents;

(c) Security Interests for unpaid but not past due master's and crew's wages in accordance with usual maritime practice;

(d) Security Interests for salvage;

(e) Security Interests arising by operation of law for not more than 2 months' prepaid hire under any charter or other contract of employment in relation to a Ship not otherwise prohibited by this Agreement or any other Finance Document;

0103218-0000004 NY:20884372.11 20

(f) Security Interests for master's disbursements incurred in the ordinary course of trading and any other Security Interests arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of a Ship, provided such Security Interests do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the Guarantor or the Borrower that owns such Ship in good faith by appropriate steps);

(g) any Security Interest created in favor of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses where the Guarantor or the Borrower that owns the relevant Ship is actively prosecuting or defending such proceedings or arbitration in good faith and such Security Interest does not (and is not likely to) result in any sale, forfeiture or loss of a Ship;

(h) Security Interests arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made;

(i) pledges of certificates of deposit or other cash collateral securing any Security Party's reimbursement obligations in connection with letters of credit now or hereafter issued for the account of such Security Party in connection with the establishment of the financial responsibility of such Security Party under 33 C.F.R. Part 130 or 46 C.F.R. Part 540, as the case may be, as the same may be amended or replaced;

(j) Security Interests to secure obligations under workmen's compensation laws or similar legislation, deposits to secure public or statutory obligations, warehousemen's or other like liens, or deposits to obtain the release of such liens and deposits to secure surety, appeal or customs bonds on which the Guarantor or a Borrower is the principal, as to all of the foregoing, only to the extent arising and continuing in the ordinary course of business;

(k) Security Interests for loss, damage or expense which are fully covered by insurance, subject to applicable deductibles satisfactory to the Agent; and

(l) Security Interests incidental to the conduct of the business of each Security Party or the ownership of such Security Party's property and assets, which Security Interests do not in the aggregate materially detract from the value of each such Security Party's property or assets or materially impair the use thereof in the operation of its business;

"Pertinent Document" means:

(a) any Finance Document;

(b) any policy or contract of insurance contemplated by or referred to in Clause 13 or any other provision of this Agreement or another Finance Document;

(c) any other document contemplated by or referred to in any Finance Document; and

(d) any document which has been or is at any time sent by or to a Servicing Bank in contemplation of or in connection with any Finance Document or any policy, contract or document falling within paragraphs (b) or (c);

"Pertinent Jurisdiction," in relation to a company, means:

(a) the jurisdiction under the laws of which the company is incorporated or formed;

0103218-0000004 NY:20884372.11 21

(b) a jurisdiction in which the company has the center of its main interests or in which the company's central management and control is or has recently been exercised;

(c) a jurisdiction in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;

(d) a jurisdiction in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a branch or permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; or

(e) a jurisdiction the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company whether as a main or territorial or ancillary proceedings or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (a) or (b) above;

"Pertinent Matter" means:

(a) any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or

(b) any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a),

and covers any such transaction, matter or statement, whether entered into, arising or made at any time before the signing of this Agreement or on or at any time after that signing;

"Plan" means any employee benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect to which the Guarantor or any subsidiary of it or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA;

"Pool Agreement" means the agreement governing the relationship of the owners of vessels participating in a vessel pool with respect to both other owners and the pool manager and which establishes how the vessel owners share and participate in the pooled revenues of the pool and the voyage and other costs thereof;

"Potential Event of Default" means an event or circumstance which, with the giving of any notice, or the lapse of time, would constitute an Event of Default;

"Pro Rata Share" means, at any time, in respect of:

(a) the Commercial Loan Facility, the proportion which the Commercial Fixed Rate Loan and the Commercial DNB Loan bear to the Commercial Loan or if no Commercial Loan is outstanding at such time, the proportion of the Commercial Fixed Rate Loan Commitments and the Commercial DNB Loan Commitments bear to the Commercial Loan Commitments;

(b) the KEXIM Loan Facility, the proportion which the KEXIM Direct Loan and the KEXIM Guaranteed Loan bear to the KEXIM Loan or if no KEXIM Loan is outstanding at such time, the proportion of the KEXIM Direct Loan Commitments and the KEXIM Guaranteed Loan Commitments bear to the KEXIM Loan Commitments;

0103218-0000004 NY:20884372.11 22

(c) the K-Sure Loan Facility, the proportion which the K-Sure 95% Policy Loan and the K‑Sure 100% Policy Loan bear to the K-Sure Loan or if no K-Sure Loan is outstanding at such time, the proportion of the K-Sure 95% Policy Loan Commitments and the K-Sure 100% Policy Loan Commitments bear to the K-Sure Loan Commitments;

"Proportionate Share" means, at any time, in respect of the Commercial Loan, the K-Sure Loan or the KEXIM Loan, the proportion which the Commercial Loan, K-Sure Loan or the KEXIM Loan, as applicable, bear to the Loans or if there are no Loans outstanding at such time, the proportion the Commercial Loan Commitments, K-Sure Loan Commitments or the KEXIM Loan Commitments, as applicable, bear to the Total Commitments;

"Quotation Date" means, in relation to any period for which an interest rate is to be determined under any provision of a Finance Document, the day which is 2 Business Days before the first day of that period, unless market practice differs in the London Interbank Market for a currency, in which case the Quotation Date will be determined by the Agent in accordance with market practice in the London Interbank Market (and if quotations would normally be given by leading banks in the London Interbank Market on more than one day, the Quotation Date will be the last of those days);

"Rating Agencies" means:

(a) S&P and Moody's; or

(b) if S&P or Moody's or both of them are not making ratings of securities publicly available, a nationally recognized United States rating agency or agencies, as the case may be, selected by the Agent with the prior written consent of the Majority Lenders, which will be substituted for S&P or Moody's or both, as the case may be;

"Rating Category" means:

(a) with respect to S&P, any of the following categories (any of which may include a "+" or "-"): AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent successor categories);

(b) with respect to Moody's, any of the following categories: Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent successor categories); and

(c) the equivalent of any such categories of S&P or Moody's used by another Rating Agency, if applicable;

"Reference Banks" means, subject to Clause 27.16, DNB Bank ASA, New York Branch, and/or such other banks as may be appointed by the Agent (with the prior written consent of the Majority Lenders), in consultation with the Borrowers;

"Refinanced Loan Maturity Date" means, if the Commercial Loan is refinanced, the maturity date of such refinanced Commercial Loan;

"Relevant Amount" means, at any time, in respect of a Ship an amount calculated as the higher of:

(a) P multiplied by (y divided by z)

P = aggregate principal amount of the Loans outstanding at such time;

0103218-0000004 NY:20884372.11 23

y = the latest Fair Market Value of the relevant Ship or in respect of a Ship being sold the higher of the latest Fair Market Value and the Contract Price of the Ship being sold;

z = the aggregate of the latest Fair Market Value for each Ship then financed under the Loan Agreement, including the relevant Ship; and

(b) the aggregate of the outstanding amount of all Advances in respect of the relevant Ship.

"Relevant Borrower" means, in relation to a Ship, the entity listed in the column titled "Relevant Borrower" in Schedule 6 in respect of that Ship;

"Repayment Date" means a date on which a repayment is required to be made under Clause 8;

"Requisition Compensation" includes all compensation or other moneys payable by reason of any act or event such as is referred to in paragraph (b) of the definition of Total Loss;

"Restricted Party" means a person:

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

(b) located in or incorporated under the laws of any country or territory that is the target of comprehensive, country- or territory-wide Sanctions Laws;

(c) that is directly or indirectly owned or controlled by, or acting on behalf of, a person referred to in (a) and/or (b) above; or

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

"S&P" means Standard & Poor's Ratings Services, a division of The McGraw Hill Companies Inc., and its successors;

"Sanctions Authorities" means the Norwegian State, the United Nations, the European Union, the member states of the European Union, the United States of America, including without limitation OFAC, any authority of any other Pertinent Jurisdiction, and any authority acting on behalf of any of them in connection with Sanctions Laws;

"Sanctions Laws"means the economic or financial sanctions laws and/or regulations, trade embargoes, prohibitions, restrictive measures, decisions, Executive Orders or notices from regulators implemented, adapted, imposed, administered, enacted and/or enforced by any Sanctions Authority;

"Sanctions List" means any list of persons or entities published in connection with Sanctions Laws by or on behalf of any Sanctions Authority;

"SCM" means Scorpio Commercial Management S.A.M., a Monaco company, as commercial manager of the Ships;

"Screen Rate" means, in relation to any period for which an interest rate is to be determined under any provision of a Finance Document (which, in the case of any Interest Period under the KEXIM Direct Loan shall always be 3 months), the London interbank offered rate administered by the ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the

0103218-0000004 NY:20884372.11 24

relevant currency and period displayed on the appropriate page of the Reuters screen. If the agreed page is replaced or service ceases to be available, the Agent may specify another page or service displaying the appropriate rate after consultation with the Guarantor and the Majority Lenders;

"Secured Liabilities" means all liabilities which the Security Parties or any of them have, at the Effective Date or at any later time or times, under or in connection with any Finance Document or any judgment relating to any Finance Document and for these purposes, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country;

"Securities Act" means the United States Securities Act of 1933, as amended, and any successor act thereto, and (unless the context otherwise requires) includes the rules and regulations of the Commission promulgated thereunder;

"Security Interest" means:

(a) a mortgage, encumbrance, charge (whether fixed or floating) or pledge, any maritime or other lien or privilege or any other security interest of any kind;

(b) the security rights of a plaintiff under an action in rem; and

(c) any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution;

"Security Party" means the Borrowers, the Guarantor and any other person (except a Creditor Party and an Approved Manager) who, as a surety, guarantor, mortgagor, assignor or pledgor, as a party to any subordination or priorities arrangement, or in any similar capacity, executes a Finance Document;

"Security Period" means the period commencing on the Effective Date and ending on the date on which the Agent notifies the Borrowers that:

(a) all amounts which have become due for payment by the Borrowers or any other Security Party under the Finance Documents have been irrevocably and unconditionally paid in full;

(b) no amount is owing or has accrued (without yet having become due for payment) under any Finance Document; and

(c) no Borrower or any other Security Party has any liability under Clause 21, 22 or 23 or any other provision of this Agreement or another Finance Document;

"Seller" means, in relation to a Ship, the company named in the Approved Acquisition Contract for that Ship as the Approved Builder thereof;

"Seller's Bank" has the meaning given in Clause 9.3(b);

"Servicing Bank" means the Agent, the Security Trustee or the K-Sure Agent as the context may require;

"Shares Pledge" means a pledge of the Equity Interests of each Borrower, in Agreed Form;

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"Ship" means any ship listed in Schedule 6 to be purchased by the Relevant Borrower who will be the owner thereof and registered in its ownership under an Approved Flag;

"SSM" means Scorpio Ship Management S.A.M., a Monaco company;

"Total Commitments" means the aggregate of the Commercial Loan Commitments, the K-Sure Loan Commitments and the KEXIM Loan Commitments, or any of them, as the context may require;

"Total Loss" means in relation to a Ship:

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

(b) any expropriation, confiscation, requisition or acquisition of that Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority, (excluding a requisition for hire for a fixed period not exceeding one (1) year without any right to an extension), unless it is within 3 months redelivered to the full control of the Borrower owning that Ship; or

(c) any arrest, capture, seizure or detention of that Ship (including any hijacking, piracy or theft) unless it is within 3 months redelivered to the full control of the Borrower owning that Ship;

"Total Loss Date" means in relation to a Ship:

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

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

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

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

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

"Transfer Certificate" has the meaning given in Clause 27.2;

"Transferee Lender" has the meaning given in Clause 27.2;

"Transferor Lender" has the meaning given in Clause 27.2;

"UCC" means the Uniform Commercial Code of the State of New York;

"Voting Stock" of any person as of any date means the Equity Interests of such person that are at the time entitled to vote in the election of the board of directors or similar governing body of such person.

1.2 Construction of certain terms

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In this Agreement:

an Event of Default being continuing means it has not been waived;

"approved" means, for the purposes of Clause 13, approved in writing by the Agent with the prior written consent of the Majority Lenders (such approval not to be unreasonably withheld or delayed);

"asset" includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment;

"company" includes any corporation, limited liability company, partnership, joint venture, unincorporated association, joint stock company and trust or any other entity (whether or not having separate legal personality);

"consent" includes an authorization, consent, approval, resolution, license, exemption, filing, registration, notarization and legalization;

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

"document" includes a deed; also a letter, Email or fax;

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

"expense" means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value added or other tax;

"law" includes any, judgment, order, law (including common law), or decree, any form of delegated legislation, any treaty or international convention and any statute, directive, regulation or resolution of the Republic of Korea, Norway, the United States of America, any state thereof, the United Kingdom, the Council of the European Union, the European Commission, the United Nations or its Security Council or any other Pertinent Jurisdiction;

"legal or administrative action" means any legal proceeding or arbitration and any administrative or regulatory action or investigation;

"liability" includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or otherwise;

"months" shall be construed in accordance with Clause 1.3;

"obligatory insurances" means, in relation to a Ship, all insurances effected, or which the Borrower owning that Ship is obliged to effect, under Clause 13 or any other provision of this Agreement or another Finance Document;

"parent company" has the meaning given in Clause 1.4;

"person"includes natural persons; any company; any state, government, political sub-division of a state or government and any local or municipal authority; and any international organization;

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

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

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

"subsidiary" has the meaning given in Clause 1.4;

"successor" includes any person who is entitled (by assignment, novation, merger or otherwise) to any other person's rights under this Agreement or any other Finance Document (or any interest in those rights) or who, as administrator, liquidator or otherwise, is entitled to exercise those rights; and in particular references to a successor include a person to whom those rights (or any interest in those rights) are transferred or pass as a result of a merger, division, reconstruction or other reorganization of it or any other person;

"tax" includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any country, any state, any political sub-division of a state or any local or municipal authority or any other governmental authority authorized to levy such tax (including any such imposed in connection with exchange controls), and any related penalties, interest or fines; and

"war risks" includes war and allied perils, the risk of mines, terrorism, piracy, hijacking, confiscation, blocking and trapping, protection and indemnity war risks (with a separate limit not less than hull value) and all risks excluded by clause 29 of the Institute Hull Clauses (1/11/02 or 1/11/03) or clause 24 of the Institute Time clauses (Hulls) (1/11/1995) or clause 23 of the Institute Time Clauses (Hulls) (1/10/83).

1.3 Meaning of month

A period of one or more "months" ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started (the numerically corresponding day), but:

(a) on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or

(b) on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day,

and "month" and "monthly" shall be construed accordingly.

1.4 Meaning of subsidiary

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A company (S) is a subsidiary of another company (P) if:

(a) a majority of the issued Equity Interests in S (or a majority of the issued Equity Interests in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or

(b) P has direct or indirect control over a majority of the voting rights attaching to the issued Equity Interests of S; or

(c) P has the direct or indirect power to appoint or remove a majority of the directors (or equivalent) of S; or

(d) P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P;

and any company of which S is a subsidiary is a parent company of S.

1.5 General interpretation

In this Agreement:

(a) references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the Effective Date or otherwise;

(b) references in Clause 1.1 to a document being in Agreed Form include references to that form with any modifications to that form which the Agent approves or reasonably requires with the prior written consent of all of the Lenders and K-Sure and which are acceptable to the Guarantor;

(c) references to, or to a provision of, any law or regulation include any amendment, extension, re-enactment or replacement, whether made before the Effective Date or otherwise;

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

(e) Clauses 1.1 to 1.5 apply unless the contrary intention appears.

1.6 Headings

In interpreting a Finance Document or any provision of a Finance Document, all clause, subclause and other headings in that and any other Finance Document shall be entirely disregarded.

1.7 Accounting terms

Unless otherwise specified herein, all accounting terms used in this Agreement and in the other Finance Documents shall be interpreted, and all financial statements and certificates and reports as to financial matters required to be delivered to any Creditor Party under this Agreement shall be prepared, in accordance with GAAP as from time to time in effect.

1.8 Inferences regarding materiality

To the extent that any representation, warranty, covenant or other undertaking of a Security Party in this Agreement or any other Finance Document is qualified by reference to those matters which are not reasonably expected to result in a "material adverse effect" or language of similar import, no inference

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shall be drawn therefrom that any Creditor Party has knowledge or approves of any noncompliance by such Security Party with any law or regulation.

1.9 Conflict with K-Sure Insurance Policy

In the event of conflict between the terms of any Finance Document and any K-Sure Insurance Policy, as between K-Sure, the Borrowers, the Guarantor and the K-Sure Lenders the terms of the relevant K-Sure Insurance Policy shall prevail, and to the extent of such conflict or inconsistency none of those Creditor Parties shall assert to K-Sure the terms of the relevant Finance Documents.

2. FACILITY

2.1 Amount of facility

Subject to the other provisions of this Agreement, the Lenders severally (and not jointly) agree to make available to the Borrowers (on a joint and several basis) a loan facility to be advanced to the Borrowers in accordance with Clause 4 in the aggregate principal amount of up to $411,264,000 as follows:

(a) the Commercial Loan Facility, in a principal amount of up to $91,264,000, which is comprised of:

(i)    the Commercial DNB Loan Commitment; and

(ii)    the Commercial Fixed Rate Loan Commitment;

(b) the KEXIM Loan Facility, in a principal amount of up to $160,000,000, which is comprised of:

(i)    the KEXIM Direct Loan Facility, in a principal amount of up to $85,000,000; and

(ii)    the KEXIM Guaranteed Loan Facility, in a principal amount of up to $75,000,000;

(c) the K-Sure Loan Facility, in a principal amount of up to $160,000,000,

provided that, the aggregate amount (in Dollars) of the Commercial Loan Facility, the KEXIM Loan Facility and the K-Sure Loan Facility shall not exceed the lower of (i) 60% of the total Contract Price or (ii) 60% of the aggregate Fair Market Value of the Ships on or 10 days prior to the Delivery Date of each of the first, fourth, eighth and twelfth Ships to be delivered.

2.2 Lenders' participations in Advances

Subject to the other provisions of this Agreement:

(c) each Commercial Lender shall participate in each Commercial Loan Advance in accordance with its Pro Rata Share as at the relevant Drawdown Date;

(d) each KEXIM Lender shall participate in each KEXIM Loan Advance in accordance with its Pro Rata Share as at the relevant Drawdown Date; and

(e) each K-Sure Lender shall participate in each K-Sure Loan Advance in accordance with its Pro Rata Share as at the relevant Drawdown Date.

2.3 Purpose of Advances

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The Borrowers undertake with each Creditor Party to use each Advance only for the purposes stated in the Recitals of this Agreement.

2.4 No Obligation to monitor

No Creditor Party is obliged to monitor or verify the application of any Advance.

2.5 Cancellation of Total Commitments

Any portion of the Total Commitments not disbursed to the Borrowers shall be cancelled and terminated automatically on the expiration of the Availability Period.

2.6 Joint and Several Liability

(a) All obligations, covenants, representations, warranties and undertakings in or pursuant to the Finance Documents assumed, given, made or entered into by the Obligors shall, unless otherwise expressly provided, be assumed, given, made or entered into by the Obligors jointly and severally. The failure by an Obligor to perform its obligations under the Finance Documents shall constitute a failure by the other Obligors in the performance of its obligations under the Finance Documents. Each Obligor shall be responsible for the performance of the obligations of the other Obligors under the Finance Documents;

(b) The Creditor Parties may, but only through the Agent or the Security Trustee, take action against any of the Obligors and/or release or compromise in whole or in part the liability of the other Obligors under this Agreement or any other Finance Document or grant any time or other indulgence to any of the Obligors, in each case without affecting the liability of the other Obligors;

(c) Each Obligor agrees to be bound by the Finance Documents to which it is, or is to be, a party notwithstanding that the other Obligors which are intended to sign or to be bound may not do so or be effectually bound and notwithstanding that any of the Finance Documents may be invalid or unenforceable against the other Obligors, whether or not the deficiency is known to any Creditor Party;

(d) None of the obligations or liabilities of the Obligors under this Agreement or any other Finance Document shall be discharged or reduced by reason of:

(i) the insolvency, liquidation, dissolution, winding-up, administration, receivership, amalgamation, reconstruction or other incapacity of any person whatsoever or any change of name or style or constitution of an Obligor or any other person liable;

(ii) any Creditor Party granting any time, indulgence or concession to, or compounding with, discharging, releasing or varying the liability of, an Obligor or any other person liable or renewing, determining, varying or increasing, any accommodation, facility or transaction or otherwise dealing with the same in any manner whatsoever, or concurring in, accepting, varying any compromise, arrangement or settlement or omitting to claim or enforce payment from an Obligor or any other person liable; or

(iii) anything done or omitted which but for this provision might operate to exonerate the Obligors or any of them;

(e) Each Obligor agrees that any rights which it may have at any time during the term of the Facility by reason of the performance of its obligations under the Finance Documents to be indemnified by any other Obligor and/or to take the benefit of any security taken by the Agent pursuant to the Finance Documents shall be exercised in such manner and on such terms as the Agent may require or as provided

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in this Agreement. Each of the Obligor agrees to hold any sums received by it as a result of its having exercised any such right on trust for the Agent absolutely; and

(f) Each Obligor agrees that it will not at any time during the term of the Facility claim any set off or counterclaim against any other Obligor in respect of any liability owed to it by that other Obligor under or in connection with the Finance Documents, nor prove in competition with any of the Creditor Parties in any liquidation of (or analogous proceeding in respect of) any other Obligor in respect of any payment made under the Finance Documents or in respect of any sum which includes the proceeds of realisation of any security held by the Agent for the repayment of the Loans.

(g) The obligations of each Borrower under this Agreement shall constitute absolute, unconditional and irrevocable financial obligations of such Borrower to the Creditor Parties. Such obligations are independent and separate obligations to be performed or enforced irrespective of whether or not any person has performed its obligations under the Approved Acquisition Contract to which it is a party.

3. POSITION OF THE LENDERS AND K-SURE

3.1 Interests several

The rights of the Lenders under this Agreement are several.

3.2 Individual right of action

Notwithstanding Clause 2.6(b), each Lender shall be entitled to sue for any amount which has become due and payable by a Security Party to it under this Agreement without joining the Agent, the Security Trustee or any other Lender as additional parties in the proceedings, provided that any such proceedings may only be brought before the New York State court or the Federal court of the United States of America sitting in New York County.

3.3 Proceedings requiring Majority Lender consent

Except as provided in Clause 3.2, no Lender may commence proceedings against any Security Party in connection with a Finance Document without the prior consent of the Majority Lenders.

3.4 Obligations several

The obligations of the Lenders under this Agreement are several; and a failure of any Lender to perform its obligations under this Agreement shall not result in:

(a) the obligations of the other Lenders being increased; nor

(b) any Security Party or any other Lender being discharged (in whole or in part) from its obligations under any Finance Document,

(c) and in no circumstances shall any Lender have any responsibility for a failure of another Lender to perform its obligations under this Agreement.

3.5 K-Sure

Each party to this Agreement agrees that:

(h) K-Sure shall not have any obligations or liabilities under this Agreement;

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(i) K-Sure shall be a third party beneficiary of the terms of this Agreement and the rights expressed to be for its benefit or exercisable by it under this Agreement; and

(j) this Agreement may not be amended to negatively affect, limit, modify or eliminate any rights of K-Sure without its prior written consent.

3.6 Replacement of a Lender

(a) If at any time:

(i) any Commercial Lender becomes a Non-Consenting Lender (as defined in paragraph (c) below); or

(ii) the Borrowers or any other Security Party become obliged in the absence of an Event of Default to repay any amount in accordance with Clause 24 or to pay additional amounts pursuant to Clause 23 or Clause 25 to any Commercial Lender in excess of amounts payable to other Commercial Lenders generally,

then the Borrowers may, on 30 Business Days' prior written notice to the Agent and such Lender, replace such Commercial Lender by requiring such Commercial Lender to (and such Commercial Lender shall) transfer pursuant to Clause 27 all (and not part only) of its rights and obligations under this Agreement to a Commercial Lender or other bank, financial institution, fund or other entity (a "Replacement Lender") selected by the Borrowers (other than any Affiliate or subsidiary of the Guarantor), which is acceptable to the Agent with the consent of the Majority Lenders (other than the Commercial Lender the Borrowers desire to replace), which confirms its willingness to assume and by its execution of a Transfer Certificate does assume all the obligations of the transferring Commercial Lender (including the assumption of the transferring Commercial Lender's participations on the same basis as the transferring Commercial Lender) for a purchase price in cash payable at the time of transfer equal to the outstanding principal amount of such Commercial Lender's participation in the outstanding Advances and all accrued interest and/or breakages costs and other amounts payable in relation thereto under the Finance Documents.

(b) The replacement of a Commercial Lender pursuant to this Clause 3.6 shall be subject to the following conditions:

(i) neither the Borrowers nor the Guarantor shall have any right to replace the Agent or the Security Trustee in such capacities;

(ii) neither the Agent nor any Lender shall have any obligation to the Borrowers or the Guarantor to find a Replacement Lender but nothing contained herein shall preclude them from doing so;

(iii) in the event of a replacement of a Non-Consenting Lender such replacement must take place no later than 30 days after the date the Borrowers notify the Non-Consenting Lender and the Agent of its intent to replace the Non-Consenting Lender pursuant to Clause 3.6(a), and in the event such replacement takes place on a date other than an anniversary date, the Borrowers shall reimburse a Lender providing a Commercial Fixed Rate Loan for any breakage costs payable by such Lender pursuant to any currency swap entered into by such Lender; and

(iv) in no event shall the Commercial Lender replaced under this Clause 3.6 be required to pay or surrender to such Replacement Lender any of the fees received by such Commercial Lender pursuant to the Finance Documents.

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(c) For purposes of this Clause 3.6, in the event that:

(iv) the Borrowers have or the Agent has requested the Lenders to give a consent in relation to or to agree to a waiver or amendment of any provisions of the Finance Documents;

(v) the consent, waiver or amendment in question requires the approval of all Lenders; and

(vi) Lenders whose Commitments aggregate more than 66.67% percent of the Total Commitments have consented to or agreed to such waiver or amendment,

then any Commercial Lender who does not and continues not to consent or agree to such waiver or amendment shall be deemed a "Non-Consenting Lender".

4. DRAWDOWN

4.1 Request for Advances

Subject to the following conditions, the Borrowers may request an Advance to be made under each of the KEXIM Loan Facility, the K-Sure Loan Facility and the Commercial Loan Facility by delivering to the Agent a completed Drawdown Notice not later than 11:00 a.m. (New York City time) 5 Business Days prior to the intended Drawdown Date.

4.2 Availability

The conditions referred to in Clause 4.1 are that:

(f) the Drawdown Date must be:

(vii) a Business Day during the Availability Period; and

(viii) at least one (1) Business Day, and not more than 4 Business Days, prior to the scheduled Delivery Date of the relevant Ship.

(g) each of the Commercial Loan Facility, K-Sure Loan Facility and the KEXIM Loan Facility shall be made available to the Borrowers in multiple Advances for the purpose stated in Recital (A) provided that the aggregate amount of the Advances requested in one Drawdown Notice, in respect of the partial financing of the purchase price of a Ship, shall not exceed the lesser of (i) the Maximum Advance, (ii) 60% of the Fair Market Value of the relevant Ship and (iii) 60% of the Contract Price of the relevant Ship;

(h) the aggregate amount requested to be advanced under a Drawdown Notice will be allocated by the Agent between (i) the Commercial Loan Facility, the K-Sure Loan Facility and the KEXIM Loan Facility in the Proportionate Shares; and (ii) the KEXIM Direct Loan and the KEXIM Guaranteed Loan; the Commercial DNB Loan and the Commercial Fixed Rate Loan; and the K-Sure 95% Policy Loan and K-Sure 100% Policy Loan in their Pro Rata Shares;

(i) the aggregate outstanding principal amount of Advances (including the requested Advances) shall not exceed the Total Commitments;

(j) the aggregate outstanding principal amount of all Commercial Loan Advances (including the requested Commercial Loan Advances) shall not exceed the Commercial Loan Commitments;

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(k) the aggregate outstanding principal amount of all KEXIM Direct Loan Advances (including the requested KEXIM Direct Loan Advances) shall not exceed the KEXIM Direct Loan Commitments;

(l) the aggregate outstanding principal amount of all KEXIM Guaranteed Loan Advances (including the requested KEXIM Guaranteed Loan Advances) shall not exceed the KEXIM Guaranteed Loan Commitments;

(m) the aggregate outstanding principal amount of all K-Sure Loan Advances (including the requested K-Sure Loan Advances) shall not exceed the K-Sure Loan Commitments;

(n) there shall only be one (1) Advance per delivery of each Ship; and

(o) the applicable conditions precedent stated in Clause 9 hereof shall have been satisfied or waived as provided therein.

Notwithstanding the provisions of Clause 4.2(b) above, it is acknowledged and agreed by the parties to this Agreement that in the event that the Borrowers pay in excess of 40% (the "Equity Contribution") of the contract price stated in the Approved Acquisition Contract in respect of a Ship, the amount of the relevant Advance shall remain at the Maximum Advance and the Borrowers shall be permitted to reimburse themselves from such Advance so that the Equity Contribution is reduced to (but not less than) 40% of such contract price.

4.3 Notification to Lenders of receipt of a Drawdown Notice

The Agent shall promptly notify the Lenders that it has received a Drawdown Notice and shall inform each Lender of:

(d) the amount of the Advance, the Drawdown Date and the scheduled Delivery Date;

(e) the amount of that Lender's participation in the Advance; and

(f) the duration of the first Interest Period.

4.4 Drawdown Notice irrevocable

A Drawdown Notice must be signed by an officer or a duly authorized attorney-in-fact of the Relevant Borrower and once served, a Drawdown Notice cannot be revoked or varied without the prior consent of the Agent, acting on the authority of the Majority Lenders.

4.5 Lenders to make available Contributions

Subject to the provisions of this Agreement, each Lender shall, before 11:00 a.m. (New York City time) on and with value on the Drawdown Date, make available to the Agent for the account of the Relevant Borrower the amount due from that Lender under Clause 2.2.

4.6 Disbursement of Advance

Subject to the provisions of this Agreement, the Agent shall on the Drawdown Date pay in accordance with the provisions of Clause 9.3 the amounts which the Agent receives from the Lenders under Clause 4.5, the Relevant Borrower shall at that time become indebted, as principal and direct obligor, to each

0103218-0000004 NY:20884372.11 35

Lender in an amount equal to that Lender's Contribution and that payment to the Relevant Borrower shall be made:

(a) to the account which the Relevant Borrower specified in the Drawdown Notice; and

(b) in the like funds as the Agent received the payments from the Lenders.

The payment by each Lender under Clause 4.5 shall constitute the making of an Advance and the Borrowers shall at that time become indebted, as principal and direct obligors, to each Lender in an amount equal to that Lender's Contribution.

4.7 Promissory notes

(a) Upon the request of any Lender made through the Agent, the Borrowers shall execute and deliver to the Agent a Loan Note for such Lender, which shall evidence the obligation of the Borrowers to pay the principal of, and interest on, each such Lender’s Loan, each of which Loan Notes shall be dated the date of the first Drawdown Date.

(b) Each Advance made by the Lenders to the Borrowers may be evidenced by a notation of the same made by the Agent on the grid attached to the relevant Loan Note, which notation, absent manifest error, shall be prima facie evidence of the amount of such Advance.

(c) Each Lender shall record on its internal records the amount of its Contribution in each Advance and each payment in respect thereof, and the unpaid balance of such Contribution in such Advance shall, absent manifest error and to the extent not inconsistent with the notations made by the Agent on the grid attached to the relevant Loan Note, be as so recorded.

(d) The failure of the Agent or any Lender to make any such notation shall not affect the obligations of the Borrowers in respect of such Advance or the relevant Loan nor affect the validity of any transfer by the Agent of a Loan Note.

(e) On receipt of satisfactory evidence that a Loan Note has been lost, mutilated or destroyed and on surrender of the remnants thereof, if any, the Borrowers will promptly replace such Loan Note, without charge to the Creditor Parties, with a similar Loan Note. If such replacement Loan Note replaces a lost Loan Note it shall bear an endorsement to that effect. Any lost Loan Note subsequently found shall be surrendered to the Borrowers and cancelled. In the event that the Agent loses a Loan Note, the Agent shall indemnify the Borrowers for any losses, claims or damages resulting from the loss of such Loan Note.

5. INTEREST

5.1 Normal rate of interest

(p) Subject to Clause 5.1(b) below and the other provisions of this Agreement the rate of interest on an Advance (other than the Commercial Fixed Rate Loan Advance) in respect of an Interest Period shall be the aggregate of:

(i) LIBOR for that Interest Period; plus

(ii) the applicable Margin for said Advance; plus

(iii) the Mandatory Cost (if any).

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(q) Subject to the provisions of this Agreement the rate of interest on a Commercial Fixed Rate Loan Advance shall be six point two-five per cent (6.25%) per annum.

5.2 Payment of normal interest

Subject to Clause 5.3 and the other provisions of this Agreement, interest on each Advance in respect of each Interest Period shall be paid by the Borrowers on the last day of that Interest Period.

5.3 Payment of accrued interest

In the case of an Interest Period longer than 3 months, accrued interest shall be paid every 3 months during that Interest Period and on the last day of that Interest Period.

5.4 Notification of Interest Periods and rates of normal interest

The Agent shall notify the Borrowers and each Lender of:

(d) each rate of interest; and

(e) the duration of each Interest Period (as determined under Clause 6.2), as soon as reasonably practicable after each is determined.

5.5 Obligation of Reference Banks to quote

A Reference Bank which is a Lender shall use all reasonable efforts to supply the quotation required of it for the purposes of fixing a rate of interest under this Agreement.

5.6 Absence of quotations by Reference Banks

If any Reference Bank fails to supply a quotation, the Agent shall determine the relevant LIBOR on the basis of the quotations supplied by the other Reference Bank or Banks but if two (2) or more of the Reference Banks fail to provide a quotation, the relevant rate of interest shall be set in accordance with the following provisions of this Clause 5.

5.7 Market disruption

The following provisions of this Clause 5 apply if any one of the following events occurs (each, a "Market Disruption Event"):

(a) no Screen Rate is available for an Interest Period and two (2) or more of the Reference Banks do not, before 1:00 p.m. (London time) on the Quotation Date, provide quotations to the Agent in order to fix LIBOR; or

(b) at least one (1) Business Day before the start of an Interest Period, Lenders having Contributions together amounting to more than 50% of a Loan (or, if an Advance has not been made, Commitments amounting to more than 50% of the relevant Total Commitments) notify the Agent that the cost to those Lenders of funding their respective Contributions (or any part of them) from whatever source such Lenders may reasonably select during the Interest Period in the London Interbank Market at or about 11:00 a.m. (London time) on the Quotation Date for the Interest Period would exceed the LIBOR fixed by the Agent for that Interest Period.

5.8 Notification of market disruption

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If a Market Disruption Event shall have occurred, the Agent shall promptly notify the Borrowers and each of the Lenders stating the circumstances falling within Clause 5.7 which have caused its notice (a "Market Disruption Notice") of such Market Disruption Event to be given; provided that the level of detail of the Market Disruption Notice shall be in the Agent's sole discretion and the Market Disruption Notice itself shall, absent manifest error, be final, conclusive and binding on all parties hereto.

5.9 Alternative rate of interest during Market Disruption Event

If a Market Disruption Event has occurred, then the rate of interest on each Lender's Contribution for the applicable Interest Period shall be the rate per annum which is the sum of:

(a) the rate notified to the Agent by that Lender (or Lenders) whose cost of funding would exceed the LIBOR fixed by the Agent for the relevant Interest Period which expresses the actual cost to that Lender (or Lenders) of funding its (or their) Contribution from whatever source it (or they) may reasonably select; plus

(b) the Margin; plus

(c) the Mandatory Cost (if any).

The alternative rate of interest agreed upon pursuant to this Clause 5.9 shall be binding on all parties hereto. The procedure provided for by this Clause 5.9 shall be repeated for each successive Interest Period during which a Market Disruption Event has occurred.

5.10 Notice of prepayment

If a Borrower does not agree with an interest rate set by the Agent under Clause 5.9, that Borrower may give the Agent not less than 30 days' notice of its intention to prepay in full all the Loans (without premium or penalty, except in the case of the KEXIM Direct Loan, in respect of which the prepayment fee specified at Clause 8.10(b) shall apply).

5.11 Prepayment; termination of Commitments

A notice under Clause 5.10 shall be irrevocable; the Agent shall promptly notify the Lenders of the Borrowers' notice of intended prepayment and:

(a) on the date on which the Agent serves that notice, the Total Commitments shall be cancelled; and

(b) on the last Business Day of the Interest Period set by the Agent, the Borrowers shall prepay (without premium or penalty except in the case of the KEXIM Direct Loan, in respect of which the prepayment fee specified at Clause 8.10(b) shall apply) in full all Loans, together with accrued interest thereon.

5.12 Application of prepayment

The provisions of Clause 8 shall apply in relation to the prepayment.

6. INTEREST PERIODS

6.1 Commencement of Interest Periods

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The first Interest Period applicable to an Advance shall commence on the relevant Drawdown Date and each subsequent Interest Period shall commence on the expiry of the preceding Interest Period.

6.2 Duration of normal Interest Periods

Subject to Clause 6.3, each Interest Period shall:

(k) in respect of the Commercial Loan and the K-Sure Loan be:

(i) 3 months or 6 months at the Borrowers' option or such other period as agreed between the Borrowers and the Agent not later than 11:00 a.m. (New York time) 3 Business Days before the commencement of the Interest Period; or

(ii) 3 months, if the Borrower fails to provide notice to the Agent of the intended Interest Period in accordance with (i) above;

(l) in respect of the KEXIM Guaranteed Loan, be 3 months for all Interest Periods and shall not be changed during the tenor of the KEXIM Guaranteed Loan;

(m) in respect of the KEXIM Direct Loan, be 3 months;

(n) in the case of the first Interest Period applicable to each Advance other than the first Advance, a period ending on the last day of the Interest Period applicable to the prior Advances then outstanding, whereupon all Advances shall be consolidated and treated as a single Advance for purposes of setting Interest Periods;

(o) 3 months, if the Borrowers fail to notify the Agent by the time specified in paragraph (a); or

(p) such other period as the Agent may, with the authorization of each relevant Lender and K-Sure agrees with the Borrowers.

6.3 Duration of Interest Periods for repayment installments

In respect of an amount due to be repaid under Clause 8 on a particular Repayment Date, an Interest Period shall end on that Repayment Date.

7. DEFAULT INTEREST

7.1 Payment of default interest on overdue amounts

Each Security Party shall jointly and severally pay interest in accordance with the following provisions of this Clause 7 on any amount payable by any Security Party under any Finance Document which the Agent, the Security Trustee or any other designated payee does not receive on or before the date, that is:

(q) the date on which the Finance Documents provide that such amount is due for payment; or

(r) if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or

(s) if such amount has become immediately due and payable under Clause 20.4, the date on which it became immediately due and payable.

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7.2 Default rate of interest

Interest shall accrue on an overdue amount from (and including) the relevant date until the date of actual payment (as well after as before judgment) at the rate per annum determined by the Agent to be 2.00% above:

(f) in the case of an overdue amount of principal, the higher of the rates set out at Clauses 7.3(a) and (b); or

(g) in the case of any other overdue amount, the rate set out at Clause 7.3(b).

7.3 Calculation of default rate of interest

The rates referred to in Clause 7.2 are:

(c) the rate of interest applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period); and

(d) the aggregate of the applicable Margin and the Mandatory Cost (if any) plus, in respect of successive periods of any duration (including at call) up to 3 months which the Agent may, with the consent of the Majority Lenders, select from time to time:

(i) LIBOR; or

(ii) if the Agent (after consultation with the Reference Banks) determines that Dollar deposits for any such period are not being made available to any Reference Bank by leading banks in the London Interbank Market in the ordinary course of business, a rate from time to time determined by the Agent by reference to the cost of funds to the Reference Banks from such other sources as the Agent (after consultation with the Reference Banks) may from time to time determine.

7.4 Notification of interest periods and default rates

The Agent shall promptly notify the Lenders and each relevant Security Party of each interest rate determined by the Agent under Clause 7.3 and of each period selected by the Agent for the purposes of paragraph (b) of that Clause; but this shall not be taken to imply that such Security Party is liable to pay such interest only with effect from the date of the Agent's notification.

7.5 Payment of accrued default interest

Subject to the other provisions of this Agreement, any interest due under this Clause shall be paid on the last day of the period by reference to which it was determined; and the payment shall be made to the Agent for the account of the Creditor Party to which the overdue amount is due.

7.6 Compounding of default interest

Any such interest which is not paid at the end of the period by reference to which it was determined shall thereupon be compounded.

8. REPAYMENT, PREPAYMENT, REDUCTION AND CANCELLATION

8.1 Repayment of the KEXIM Loan and K-Sure Loan

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The Borrowers must repay each KEXIM Loan Advance and the K-Sure Loan Advance in full by equal consecutive semi-annual repayment installments, in an amount equal to 1/24 of such KEXIM Loan Advance or K-Sure Loan Advance (equivalent to a 12 year loan profile) with the first repayment installment being payable on date falling 6 months after the relevant Delivery Date;

8.2 Repayment of the Commercial Loan Facility

(e) The Borrowers must repay each Commercial DNB Loan Advance in full by:

(i) equal consecutive semi‑annual repayment installments in an amount equal to 1/30 of such Commercial DNB Loan Advance (equivalent to a 15 year loan profile), with the first repayment installment being payable on the date falling 6 months after the relevant Delivery Date; and

(ii) a balloon installment (payable together with the final such semi-annual repayment installment under Clause 8.2(a)) in an amount equal to the outstanding principal amount of the Commercial DNB Loan on the Commercial Loan Maturity Date.

(f) The Borrowers must repay each Commercial Fixed Rate Loan Advance in full by a balloon installment in an amount equal to the outstanding principal amount of the Commercial Fixed Rate Loan on the Commercial Loan Maturity Date.

8.3 Maturity Date

On the final Maturity Date, the Borrowers shall additionally pay to the Agent for the account of the Creditor Parties all other sums then accrued or owing under any Finance Document.

8.4 Voluntary prepayment

Subject to the following conditions, the Borrowers may prepay the whole or any part of the Loans.

8.5 Conditions for voluntary prepayment

The conditions referred to in Clause 8.4 are that:

(a) a partial prepayment shall be $1,000,000 or a multiple of $1,000,000 (or such lesser amount as the Agent may approve with the prior written consent of the Majority Lenders);

(b) the Agent has received from the Borrowers at least 10 Business Days prior to the intended prepayment date written notice specifying the amount to be prepaid and the date on which the prepayment is to be made;

(c) the Borrowers have provided evidence satisfactory to the Agent that any consent required by the Borrowers or any other Security Party in connection with the prepayment has been obtained and remains in force, and that any regulation relevant to this Agreement which affects the Borrowers or any other Security Party has been complied with (which may be satisfied by the Guarantor certifying that no consents are required and that no regulations need to be complied with); and

(d) in the case of the Commercial Fixed Rate Loan, the prepayment is made on an anniversary date of the first Drawdown Date under the Commercial Fixed Rate Loan.

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8.6 Effect of notice of prepayment

A prepayment notice may not be withdrawn or amended without the consent of the Agent, given with the authorization of the Majority Lenders, and the amount specified in the prepayment notice shall become due and payable by the Borrowers on the date for prepayment specified in the prepayment notice.

8.7 Notification of notice of prepayment

The Agent shall notify the Lenders promptly upon receiving a prepayment notice, and shall provide any Lender which so requests with a copy of any document delivered by the Borrowers under Clause 8.5(c).

8.8 Application of partial prepayment

Each partial prepayment made pursuant to Clause 8.4 and each mandatory prepayment pursuant to Clause 8.9 shall be applied:

(c) against the Commercial Loan, the K-Sure Loan and the KEXIM Loan in their Proportionate Shares;

(d) against the Commercial Fixed Rate Loan, Commercial DNB Loan, KEXIM Direct Loan, KEXIM Guaranteed Loan, K-Sure 95% Policy Loan and the K-Sure 100% Policy Loan in their Pro Rata Shares; and

(e) against the remaining repayment installments in inverse order of maturity.

8.9 Mandatory prepayment and reduction

(a) If a Ship is sold or becomes a Total Loss, the Borrowers shall prepay the outstanding amount of the Loans in an amount equal to the Relevant Amount together with any Additional Prepayment Amount:

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

(ii) in the case of a Total Loss, on the earlier of the date falling 180 days after the Total Loss Date and the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss.

(b) If a Change of Control occurs:

(iii) in respect of the Guarantor, the Agent may, acting upon instructions from the Majority Lenders, by giving not less than 10 Business Days' notice, cancel any undrawn Commitments and require the repayment of all amounts outstanding together with accrued interest (and any other amount payable under Clause 22 or otherwise); or

(iv) in respect of a Borrower, the Agent may, acting upon instructions from the Majority Lenders, by giving not less than 10 Business Days' notice, (i) cancel any undrawn Commitments and (ii) require the repayment of all amounts outstanding together with accrued interest (and any other amount payable under Clause 22 or otherwise), in each case, in respect of the Ship owned by such Borrower.

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(c) If any Borrower conducts any business other than in connection with, or for the purpose of owning, chartering and operating the Ships, the Agent may, acting upon instructions from the Majority Lenders, by giving not less than 10 Business Days' notice, (i) cancel any undrawn Commitments and (ii) require the repayment of all amounts outstanding together with accrued interest (and any other amount payable under Clause 22 or otherwise), in each case, in respect of the Ship owned by such Borrower.

(d) If the Guarantor conducts any business other than in connection with or for the purpose of (directly or indirectly) owning, chartering and operating vessels, the Agent may, acting upon instructions from the Majority Lenders , by giving not less than 10 Business Days' notice, cancel any undrawn Commitments and require the repayment of all amounts outstanding together with accrued interest (and any other amount payable under Clause 22 or otherwise).

(e) The Borrowers shall prepay the whole of the relevant Advance or Advances which remain outstanding under the K-Sure Loan, together with accrued interest (and any other amount payable under Clause 22 or otherwise), and all other amounts accrued or outstanding owing to the K-Sure Lenders thereunder on demand by the Agent if, for any reason, the obligations of K-Sure under any K-Sure Insurance Policy terminate, are cancelled, suspended, rescinded or revoked or become unenforceable or otherwise cease to be in full force and effect, on the date falling no later than 30 days after the Guarantor, acting as the Borrowers' agent, receives notice that K-Sure's obligations under such K-Sure Insurance Policy have so terminated, become unenforceable or otherwise ceased to be in full force and effect.

(f) The Borrowers shall prepay the whole of the relevant Advance or Advances which remain outstanding under the KEXIM Guaranteed Loan, together with accrued interest (and any other amount payable under Clause 22 or otherwise), and all other amounts accrued or outstanding owing to the KEXIM Lenders thereunder on demand by the Agent if, for any reason, the obligations of KEXIM under the KEXIM Guarantee terminate, are cancelled, suspended, rescinded or revoked or become unenforceable or otherwise cease to be in full force and effect, on the date falling no later than 30 days after the Guarantor, acting as the Borrowers' agent, receives notice that KEXIM's obligations under the KEXIM Guarantee have so terminated, become unenforceable or otherwise ceased to be in full force and effect.

(g) In case of a mandatory prepayment outside of an anniversary date, the Guarantor shall post cash collateral in an amount equal to the pro-rata repayment of the Commercial Fixed Rate Loan Commitment. The cash collateral amount shall then be applied to repay the pro rata repayment amount of the Commercial Fixed Rate Loan Commitment on the next anniversary date.

8.10 Amounts payable on prepayment

A voluntary prepayment under Clause 8.5 and a mandatory prepayment under Clause 8.9 or Clause 15.3 shall be made together with accrued interest (and any other amount payable under Clause 22 or otherwise) in respect of the amount prepaid, and:

(a) in respect of the Commercial Loan, the K-Sure Loan and the KEXIM Guaranteed Loan without premium or penalty;

(b) in respect of the KEXIM Direct Loan (except in the case of a mandatory prepayment under Clause 15.3), with a premium equal to 0.50% of the KEXIM Direct Loan then prepaid; and

(c) in respect of the Commercial Fixed Rate Loan, 3.125% per annum for any amounts that have been cash collateralized due to a mandatory prepayment event.

8.11 Reborrowing

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No amount of a Loan repaid or prepaid may be reborrowed.

8.12 Voluntary cancellation of Total Commitments

Subject to the conditions set forth in Clause 8.13, the Borrowers may cancel the whole or any part of the Commercial Loan Commitments, the K-Sure Loan Commitments or the KEXIM Loan Commitments available to it without premium or penalty.

8.13 Conditions for voluntary cancellation of Commitments

The conditions referred to in Clause 8.12 are that:

(a) a partial cancellation shall be in the amount of $1,000,000 or a multiple of $1,000,000; and

(b) the Agent has received from the Borrowers at least 10 Business Days' prior written notice specifying the amount to be cancelled and the date on which the cancellation is to take effect.

8.14 Effect of notice of cancellation

The receipt by the Agent of a cancellation notice shall cause the amount of the Total Commitments specified in the notice to be permanently cancelled on and as of the effective date stated in such notice. Any partial cancellation shall be applied against the Commitments of each Lender pro rata and the commitment fee referred to in Clause 21.1(a) on such cancelled portion shall cease to accrue.

8.15 Notification of notice of cancellation

The Agent shall notify the Lenders promptly upon receiving a cancellation notice.

8.16 Refund of K-Sure Premium

Upon a voluntary prepayment in full under Clause 8.5, the Borrowers may request the K-Sure Agent to seek a refund by K-Sure of such portion of the K-Sure Premium paid by the Borrowers in the relevant K-Sure Premium Repayment Proportion, to the K-Sure Agent or the Agent (as the case may be), such refund shall be remitted to the Borrowers in accordance with Clause 18, provided however that neither the Agent nor the K-Sure Agent shall be obliged to take any further action if K-Sure refuses or fails for whatever reason to refund any portion of the K-Sure Premium.

8.17 Refund of KEXIM Guarantee Premium

Upon a voluntary prepayment in full under Clause 8.5, the Borrowers may request the KEXIM Guaranteed Loan Agent to seek a refund by KEXIM of such portion of the KEXIM Guarantee Premium paid by the Borrowers in the relevant KEXIM Guarantee Premium Repayment Proportion, to the KEXIM Guaranteed Loan Agent, such refund shall be remitted to the Borrowers in accordance with Clause 18, provided however that the KEXIM Guaranteed Loan Agent shall not be obliged to take any further action if KEXIM refuses or fails for whatever reason to refund any portion of the KEXIM Guarantee Premium.

9. CONDITIONS PRECEDENT

9.1 Documents, fees and no default

Each Lender's obligation to contribute to an Advance is subject to the following conditions precedent:

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(g) that, on or before the service of any Drawdown Notice, the Agent receives (to the extent not previously delivered to the Agent in connection with a previous Drawdown Notice):

(i) the documents described in Part 1 of Schedule 3 in form and substance satisfactory to the Agent; and

(ii) such documentation and other evidence as is reasonably requested by the Agent or a Lender in order for each to carry out and be satisfied with the results of all necessary "know your customer" and anti-money laundering or other checks which it is required to carry out in relation to the transactions contemplated by this Agreement and the other Finance Documents, including without limitation obtaining, verifying and recording certain information and documentation that will allow the Agent and each of the Lenders to identify each Security Party in accordance with the requirements of the PATRIOT Act and other applicable legislation;

(h) that, on the Drawdown Date in respect of such Advance for the acquisition of a Ship, but prior to the making of such Advance, the Agent receives or is satisfied that it will receive on the making of such Advance the documents described in Part 2 of Schedule 3 in form and substance satisfactory to it;

(i) that the Agent has not received any notice from K-Sure requesting the K-Sure Lenders to suspend the making of an Advance under the K-Sure Loan;

(j) no occurrence, event or circumstances exist which prohibit any of the K-Sure Lenders from participating in the Advance pursuant to the terms of the relevant K-Sure Insurance Policy;

(k) the obligations of K-Sure under the relevant K-Sure Insurance Policy have not been terminated, cancelled, become unenforceable or otherwise ceased to be in full force and effect;

(l) that the Agent has not received any notice from KEXIM requesting the KEXIM Guaranteed Lenders to suspend the making of an Advance under the KEXIM Guaranteed Loan;

(m) no occurrence, event or circumstances exist which prohibit any of the KEXIM Guaranteed Lenders from participating in the Advance pursuant to the terms of the KEXIM Guarantee;

(n) the obligations of KEXIM under the KEXIM Guarantee have not been terminated, cancelled, become unenforceable or otherwise ceased to be in full force and effect;

(o) that, on or before the service of the first Drawdown Notice, the Agent receives any upfront and arrangement fees, accrued commitment fee and the first installment of the annual agency fee referred to in Clause 21.1 and the Fee Letters and has received payment of the expenses referred to in Clause 21.4;

(p) that at the date of each Drawdown Notice, and at each Drawdown Date:

(i) no Event of Default or Potential Event of Default has occurred and is continuing or would result from the borrowing of the Advance;

(ii) the representations and warranties in Clause 10 and those of the Borrowers or any other Security Party which are set out in the other Finance Documents (other than those relating to a specific date, which shall be true and correct as of such specific date)

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would be true and not misleading if repeated on each of those dates with reference to the circumstances then existing;

(iii) none of the circumstances contemplated by Clause 5.7 has occurred and is continuing; and

(iv) there has been no Material Adverse Effect since June 30, 2014;

(q) that on or before each Drawdown Date the Agent shall be satisfied that the relevant Approved Builder has or will have received the full amount of the agreed purchase price payable for the relevant Ship, other than the amount of the requested Advances;

(r) that, if the Collateral Maintenance Ratio were applied immediately following the making of such Advance, the Borrowers would not be required to provide additional Collateral or prepay part of the Loan under Clause 15;

(s) that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the authorization of the Majority Lenders, request by notice to the Borrowers prior to the Drawdown Date; and

(t) on or before the first Drawdown Date the Agent shall have taken out the insurance referred to in Clause 13.16 and provided the Borrowers and the Lenders with satisfactory documentary evidence of the same.

9.2 Waiver of conditions precedent

Notwithstanding anything in Clause 9.1 to the contrary if the Agent, with the prior written consent of all Lenders, permits an Advance to be borrowed before certain of the conditions referred to in Clause 9.1 are satisfied, the Borrowers and the Guarantor shall ensure that such conditions are satisfied within 10 Business Days after such Drawdown Date (or such longer period as the Agent with the prior written consent of all Lenders may specify).

9.3 Payments on satisfaction or waiver of conditions precedent

Only if required under the terms of an Approved Acquisition Contract, an Advance may be borrowed before the conditions precedent set forth in Schedule 3, Part 2, Paragraphs (d) and (f) are satisfied and:

(c) each Lender agrees to make its Contribution available to the Agent on the relevant Drawdown Date; and

(d) the Agent shall on the Drawdown Date (i) preposition an amount equal to the aggregate principal amount of the Advance at a bank or other financial institution (the "Seller's Bank") satisfactory to the Agent, which funds shall be held at the Seller's Bank in the name and under the sole control of the Agent or one of its Affiliates and (ii) issue a SWIFT MT 199 or other similar communication (each such communication, a "Disbursement Authorization") authorizing the release of such funds by the Seller's Bank on the relevant Delivery Date upon receipt of a Protocol of Delivery and Acceptance in respect of such Ship duly executed by the Seller and the Relevant Borrower and countersigned by a representative of the Agent;

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provided that if delivery of the Ship does not occur within 5 Business Days after the scheduled Delivery Date, the funds held at the Seller's Bank shall be returned to the Agent for further distribution to the Lenders.

For the avoidance of doubt, the parties hereto acknowledge and agree that:

(i) the Agent will receive funds from the Lenders on the Drawdown Date in respect of such Advance and all interest and fees thereon shall accrue from such date;

(ii) the Agent and the Lenders may suspend fulfillment of the conditions precedent set forth in Schedule 3, Part 2, Paragraphs (d) and (f) solely for the time period on and between such Drawdown Date and the relevant Delivery Date;

(iii) from the date the proceeds of the Advance are deposited at the Seller's Bank to the Delivery Date (or, if delivery of the Ship does not occur within the time prescribed in the Disbursement Authorization, the date on which the funds are returned to the Agent for further distribution to the Lenders), the Borrowers shall be entitled to interest on the Advance at the applicable rate, if any, paid by the Seller's Bank for such deposited funds;

(iv) if the Ship is not delivered within the time prescribed in the Disbursement Authorization and the proceeds of the Advance are returned to the Agent and distributed to the Lenders, (A) the Borrowers shall pay all accrued interest and fees in respect of such returned proceeds on the date such proceeds are returned to the Agent and (B) the relevant available Commitment will be increased by an amount equal to the aggregate principal amount of the Loan proceeds so returned; and

(v) if the Relevant Borrower has instructed the Agent to convert the aggregate principal amount of the Advance borrowed into a currency other than Dollars for deposit with the Seller's Bank and the relevant Ship is not delivered within the time prescribed in the Disbursement Authorization and the proceeds of the Advance are returned to the Agent for further distribution to the Lenders, the Agent shall convert the aggregate principal amount of funds so returned back into Dollars and if such funds are less than the Dollar amount of the aggregate principal amount of the Advance incurred on the relevant Drawdown Date, the Borrowers shall immediately repay the difference and, in any event, the Borrowers shall pay any and all fees, charges and expenses arising from such conversion.

10. REPRESENTATIONS AND WARRANTIES

10.1 General

Each of the Borrowers and the Guarantor jointly and severally represents and warrants to each Creditor Party as follows:

10.2 Status

Each Security Party is:

(e) duly incorporated or formed and validly existing and in good standing under the law of its jurisdiction of incorporation or formation; and

(f) duly qualified and in good standing as a foreign company in each other jurisdiction in which it owns or leases property or in which the conduct of its business requires it to so qualify or be

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licensed except where, in each case, the failure to so qualify or be licensed and be in good standing could not reasonably be expected to have a material adverse effect:

(iii) on the rights or remedies of any the Creditor Parties under any of the Finance Documents or in respect of the Collateral taken as a whole;

(iv) on the performance of any of the Security Parties, or the Security Parties taken as a whole, to perform its or their obligations under any of the Finance Documents;

(v) with respect to the loan facilities contemplated by this Agreement; or

(vi) on the business, property, assets, nature of assets, operations, liabilities or condition (financial or otherwise) of any of the Security Parties,

and there are no proceedings or actions pending or contemplated by any Security Party, or to the knowledge of any Borrower or the Guarantor contemplated by any third party, seeking to adjudicate such Security Party as bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property.

10.3 Company power; consents

Each Security Party has the capacity and has taken all action, and no consent of any person is required, for:

(e) it to own or lease and operate its properties and to carry on its business as now conducted and as proposed to be conducted;

(f) it to execute each Finance Document to which it is or is to become a party;

(g) it to execute the Approved Acquisition Contract to which it is a party, to purchase and pay for the relevant Ship under such Approved Acquisition Contract and register the relevant Ship in its name under an Approved Flag;

(h) it to comply with its obligations under the Charter and each Finance Document to which it is or is to become a party;

(i) it to grant the Security Interests granted by it pursuant to the Finance Documents to which it is or is to become a party;

(j) the perfection or maintenance of the Security Interests created by the Finance Documents (including the first priority nature thereof); and

(k) the exercise by any Creditor Party of their rights under any of the Finance Documents or the remedies in respect of the Collateral pursuant to the Finance Documents to which it is a party,

except, in each case, for consents which have been duly obtained, taken, given or made and are in full force and effect.

10.4 Consents in force

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All the consents referred to in Clause 10.3 remain in force and nothing has occurred which makes any of them liable to revocation.

10.5 Title

(a) Each Security Party owns (i) in the case of owned real property, good and marketable title to and (ii) in the case of owned personal property, good and valid title to, or, in the case of leased real or personal property, valid and enforceable leasehold interests (as the case may be) in, all of its properties and assets, tangible and intangible, of any nature whatsoever, free and clear in each case of all Security Interests or claims, except for Permitted Security Interests.

(b) No Security Party has created or is contractually bound to create any Security Interest on or with respect to any of its assets, properties, rights or revenues, except for Permitted Security Interests, and except as provided in this Agreement no Security Party is restricted by contract, applicable law or regulation or otherwise from creating Security Interests on any of its assets, properties, rights or revenues.

(c) Each Borrower has received (or will receive on the Delivery Date) all deeds, assignments, waivers, consents, non-disturbance and attornment or similar agreements, bills of sale and other documents, and has duly effected (or will duly effect on the Delivery Date) all recordings, filings and other actions necessary to establish, protect and perfect such Borrower's right, title and interest in and to the Ship owned or to be owned by it and other properties and assets (or arrangements for such recordings, filings and other actions acceptable to the Agent shall have been made).

10.6 Legal validity; effective first priority Security Interests

Subject to any relevant insolvency laws affecting creditors' rights generally:

(f) the Finance Documents to which each Security Party is a party, constitute or, as the case may be, will constitute upon execution and delivery (and, where applicable, registration as provided for in the Finance Documents), such Security Party's legal, valid and binding obligations enforceable against it in accordance with their respective terms; and

(g) the Finance Documents to which each Security Party is a party, create or, as the case may be, will create upon execution and delivery (and, where applicable, registration as provided for in the Finance Documents), legal, valid and binding first priority Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate.

10.7 No third party Security Interests

Without limiting the generality of Clauses 10.5 and 10.6, at the time of the execution and delivery of each Finance Document:

(g) the relevant Security Party will have the right to create all the Security Interests which that Finance Document purports to create; and

(h) no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms, relates.

10.8 No conflicts

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The execution and delivery of each Finance Document, the borrowing of each Advance, and compliance with each Finance Document will not involve or lead to a contravention of:

(c) any law or regulation, including, without limitation, any applicable anti-money laundering legislation applicable to it; or

(d) the constitutional documents of any Security Party; or

(e) any contractual or other obligation or restriction which is binding on any Security Party or any of its assets.

10.9 Status of Secured Liabilities

The Secured Liabilities constitute direct, unconditional and general obligations of each Security Party and rank (a) senior to all subordinated Financial Indebtedness and (b) not less than paripassu (as to priority of payment and as to security) with all other Financial Indebtedness of each Security Party.

10.10 Taxes

(a) All payments which a Security Party is liable to make under the Finance Documents to which it is a party can properly be made without deduction or withholding for or on account of any tax payable under any law of any Pertinent Jurisdiction applicable as of the Effective Date.

(b) Each Security Party has timely filed or has caused to be filed all tax returns and other reports that it is required by law or regulation to file, and has paid or caused to be paid all taxes, assessments and other similar charges that are due and payable, other than taxes and charges:

(iv) which (A) are not yet due and payable or (B) are being contested in good faith by appropriate proceedings and for which adequate reserves have been established and as to which such failure to have paid such tax does not create any risk of sale, forfeiture, loss, confiscation or seizure of a Ship or of criminal liability; or

(v) the non-payment of which could not reasonably be expected to have a material adverse effect on the financial condition of such Security Party.

(c) The charges, accruals, and reserves on the books of each Security Party respecting taxes are adequate in accordance with GAAP.

(d) No material claim for any tax has been asserted against a Security Party by any Pertinent Jurisdiction or other taxing authority other than claims that are included in the liabilities for taxes in the most recent balance sheet of such person or disclosed in the notes thereto, if any.

(e) The execution, delivery, filing and registration or recording (if applicable) of the Finance Documents and the consummation of the transactions contemplated thereby will not cause any of the Creditor Parties to be required to make any registration with, give any notice to, obtain any license, permit or other authorization from, or file any declaration, return, report or other document with any governmental authority in any Pertinent Jurisdiction.

(f) No taxes are required by any governmental authority in any Pertinent Jurisdiction to be paid with respect to or in connection with the execution, delivery, filing, recording, performance or enforcement of any Finance Document.

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(g) The execution, delivery, filing, registration, recording, performance and enforcement of the Finance Documents by any of the Creditor Parties will not cause such Creditor Party to be subject to taxation under any law or regulation of any governmental authority in any Pertinent Jurisdiction of any Security Party.

(h) It is not necessary for the legality, validity, enforceability or admissibility into evidence of this Agreement or any other Finance Document that any stamp, registration or similar taxes be paid on or in relation to this Agreement or any of the other Finance Documents.

10.11 No default

No Event of Default or Potential Event of Default has occurred or would result from the borrowing of the Advance and no other circumstances exist which constitute or (with the giving of notice, lapse of time, determination of materiality or the fulfillment of any other applicable condition, or any combination of the foregoing) would constitute a default under any document which is binding on a Security Party or any of its assets and which may have a Material Adverse Effect on the ability of a Security Party to perform its obligations under the Finance Documents to which it is or is to be a party.

10.12 Information

All financial statements, information and other data furnished by or on behalf of a Security Party to any of the Creditor Parties:

(a) was complete and at the time it was given true and accurate in all material respects;

(b) such financial statements, if any, have been prepared in accordance with GAAP and, except as disclosed to the SEC and/or the New York Stock Exchange, accurately and fairly represent the financial condition of such Security Party as of the date or respective dates thereof and the results of operations of such Security Party for the period or respective periods covered by such financial statements;

(c) there are no other facts or matters the omission of which would have made or make any such information false or misleading;

(d) there has been no material adverse change in the financial condition, operations or business prospects of any Security Party since the date on which such information was provided other than as previously disclosed to the Agent in writing which might reasonably be expected to have a material adverse effect:

(v) on the rights or remedies of any the Creditor Parties under any of the Finance Documents or in respect of the Collateral taken as a whole;

(vi) on the performance of any of the Security Parties, or the Security Parties taken as a whole, to perform its or their obligations under any of the Finance Documents;

(vii) with respect to the loan facilities contemplated by this Agreement; or

(viii) on the business, property, assets, nature of assets, operations, liabilities or condition (financial or otherwise) of any of the Security Parties; and,

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(e) none of the Security Parties has any contingent obligations, liabilities for taxes or other outstanding financial obligations which are material in the aggregate except as disclosed in such statements, information and data.

10.13 No litigation

To the best of any Security Party's knowledge, no legal or administrative action involving a Security Party (including any legal or administrative action relating to any alleged or actual breach of the ISM Code, the ISPS Code, any Environmental Law or any Sanctions Law) has been commenced or taken by any person, or, to any Borrower's or the Guarantor's knowledge, is likely to be commenced or taken which, in either case and if adversely determined, would be likely to have a material adverse effect:

(a) on the rights or remedies of any the Creditor Parties under any of the Finance Documents or in respect of the Collateral taken as a whole;

(b) on the performance of any of the Security Parties, or the Security Parties taken as a whole, to perform its or their obligations under any of the Finance Documents;

(c) with respect to the loan facilities contemplated by this Agreement; or

(d) on the business, property, assets, nature of assets, operations, liabilities or condition (financial or otherwise) of any of the Security Parties,

or which may affect the legality, validity, binding effect or enforceability of the Finance Documents.

10.14 ISM Code and ISPS Code compliance

Each Borrower has obtained or will obtain or will cause to be obtained all necessary ISM Code Documentation and ISPS Code Documentation in connection with the Ship owned or to be owned by it and its operation and will be or will cause such Ship and the Approved Manager to be in full compliance with the ISM Code and the ISPS Code.

10.15 Validity and completeness of Approved Acquisition Contracts and Charters

(a) Each Approved Acquisition Contract constitutes valid, binding and enforceable obligations of the Guarantor or the Borrower party thereto in accordance with its terms and:

(ix) the copy of such Approved Acquisition Contract delivered to the Agent is a true and complete copy; and

(x) no amendments or additions to such Approved Acquisition Contract have been agreed nor has the Guarantor or the Borrower party thereto waived any of their respective rights under such Approved Acquisition Contract.

(b) To the extent there are any, each Charter constitutes valid, binding and enforceable obligations of the Borrower party thereto in accordance with its terms and:

(i) the copy of such Charter delivered to the Agent is a true and complete copy; and

(ii) no amendments or additions to such Charter have been agreed nor has the Borrower party thereto waived any of its rights under such Charter.

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10.16 No rebates etc

There is no agreement or understanding to allow or pay any rebate, premium, commission, discount or other benefit or payment (howsoever described) to the Guarantor or any of its subsidiaries or Affiliates or any third party in connection with the relevant Approved Acquisition Contract, other than as provided in such Approved Acquisition Contract and disclosed to the Agent in writing.

10.17 Compliance with law; Environmentally Sensitive Material

Except to the extent the following could not reasonably be expected to have a material adverse effect

(a) on the rights or remedies of any of the Creditor Parties under any of the Finance Documents or in respect of the Collateral taken as a whole;

(b) on the performance of any of the Security Parties, or the Security Parties taken as a whole, to perform its or their obligations under any of the Finance Documents;

(c) with respect to the loan facilities contemplated by this Agreement; or

(d) on the business, property, assets, nature of assets, operations, liabilities or condition (financial or otherwise) of any of the Security Parties,

or affect the legality, validity, binding effect or enforceability of the Finance Documents:

(i) the operations and properties of each of the Security Parties comply with all applicable laws and regulations, including without limitation Environmental Laws, all necessary Environmental Permits have been obtained and are in effect for the operations and properties of each of the Security Parties and each of the Security Parties is in compliance in all material respects with all such Environmental Permits; and

(ii) none of the Security Parties has been notified in writing by any person that it or any of its subsidiaries or Affiliates is potentially liable for the remedial or other costs with respect to treatment, storage, disposal, release, arrangement for disposal or transportation of any Environmentally Sensitive Material, except for costs incurred in the ordinary course of business with respect to treatment, storage, disposal or transportation of such Environmentally Sensitive Material.

10.18 Ownership structure

(a) All of the Equity Interests of the Guarantor have been validly issued, are fully paid and non‑assessable.

(b) All of the Equity Interests of each Borrower have been validly issued, are fully paid, non‑assessable and free and clear of all Security Interests other than Permitted Security Interests and are owned legally and beneficially and of record by the Guarantor.

(c) None of the Equity Interests of any Borrower are subject to any existing option, warrant, call, right, commitment or other agreement of any character to which any of the Borrowers is a party requiring, and there are no Equity Interests of any Borrower outstanding which upon conversion or exchange would require, the issuance, sale or transfer of any additional Equity Interests of any of the Borrowers or other Equity Interests convertible into, exchangeable for or evidencing the right to subscribe for or purchase Equity Interests of any of the Borrowers.

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10.19 Pension Plans

None of the Borrowers nor the Guarantor nor any ERISA Affiliate maintains any Plan or Multiemployer Plan and none of the Borrowers nor the Guarantor maintains any Foreign Pension Plan.

10.20 Margin Stock

None of the Borrowers nor the Guarantor is engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock and no proceeds of any Advance will be used to buy or carry any Margin Stock or for any other purpose in violation of the Margin Regulations or to extend credit to others for the purpose of buying or carrying any Margin Stock.

10.21 Investment company, public utility, etc

None of the Borrowers or the Guarantor is:

(a) required to be registered as an "investment company," or an "affiliated person" of, or "promoter" or "principal underwriter" for, an "investment company," as such terms are defined in the United States Investment Company Act of 1940, as amended, or subject to regulation thereunder; or

(b) a "public utility" within the meaning of the United States Federal Power Act of 1920, as amended, or subject to regulation thereunder.

10.22 Asset control

(a) None of the Borrowers or the Guarantor is a Restricted Party, is owned or controlled by, or, to the best of its knowledge, acting directly or indirectly on behalf of or for the benefit of, a Restricted Party and does not own or control a Restricted Party.

(b) No proceeds of any Advance shall be made available or applied, directly or indirectly, by any Borrower or the Guarantor:

(i) to or for the benefit of a Restricted Party to the extent that this would put any Obligor or any Lender in breach of any Sanctions Laws; or

(ii)    applied in a manner or for a purpose prohibited by Sanctions Laws.

(c) No Security Party nor any subsidiary of any Security Party nor any of their respective directors or officers:

(i) is a Restricted Party; or

(ii) has received notice of or is aware of any claim, action, suit, proceedings or investigation against it with respect to Sanctions Laws by any Sanctions Authority.

10.23 No money laundering

Without prejudice to the generality of Clause 2.3, in relation to the borrowing of an Advance, the performance and discharge of its obligations and liabilities under the Finance Documents, and the transactions and other arrangements affected or contemplated by the Finance Documents to which the Borrowers are a party, each Borrower confirms that:

(a) it is acting for its own account;

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(b) it will use the proceeds of such Advance for its own benefit, under its full responsibility and exclusively for the purposes specified in this Agreement; and

(c) the foregoing will not involve or lead to a contravention of any law, official requirement or other regulatory measure or procedure implemented to combat "money laundering" (as defined in Article 1 of Directive 2005/60/EC of the European Parliament and of the Council of the European Union) and comparable United States federal and state laws, including without limitation the PATRIOT Act and the Bank Secrecy Act.

10.24 Ships

As of the relevant Delivery Date and at all times thereafter, each Ship will be:

(a) in the sole and absolute ownership of a Borrower and duly registered in such Borrower's name under the law of an Approved Flag, unencumbered save and except for the Mortgage thereon in favor of the Security Trustee recorded against it and as permitted thereby;

(b) seaworthy (including, without limitation, for hull and machinery insurance warranty purposes) and in every way fit for its intended service;

(c) insured in accordance with the provisions of this Agreement and the requirements hereof in respect of such insurances will have been complied with;

(d) in class in accordance with the provisions of this Agreement and the requirements hereof in respect of such classification will have been complied with; and

(e) managed by an Approved Manager pursuant to an Approved Management Agreement, provided that nothing herein shall be construed to prohibit an Approved Manager from sub-contracting its management duties to the extent permitted pursuant to an Approved Management Agreement.

10.25 Place of business

For purposes of the UCC, each Security Party has only one place of business located at, or, if it has more than one place of business, the chief executive office from which it manages the main part of its business operations and conducts its affairs is located at:

9, Boulevard Charles III

Monaco 98000

None of the Security Parties has a place of business in the United States of America, the District of Columbia, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States of America, other than its representative office at:

150 East 58th Street

New York, New York 10155

10.26 Solvency

In the case of each Borrower and the Guarantor:

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(a) the sum of its assets, at a fair valuation, does and will exceed its liabilities (including guarantees), including, to the extent they are reportable as such in accordance with GAAP, contingent liabilities;

(b) the present fair market saleable value of its assets is not and shall not be less than the amount that will be required to pay its probable liability on its then existing debts, including, to the extent they are reportable as such in accordance with GAAP, contingent liabilities, as they mature;

(c) it does not and will not have unreasonably small working capital with which to continue its business; and

(d) it has not incurred, does not intend to incur and does not believe it will incur, debts beyond its ability to pay such debts as they mature.

10.27 Borrowers' business; Guarantor's business

From the date of its incorporation until the date hereof, none of the Borrowers or the Guarantor has conducted any business other than in connection with, or for the purpose of, owning, chartering and operating the Ships.

10.28 Immunity; enforcement; submission to jurisdiction; choice of law

(a) Each Security Party is subject to civil and commercial law with respect to its obligations under the Finance Documents, and the execution, delivery and performance by each Security Party of the Finance Documents to which it is a party constitute private and commercial acts rather than public or governmental acts.

(b) No Security Party or any of its properties has any immunity from suit, court jurisdiction, attachment prior to judgment, attachment in aid of execution of a judgment, set-off, execution of a judgment or from any other legal process in relation to any Finance Document.

(c) It is not necessary under the laws of any Security Party's jurisdiction of incorporation or formation, in order to enable any Creditor Party to enforce its rights under any Finance Document or by reason of the execution of any Finance Document or the performance by the any Security Party of its obligations under any Finance Document, that such Creditor Party should be licensed, qualified or otherwise entitled to carry on business in such Security Party's jurisdiction of incorporation or formation.

(d) Other than the recording of each Mortgage in accordance with the laws of an Approved Flag and such filings as may be required in a Pertinent Jurisdiction in respect of certain of the Finance Documents, and the payment of fees consequent thereto, it is not necessary for the legality, validity, enforceability or admissibility into evidence of this Agreement or any other Finance Document that any of them or any document relating thereto be registered, filed recorded or enrolled with any court or authority in any Pertinent Jurisdiction.

(e) The execution, delivery, filing, registration, recording, performance and enforcement of the Finance Documents by any of the Creditor Parties will not cause such Creditor Party to be deemed to be resident, domiciled or carrying on business in any Pertinent Jurisdiction of any Security Party or subject to taxation under any law or regulation of any governmental authority in any Pertinent Jurisdiction of any Security Party.

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(f) Under the law of each Security Party's jurisdiction of incorporation or formation, the choice of the law of New York to govern this Agreement and the other Finance Documents to which New York law is applicable is valid and binding.

(g) The submission by the Security Parties to the jurisdiction of the New York State courts and the U.S. Federal court sitting in New York County pursuant to Clause 32.2(a) is valid and binding and not subject to revocation, and service of process effected in the manner set forth in Clause 32.2(d) will be effective to confer personal jurisdiction over the Security Parties in such courts.

10.29 No other material events or facts

Without prejudice to the generality of Clause 10.12, there are no other material events, circumstances or facts (political, commercial or otherwise) which may give rise to any loss or claim under any K-Sure Insurance Policy or KEXIM Guarantee.

10.30 Repetition

(a) The representations and warranties set out in this Clause 10 are deemed to be repeated both on the date of each Drawdown Notice, at each Drawdown Date and at each Delivery Date.

(b) The representations and warranties set out in Clauses 10.1, 10.2, 10.4, 10.5, 10.6, 10.8, 10.9, 10.11, 10.12, 10.13, 10.15(b), 10.18, 10.19, 10.20, 10.22, 10.23, 10.24, 10.25, 10.26, 10.27, 10.28 and 10.29 are deemed to be repeated on the first day of each Interest Period.

11. GENERAL AFFIRMATIVE AND NEGATIVE COVENANTS

11.1 Affirmative covenants

From the first Drawdown Date until the Total Commitments have terminated and all amounts payable hereunder have been paid in full each of the Borrowers and the Guarantor, as the case may be, undertakes with each Creditor Party to comply or cause compliance with the following provisions of this Clause 11.1 except as the Agent, with the prior written consent of the Majority Lenders, may approve from time to time in writing:

(g) Performance of obligations

Each Security Party shall duly observe and perform its obligations under each Charter and each Finance Document to which it is or is to become a party.

(h) Notification of defaults

The Borrowers and the Guarantor shall promptly notify the Agent, upon becoming aware of the same, of:

(i) the occurrence of an Event of Default or of any Potential Event of Default or any other event (including any litigation) which, if adversely determined, is reasonably likely to materially adversely affect any Security Party's ability to perform its obligations under a Charter or a Finance Document to which it is or is to become a party;

(ii) any Change of Control;

(iii) any default by any party to a Charter; and

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(iv) any damage or injury caused by or to a Ship in excess of $5,000,000.

(i) Confirmation of no default

The Guarantor will, within 3 Business Days after service by the Agent of a written request, serve on the Agent a notice which is signed by an officer of the Guarantor and which states that:

(i) no Event of Default or Potential Event of Default has occurred; or

(ii) no Event of Default or Potential Event of Default has occurred and is continuing, except for a specified event or matter, of which all material details are given.

The Agent may serve requests under this Clause 11.1(c) from time to time but only if asked to do so by a Lender or Lenders having Contributions exceeding 33% of the Loan or (if no Advances have been made) Commitments exceeding 33% of the Total Commitments, and this Clause 11.1(c) does not affect the Guarantor or the Borrowers' respective obligations under Clause 11.1(b).

(j) Notification of litigation

The Guarantor will provide the Agent with details of any legal or administrative action involving any Borrower, any other Security Party, the Approved Manager or any Ship, the Earnings or the Insurances as soon as such action is instituted or it becomes apparent to the Guarantor that it is likely to be instituted, unless it is clear that the legal or administrative action cannot be considered material in the context of any Finance Document.

(k) Provision of further information

The Guarantor will, as soon as practicable after receiving the request, provide the Agent with any additional financial or other information relating to:

(i) the Borrowers, the Guarantor or any of the Guarantor's other subsidiaries; or

(ii) any other matter relevant to, or to any provision of, a Finance Document,

which may be requested by the Agent, the Security Trustee or any Lender at any time.

(l) Books of record and account; separate accounts

(i) Each of the Borrowers and the Guarantor shall keep separate and proper books of record and account in which full and materially correct entries shall be made of all financial transactions and the assets and business of each of the Borrowers and the Guarantor in accordance with GAAP, and the Agent shall have the right to examine the books and records of each of the Borrowers and the Guarantor wherever the same may be kept from time to time as it sees fit, in its sole reasonable discretion, or to cause an examination to be made by a firm of accountants selected by it, provided that any examination shall be done without undue interference with the day to day business operations of the Borrowers or the Guarantor, as the case may be.

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(ii) Each of the Borrowers and the Guarantor shall keep separate accounts and shall not co‑mingle assets with each other, except for funds held in the Earnings Accounts, or any other person.

(m) Financial reports

Whether or not the Guarantor is then subject to Sections 13(a) or 15(d) of the Exchange Act, the Guarantor shall prepare and deliver to the Agent:

(i) as soon as reasonably practicable and in any event within 120 days after the end of each Fiscal Year, an annual report on Form 20-F (or any successor form) containing the audited consolidated financial and other information required to be contained therein for such Fiscal Year (including a balance sheet and a statement of profit and loss and cash flow for such Fiscal Year);

(ii) as soon as reasonably practicable and in any event within 60 days after the end of each quarter of each Fiscal Year, quarterly reports on Form 6-K (or any successor form) containing unaudited consolidated financial statements for and as of the end of such fiscal quarter (with comparable financial statements for the corresponding fiscal quarter of the immediately preceding Fiscal Year);

(iii) a Compliance Certificate together with the quarterly reports that the Guarantor delivers in (ii) above;

(iv) as soon as reasonably practicable and in any event within 90 days after the end of each Fiscal Year, cash flow projections (including a balance sheet and a statement of profit and loss and cash flow) for the Guarantor and its subsidiaries (on a consolidated basis) for the following three consecutive calendar years; and

(v) such other financial statements (including without limitation details of all off-balance sheet and time charter hire commitments), annual budgets and projections as may be reasonably requested by the Agent and KEXIM, each to be in such form as the Agent may reasonably request;

providedthat the Guarantor will be deemed to have furnished to the Agent such reports and information referred to in (i) and (ii) above if the Guarantor has filed such reports and information with the SEC via the EDGAR system (or any successor system) and such reports and information are publicly available.

(n) Appraisals of Fair Market Value

The Guarantor shall procure and deliver to the Agent two written appraisal reports setting forth the Fair Market Value of each Ship as follows:

(xi) at the Borrowers' expense, (A) for inclusion with each Compliance Certificate required to be delivered together with the second quarterly and annual financial statements that the Guarantor delivers under Clause 11.1(g)(i) and (ii) and (B) if an Event of Default has occurred and is continuing, as often as requested by the Agent (acting on the instructions of the Majority Lenders) and (C) if a Major Casualty has occurred in respect of the relevant Ship within 15 days of such Major Casualty; and

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(xii) at the Lenders' expense, at all other times upon the request of the Agent (acting on the instructions of the Majority Lenders).

(o) Taxes

Each Security Party shall prepare and timely file all tax returns required to be filed by it and pay and discharge all taxes imposed upon it or in respect of any of its property and assets before the same shall become in default, as well as all lawful claims (including, without limitation, claims for labor, materials and supplies) which, if unpaid, might become a Security Interest upon the Collateral or any part thereof, except in each case, for any such taxes (i) as are being contested in good faith by appropriate proceedings and for which adequate reserves have been established, (ii) as to which such failure to have paid does not create any risk of sale, forfeiture, loss, confiscation or seizure of a Ship or criminal liability, or (iii) the failure of which to pay or discharge would not be likely to have a Material Adverse Effect or to affect the legality, validity, binding effect or enforceability of the Finance Documents.

(p) Consents

Each Security Party shall obtain or cause to be obtained, maintain in full force and effect and comply with the conditions and restrictions (if any) imposed in connection with, every consent and do all other acts and things which may from time to time be necessary or required for the continued due performance of all of its obligations under any Charter and each Finance Document to which it is or is to become a party, and shall deliver a copy of all such consents to the Agent promptly upon its request.

(q) Compliance with applicable law

Each Security Party shall:

(i) comply in all material respects with all applicable federal, state, local and foreign laws, ordinances, rules, orders and regulations:

(A) applicable to its business; and

(B) applicable to the Ship, its ownership, employment, operation, management and registration,

now in force or hereafter enacted, including, without limitation, the ISM Code, the ISPS Code, all Environmental Laws, all Sanctions Laws and the laws of the Approved Flag;

(ii) obtain, comply with and do all that is necessary to maintain in full force and effect any environment approvals; and

without limiting paragraph (i) above, not employ the Ship nor allow its employment, operation or management in any manner contrary to any law or regulation including but not limited to the ISM Code, the ISPS Code, all Environmental Laws and all Sanctions Laws.

(r) Existence

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Each Security Party shall do or cause to be done all things necessary to preserve and keep in full force and effect its existence in good standing under the laws of its jurisdiction of incorporation or formation.

(s) Conduct of business

(iii) The Guarantor shall conduct business only in connection with, or for the purpose of, managing, chartering and operating the Ships and other vessels and directly or indirectly owning the Equity Interests of each of the Borrowers and other vessel owning companies.

(iv) Each Borrower shall conduct business only in connection with, or for the purpose of, owning, managing, chartering and operating the Ship owned by it.

(v) Each Security Party shall conduct business in its own name and observe all corporate and other formalities required by its constitutional documents.

(t) Properties

(i) Except to the extent the failure to do so could not reasonably be expected to have a Material Adverse Effect, each Security Party shall maintain and preserve all of its properties that are used or useful in the conduct of its business in good working order and condition, ordinary wear and tear excepted.

(ii) Each Security Party shall obtain and maintain good and marketable title or the right to use or occupy all real and personal properties and assets (including intellectual property) reasonably required for the conduct of its business.

(iii) Each Security Party shall conduct its business and affairs without infringement of or interference with any intellectual property of any other person in any material respect and shall comply in all material respects with the terms of its licenses.

(u) Loan proceeds

The Borrowers shall use the proceeds of each Advance solely to partially finance the acquisition of a Ship pursuant to an Approved Acquisition Contract.

(v) Pollution liability

Each Security Party shall take, or cause to be taken, such actions as may be reasonably required to mitigate potential liability to it arising out of pollution incidents or as may be reasonably required to protect the interests of the Creditor Parties with respect thereto.

(w) Subordination of loans

Each Security Party shall cause all loans made to it by any Affiliate and all sums and other obligations (financial or otherwise) owed by it to any Affiliate to be unsecured and fully subordinated to all Secured Liabilities on terms acceptable to the Majority Lenders.

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(x) Sanctions

(i) Each Security Party shall ensure that no part of the proceeds of any Loan or other transaction(s) contemplated by this Agreement or any other Finance Document shall, directly or indirectly, be used or otherwise made available by a Security Party:

(A) to fund any trade, business or other activity involving any Restricted Party to the extent that this would put any Obligor or any Lender in breach of any Sanctions Laws;

(B) for the direct or indirect benefit of any Restricted Party to the extent that this would put any Obligor or any Lender in breach of any Sanctions Laws; or

(C) in any other manner that would reasonably be expected to result in (1) the occurrence of an Event of Default under Clause 20.1(s) or (2) any Security Party (other than the Borrowers and the Guarantor) or any Affiliate of such party or any other person being party to or which benefits from any Finance Document, or any Lender being in breach of any Sanctions Laws (if and to the extent applicable to either of them) or becoming a Restricted Party.

(ii) Each Security Party shall ensure that its assets (including, without limitation, each Ship) shall not be used directly or indirectly by a Security Party:

(A) by or for the direct or indirect benefit of any Restricted Party to the extent that this would put any Obligor or any Lender in breach of any Sanctions Laws; or

(B) in any trade which is prohibited under applicable Sanctions Laws or which could expose any Security Party, any asset subject to a Security Interest under the Finance Documents, any Creditor Party, any other person being party to or which benefits from any Finance Document, any Approved Manager, any operator, crew or insurers to enforcement proceedings or any other consequences whatsoever arising from Sanctions Laws.

(iii) Each Security Party shall ensure it will not become a Restricted Party.

(y) Information: miscellaneous

Each Security Party shall supply to the Agent promptly upon becoming aware that it, any of its direct or indirect owners, Affiliates, any of their joint ventures or any of their respective directors, officers, employees, agents or representatives has become or is reasonably likely to become a Restricted Party.

(z) Money laundering

Each Security Party shall to the best of its knowledge and ability comply, and cause each of its subsidiaries to comply, with any applicable law, official requirement or other regulatory measure or procedure implemented to combat "money laundering" (as defined in Article 1 of Directive 2005/60/EC of the European Parliament and of the Council) and comparable United States federal and state laws, including without limitation the PATRIOT Act and the Bank Secrecy Act.

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(aa) Pension plans

Promptly upon the institution of a Plan, a Multiemployer Plan or a Foreign Pension Plan by the Guarantor or any Borrower, the Borrowers shall furnish or cause to be furnished to the Agent written notice thereof and, if requested by the Agent or any Lender, a copy of such Plan, Multiemployer Plan or Foreign Pension Plan.

(bb) Information provided to be accurate

All financial and other information which is provided in writing by or on behalf of any Security Party under or in connection with any Finance Document shall be true and not misleading in all material respects and shall not omit any material fact or consideration.

(cc) Shareholder and creditor notices

The Guarantor shall send the Agent, at the same time as they are dispatched, copies of all communications which are dispatched to its (i) shareholders or any class of them or (ii) creditors generally.

(dd) Maintenance of Security Interests

Each of the Borrowers and the Guarantor shall:

(i) at its own cost, do all that it reasonably can to ensure that any Finance Document validly creates the obligations and the Security Interests which it purports to create; and

(ii) without limiting the generality of paragraph (i), at its own cost, promptly register, file, record or enroll any Finance Document with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in respect of any Finance Document, give any notice or take any other step which, in the opinion of the Majority Lenders, is or has become reasonably necessary for any Finance Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.

(ee) Know your customer checks

If:

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

(ii) any change in the status of the Guarantor or any other Security Party, after the Effective Date; or

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

obliges the Agent or any Lender (or, in the case of paragraph (iii), 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, the Guarantor shall promptly upon the request of the Agent or the Lender concerned supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on

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behalf of any Lender) or the Lender concerned (for itself or, in the case of the event described in paragraph (iii), on behalf of any prospective new Lender) in order for the Agent, the Lender concerned or, in the case of the event described in paragraph (iii), any prospective new Lender to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

(ff) NYSE listing

The Guarantor shall maintain its listing on the New York Stock Exchange.

(gg) Further assurances

From time to time, at its expense, each of the Borrowers and the Guarantor shall duly execute and deliver to the Agent such further documents and assurances as the Majority Lenders or the Agent may reasonably request to effectuate the purposes of this Agreement, the other Finance Documents or obtain the full benefit of any of the Collateral.

11.2 Negative covenants

From the Effective Date until the Total Commitments have terminated and all amounts payable hereunder have been paid in full each of the Borrowers and the Guarantor, as the case may be, undertakes with each Creditor Party to comply or cause compliance with the following provisions of this Clause 11.2 except as the Agent, with the prior written consent of the Majority Lenders, may approve from time to time in writing:

(l) Security Interests

None of the Borrowers shall create, assume or permit to exist any Security Interest whatsoever upon any of its properties or assets, whether now owned or hereafter acquired, except for Permitted Security Interests.

(m) Sale of assets; merger

No Security Party shall sell, transfer or lease (other than in connection with a Charter or the contribution to a pool) all or substantially all of its properties and assets, or enter into any transaction of merger or consolidation or liquidate, windup or dissolve itself (or suffer any liquidation or dissolution) provided that a Borrower may sell the Ship owned by it pursuant to the terms of this Agreement.

(n) No contracts other than in ordinary course of business

None of the Borrowers or the Guarantor shall enter into any transactions or series of related transactions with third parties other than in the ordinary course of its business.

(o) Affiliate transactions

None of the Borrowers or the Guarantor shall enter into any transaction or series of related transactions, whether or not in the ordinary course of business, with any Affiliate other than on terms and conditions substantially as favorable to such Borrower or Guarantor as would be obtainable by it at the time in a comparable arm's-length transaction with a person other than an Affiliate.

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(p) Change of business

(iii) The Guarantor shall not change the nature of its business or commence any business other than in connection with, or for the purpose of managing, chartering and operating the Ships and other vessels and directly or indirectly owning the Equity Interests of each of the Borrowers and other subsidiaries.

(iv) None of the Borrowers shall change the nature of its business or commence any business other than in connection with, or for the purpose of, owning, managing, chartering and operating the Ship owned by it.

(q) Negative pledge

The Guarantor shall not permit any pledge or assignment of a Borrower's Equity Interests except in favor of the Security Trustee to secure the Secured Liabilities.

(r) Increases in capital

The Guarantor shall not permit an increase of a Borrower's capital by way of the issuance of any class or series of Equity Interests or create any new class of Equity Interests that is not subject to a Security Interest to secure the Secured Liabilities.

(s) Financial Indebtedness; Trade payables

(iv) None of the Borrowers shall incur any Financial Indebtedness other than in respect of:

(A) the Loan,

(B) Financial Indebtedness existing on the Effective Date which has been disclosed to and approved by the Majority Lenders in writing and

(C) subject to Clause 11.1(q), loans made to a Guarantor by any Affiliate, parent or subsidiary.

(v) None of the Borrowers shall incur unsecured trade credit exceeding (A) $3,000,000 on its Ship at any time on or before the date falling on the fifth (5th) anniversary of the date of this Agreement and (B) $3,500,000 on its Ship at any time thereafter.

(t) Dividends

(i) If an Event of Default or Potential Event of Default has occurred and is continuing, or if an Event of Default or Potential Event of Default would result therefrom, Guarantor shall not declare or pay any dividends or return any capital to its equity holders or authorize or make any other distribution, payment or delivery of property or cash to its equity holders, or redeem, retire, purchase or otherwise acquire, directly or indirectly, for value, any interest of any class or series of its Equity Interests (or acquire any rights, options or warrants relating thereto but not including convertible debt) now or hereafter outstanding, or repay any subordinated loans to equity holders or set aside any funds for any of the foregoing purposes.

(ii) Except as provided in Clause 11.2(i)(i) above, none of the Borrowers will permit any restriction (1) to declare or pay any dividends or return any capital to the Guarantor or

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authorize or make any other distribution, payment or delivery of property or cash to the Guarantor or to pay any Financial Indebtedness owed to the Guarantor, or (2) to repay and/or make any subordinated loans to the Guarantor or set aside any funds for any of the foregoing purposes, or (3) to transfer any of its assets to the Guarantor.

(u) [Reserved.]

(v) Internal charters

None of the Borrowers shall enter into any demise, time or consecutive voyage charter in respect of the Ship owned by it with another Borrower or any Affiliate of the Guarantor as charterer under that charter without the prior written approval of the Majority Lenders (which shall not be unreasonably withheld or delayed); provided however (x) that the Borrowers may contribute their respective Ships to pools managed by Affiliates of the Borrowers without obtaining the consent of the Lenders, and (y) copies of the relevant Pool Agreements are delivered to the Agent within 7 days of entering into such Pool Agreements.

(w) Loans and investments

None of the Borrowers or the Guarantor shall make any loan or advance to, make any investment in, or enter into any working capital maintenance or similar agreement with respect to any person, whether by acquisition of Equity Interests or indebtedness, by loan, guarantee or otherwise, except that in case of the Guarantor, the Guarantor may undertake a transaction described above if (i) after giving effect to any such transaction, the Guarantor will be in compliance with the financial covenants set out in Clause 12 and (ii) no Event of Default or Potential Event of Default exists at the time of such transaction or would result therefrom.

(x) Acquisition of capital assets

None of the Borrowers shall acquire any capital assets (including any vessel other than a Ship) by purchase, charter or otherwise, provided that for the avoidance of doubt nothing in this Clause 11.2(m) shall prevent or be deemed to prevent ordinary upgrades or maintenance work being made to a Ship.

(y) Sale and leaseback

None of the Borrowers shall enter into any arrangements, directly or indirectly, with any person whereby it shall sell or transfer any of its property, whether real or personal, whether now owned or hereafter acquired, if it, at the time of such sale or disposition, intends to lease or otherwise acquire the right to use or possess (except by purchase) such property or like property for a substantially similar purpose.

(z) Changes to Fiscal Year and accounting policies

None of the Borrowers or the Guarantor shall change its Fiscal Year or make or permit any change in accounting policies affecting (i) the presentation of financial statements or (ii) reporting practices, except in either case in accordance with GAAP or pursuant to the requirements of applicable laws or regulations.

(aa) Jurisdiction of incorporation or formation; Amendment of constitutional documents

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None of the Borrowers or the Guarantor shall change the jurisdiction of its incorporation or formation. None of the Borrowers shall amend its constitutional documents. The Guarantor shall not amend its constitutional documents in any manner that would adversely affect its obligations under this Agreement or any other Finance Document to which it is a party.

(bb) Sale of Ship

No Borrower shall consummate the sale of its Ship without paying or causing to be paid all amounts due and owing in connection with this Agreement (including, without limitation, Clause 8.9) in respect of the relevant Advances which have been used to finance that Ship and the other Finance Documents prior to or simultaneously with the consummation of such sale.

(cc) Change of location

None of the Borrowers or the Guarantor shall change the location of its chief executive office or the office where its corporate records are kept or open any new office for the conduct of its business on less than 30 days prior written notice to the Agent.

(dd) Financial Support

None of the Borrowers shall procure any financial support (including contingent support) other than:

(iv) financial support incurred pursuant to this Agreement or Financial Indebtedness permitted under Clause 11.2(h);

(v) existing financial support which is outstanding on the Effective Date and has been disclosed to the Agent in writing; or

(vi) financial support approved in writing by all Lenders.

(ee) Change of place of business

None of the Borrowers or the Guarantor shall change the location of the place of business where it or any other Security Party conducts its affairs and keeps its records.

(ff) Hedging

None of the Borrowers shall enter into any Currency Agreement or interest hedging relating to the Loans under this Agreement.

12. FINANCIAL COVENANTS

12.1 General

From the Effective Date until the Total Commitments have terminated and all amounts payable hereunder have been paid in full, the Guarantor undertakes with each Creditor Party to comply or cause compliance with the following provisions of this Clause 12 except as the Agent, with the prior written consent of the Majority Lenders, may approve from time to time in writing.

12.2 Maximum leverage

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The Guarantor shall maintain a ratio of Net Debt to Consolidated Total Capitalization of not more than 0.60 to 1.00, to be tested on the last day of each fiscal quarter.

12.3 Minimum Consolidated Tangible Net Worth

The Guarantor shall maintain a Consolidated Tangible Net Worth of not less than $500,000,000 plus:

(d) 25% of the Guarantor's cumulative, positive consolidated net income for each fiscal quarter commencing on or after 31 December 2013; and

(e) 50% of the value of the Equity Proceeds realised from any issuance of Equity Interests in the Guarantor occurring on or after 31 December 2013, to be tested on the last day of each fiscal quarter.

12.4 Minimum interest coverage

(h) From and including 30 September 2015 to and including 31 December 2016 the Guarantor shall maintain a ratio of Consolidated EBITDA to Consolidated Net Interest Expense greater than 1.00 to 1.00 calculated quarterly on a trailing four quarter basis.

(i) From and including 1 January 2017 to and including 31 December 2017 the Guarantor shall maintain a ratio of Consolidated EBITDA to Consolidated Net Interest Expense greater than 2.00 to 1.00 calculated quarterly on a trailing four quarter basis.

(j) From and including 1 January 2018 and at all times thereafter the Guarantor shall maintain a ratio of Consolidated EBITDA to Consolidated Net Interest Expense greater than 2.50 to 1.00 calculated quarterly on a trailing four quarter basis.

12.5 Minimum liquidity

The Guarantor shall maintain Consolidated Liquidity, including all amounts on deposit with any bank, of not less than (a) $50,000,000 or (b) $850,000 per vessel owned by the Guarantor or any of its subsidiaries (the "Minimum Liquidity"), whichever is greater, providedthat (i) amounts readily available for drawing by the Guarantor and its subsidiaries under committed credit facilities with a maturity date in excess of 12 months which remain undrawn and could be drawn for general working capital or other general corporate purposes (subject to the availability limits and other provisions set out in the agreements related to such committed credit facilities) may be included as unencumbered cash and (ii) 66.67% of the Minimum Liquidity shall at all times consist of cash and Cash Equivalents (on a freely available and unencumbered basis).

12.6 Material changes in GAAP requirements

In the event that changes are introduced to or affect GAAP or its application, the Parties will consult in good faith for a period of one month with a view to agreement adjustments to the financial covenants set out in this Clause 12 (Financial Covenants) with a view to ensure that the economic effect of the financial covenants remain the same as if no such change to or affecting GAAP or its application had been introduced provided always that if the Parties have not reached an agreement within that one month period, any requested adjustments will be deemed not to have been agreed. The costs and expenses associated with any such consultation or any subsequent amendments to this Agreement shall be borne by the Borrowers.

13. MARINE INSURANCE COVENANTS

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13.1 General

From the first Drawdown Date until the Total Commitments have terminated and all amounts payable hereunder have been paid in full, each of the Borrowers and the Guarantor, as the case may be, undertakes with each Creditor Party to comply or cause compliance with the following provisions of this Clause 13 except as the Agent, with the prior written consent of the Majority Lenders (and in the case of Clauses 13.2 and 13.3 with the consent of the Majority Lenders and KEXIM), may approve from time to time in writing.

13.2 Maintenance of obligatory insurances

Each Borrower shall keep or cause to keep the Ship owned by it insured at its expense against:

(f) fire and usual marine risks (including hull and machinery, hull interest, freight interest and excess risks);

(g) war risks;

(h) protection and indemnity risks; and

(i) any other risks as appropriate for an internationally reputable shipping company having regard to practices and other circumstances prevailing at the relevant time.

13.3 Terms of obligatory insurances

Each Borrower shall affect such insurances in respect of the Ship owned by it:

(k) in Dollars;

(l) in the case of fire and usual marine risks and war risks, in an amount on an agreed value basis at least the greater of:

(i) 120% of outstanding principal amount of the Loan in relation to that Ship; and

(ii) the Fair Market Value of the Ship owned by it;

provided that, not less than 80% of the Fair Market Value shall be on a hull and machinery basis, while the remaining part of the insured value may be taken out by way of hull and freight interest insurance cover;

(m) in the case of oil pollution liability risks and protection and indemnity war risks (in excess of the amount for war risk hull), in each case for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry and in the international marine insurance market (in the case of oil pollution liability risks, currently U.S.$1,000,000,000);

(n) in relation to protection and indemnity risks in respect of the full tonnage of the Ship owned by it;

(o) on approved terms; and

(p) through brokers and with insurance companies not rated less than BBB+ or the equivalent thereof and/or underwriters or, in the case of war risks and protection and indemnity risks, in

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war risks and protection and indemnity risks associations that are members of the International Group of P&I Clubs, each as approved by the Agent and KEXIM in their reasonable discretion; provided, however, if with insurance companies rated lower than BBB- or the equivalent thereof, as approved by all Lenders in their reasonable discretion.

13.4 Further protections for the Creditor Parties

In addition to the terms set out in Clause 13.3, each Borrower shall procure that the obligatory insurances affected by it shall:

(i) subject always to paragraph (b), name that Borrower as the sole named assured unless the interest of every other named assured is limited:

(xiii) in respect of any obligatory insurances for hull and machinery and war risks;

(xiv) to any provable out-of-pocket expenses that it has incurred and which form part of any recoverable claim on underwriters; and

(xv) to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against it); and

(xvi) in respect of any obligatory insurances for protection and indemnity risks, to any recoveries it is entitled to make by way of reimbursement following discharge of any third party liability claims made specifically against it;

and every other named assured has undertaken in writing to the Security Trustee (in such form as it requires) that any deductible shall be apportioned between that Borrower and every other named assured in proportion to the aggregate claims made or paid by each of them and that it shall do all things necessary and provide all documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances;

(j) whenever the Security Trustee requires, name (or be amended to name) the Security Trustee as additional named assured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Security Trustee, but without the Security Trustee thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;

(k) name the Security Trustee as first priority mortgagee and loss payee with such directions for payment as the Security Trustee may specify;

(l) provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set-off, counterclaim or deductions or condition whatsoever;

(m) provide that the obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Trustee or any other Creditor Party; and

(n) provide that the Security Trustee may make proof of loss if that Borrower fails to do so.

13.5 Renewal of obligatory insurances

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Each Borrower shall:

(f) at least 14 days before the expiry of any obligatory insurance:

(iii) notify the Security Trustee of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom that Borrower proposes to renew that obligatory insurance and of the proposed terms of renewal; and

(iv) obtain the Security Trustee's approval to the matters referred to in paragraph (i);

(g) at least 7 days before the expiry of any obligatory insurance, renew that obligatory insurance in accordance with the Security Trustee's approval pursuant to paragraph (a)(ii); and

(h) procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Security Trustee in writing of the terms and conditions of the renewal.

13.6 Copies of policies; letters of undertaking

Each Borrower shall ensure that all approved brokers provide the Security Trustee with pro forma copies of all policies relating to the obligatory insurances which they are to affect or renew and of a letter or letters or undertaking in a form required by the Security Trustee and including undertakings by the approved brokers that:

(a) they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment in accordance with the requirements of the Insurance Assignment for that Borrower's Ship;

(b) they will hold such policies, and the benefit of such insurances, to the order of the Security Trustee in accordance with the said loss payable clause;

(c) they will advise the Security Trustee immediately of any material change to the terms of the obligatory insurances or if they cease to act as brokers;

(d) they will notify the Security Trustee, not less than 14 days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from that Borrower or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Security Trustee of the terms of the instructions; and

(e) they will not set off against any sum recoverable in respect of a claim relating to the Ship owned by that Borrower under such obligatory insurances any premiums or other amounts due to them or any other person whether in respect of that Ship or otherwise, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums or other amounts, and they will not cancel such obligatory insurances by reason of non payment of such premiums or other amounts, and will arrange for a separate policy to be issued in respect of that Ship forthwith upon being so requested by the Security Trustee.

13.7 Copies of certificates of entry

Each Borrower shall provide the Security Trustee with:

(i) a certified copy of the certificate of entry for that Ship;

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(j) a letter or letters of undertaking in such form as may be required by the Security Trustee;

(k) where required to be issued under the terms of insurance/indemnity provided by the protection and indemnity association, but only if and when so requested by the Agent, a certified copy of each United States of America voyage quarterly declaration (or other similar document or documents) made by the relevant Security Party in relation to that Ship in accordance with the requirements of such protection and indemnity association; and

(l) a copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to the Ship.

13.8 Deposit of original policies

Each Borrower shall ensure that all policies relating to obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.

13.9 Payment of premiums

Each Borrower shall punctually pay all premiums or other sums payable in respect of the obligatory insurances and produce all relevant receipts when so required by the Security Trustee.

13.10 Guarantees

Each Borrower shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.

13.11 Compliance with terms of insurances

No Borrower shall do nor omit to do (nor permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void, voidable or unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part; and, in particular:

(a) each Borrower shall take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in Clause 13.6(c)) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Security Trustee has not given its prior approval;

(b) no Borrower shall make any changes relating to the classification or classification society or manager or operator of the Ship owned by it unless approved by the underwriters of the obligatory insurances;

(c) each Borrower shall make (and promptly supply copies to the Agent of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Ship owned by it is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and

(d) no Borrower shall employ the Ship owned by it, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.

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13.12 Alteration to terms of insurances

No Borrower shall either make or agree to any alteration to the terms of any obligatory insurance nor waive any right relating to any obligatory insurance.

13.13 Settlement of claims

No Borrower shall settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty, and each Borrower shall do all things necessary and provide all documents, evidence and information (including, without limitation, a written confirmation from the relevant insurers, to be issued within 180 days after the Total Loss Date, that the claim in respect of the Total Loss has been accepted in full by such insurers) to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.

13.14 Provision of copies of communications

Each Borrower shall provide the Security Trustee, at the time of each such communication, copies of all material written communications between that Borrower and:

(e) the approved brokers;

(f) the approved protection and indemnity and/or war risks associations; and

(g) the approved insurance companies and/or underwriters,

which relate directly or indirectly to:

(i) that Borrower's obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and

(ii) any credit arrangements made between that Borrower and any of the persons referred to in paragraphs (a) or (b) relating wholly or partly to the effecting or maintenance of the obligatory insurances.

13.15 Provision of information

In addition, each Borrower shall promptly provide the Security Trustee (or any persons which it may designate) with any information which the Security Trustee (or any such designated person) reasonably requests for the purpose of:

(d) obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or

(e) effecting, maintaining or renewing any such insurances as are referred to in Clause 13.16 or dealing with or considering any matters relating to any such insurances;

and that Borrower shall, forthwith upon demand, indemnify the Security Trustee in respect of all fees and other expenses incurred by or for the account of the Security Trustee in connection with any such report as is referred to in paragraph (a).

13.16 Mortgagee's interest, additional perils and political risk insurances

The Security Trustee shall be entitled to effect, maintain and renew:

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(a)     mortgagee's interest marine insurance; and

(b) prior to any Ship entering into U.S. waters, mortgagee's interest additional perils insurance and/or

(c)     mortgagee's political risks/rights insurance,

in each case, in such amounts (not to exceed 120% of the Loan), on such terms, through such insurers and generally in such manner as the Security Trustee may from time to time consider necessary and the Borrowers and the Guarantor, jointly and severally, shall upon demand fully indemnify the Security Trustee in respect of all premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any such insurance or dealing with, or considering, any matter arising out of any such insurances.

13.17 Review of insurance requirements

The Security Trustee may and, on instruction of the Majority Lenders, shall review, at the expense of the Borrowers, the requirements of this Clause 13 from time to time in order to take account of any changes in circumstances after the Effective Date which are, in the reasonable opinion of the Agent or the Majority Lenders, significant and capable of affecting the relevant Security Party or a Ship and its insurance (including, without limitation, changes in the availability or the cost of insurance coverage or the risks to which the relevant Security Party may be subject.)

13.18 Modification of insurance requirements

The Security Trustee shall notify the Borrowers and the Guarantor of any proposed modification under Clause 13.17 to the requirements of this Clause 13 which the Security Trustee may reasonably consider appropriate in the circumstances and such modification shall take effect on and from the date it is notified in writing to the Borrowers and the Guarantor as an amendment to this Clause 13 and shall bind the Borrowers and the Guarantor accordingly.

13.19 Compliance with instructions

The Security Trustee shall be entitled (without prejudice to or limitation of any other rights which it may have or acquire under any Finance Document) to require a Ship to remain at any safe port or to proceed to and remain at any safe port designated by the Security Trustee until the relevant Security Party implements any amendments to the terms of the obligatory insurances and any operational changes required as a result of a notice served under Clause 13.18.

14. SHIP COVENANTS

14.1 General

From the first Drawdown Date until the Total Commitments have terminated and all amounts payable hereunder have been paid in full, each of the Borrowers and the Guarantor, as the case may be, undertakes with each Creditor Party to comply or cause compliance with the following provisions of this Clause 14 except as the Agent, with the prior written consent of the Majority Lenders (and in the case of Clauses 14.2(c), 14.3(b) and 14.13(f) with the prior written consent of all Lenders and K-Sure), may approve from time to time in writing.

14.2 Ship's name and registration

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Each Borrower shall:

(q) keep the Ship owned by it registered in its name under the law of an Approved Flag;

(r) not do, omit to do or allow to be done anything as a result of which such registration might be cancelled or imperiled; and

(s) not change the name or port of registry on which such Ship was registered when it became subject to a Mortgage.

14.3 Repair and classification

Each Borrower shall keep the Ship owned by it in a good and safe condition and state of repair:

(o) consistent with first class ship ownership and management practice;

(p) so as to maintain the highest class for that Ship with the Classification Society, free of overdue recommendations and conditions affecting that Ship's class; and

(q) so as to comply in all material respects with all laws and regulations applicable to vessels registered under the law of the Approved Flag on which that Ship is registered or to vessels trading to any jurisdiction to which that Ship may trade from time to time, including but not limited to the ISM Code and the ISPS Code.

14.4 Classification Society instructions

Each Borrower shall instruct the Classification Society referred to in Clause 14.3(b) and separately undertake:

(i) to send to the Security Trustee, following receipt of a written request from the Security Trustee, copies of all original class records held by the Classification Society in relation to that Borrower's Ship;

(j) to allow the Security Trustee (or its agents), at any time and from time to time, to inspect the original class and related records of that Borrower and the Ship owned by it either (i) electronically (through the Classification Society directly or by way of indirect access via the Relevant Borrower's account manager and designating the Security Trustee as a user or administrator of the system under its account) or (ii) in person at the offices of the Classification Society, and to take copies of them electronically or otherwise;

(k) following receipt of a written request from the Security Trustee:

(v) to confirm that that Borrower is not in default of any of its contractual obligations or liabilities to the Classification Society and, without limiting the foregoing, that it has paid in full all fees or other charges due and payable to the Classification Society; or

(vi) if that Borrower is in default of any of its contractual obligations or liabilities to the Classification Society, to specify to the Security Trustee in reasonable detail the facts and circumstances of such default, the consequences of such default, and any remedy period agreed or allowed by the Classification Society.

14.5 Modification

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No Borrower shall make any modification or repairs to, or replacement of, the Ship owned by it or equipment installed on that Ship which would or is reasonably likely to materially negatively alter the structure, type or performance characteristics of that Ship or materially reduce its value.

14.6 Removal of parts

No Borrower shall remove any material part of the Ship owned by it, or any item of equipment installed on, that Ship unless the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Security Interest or any right in favor of any person other than the Security Trustee and becomes on installation on that Ship, the property of that Borrower and subject to the security constituted by a Mortgage, provided that a Borrower may install and remove equipment owned by a third party if the equipment can be removed without any risk of material damage to the Ship owned by it.

14.7 Surveys

Each Borrower, at its sole expense, shall submit the Ship owned by it regularly to all periodic or other surveys which may be required for classification purposes and, if so required by the Security Trustee, provide the Security Trustee, at that Borrower's sole expense, with copies of all survey reports.

14.8 Inspection

Each Borrower shall permit the Security Trustee (by surveyors or other persons appointed by it for that purpose at the cost of the Borrowers and the Guarantor) to board the Ship owned by it at all reasonable times (but before the occurrence and during the continuance of an Event of Default not more than once per year) to inspect its condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections. The Security Trustee shall use reasonable efforts to ensure that the operation of that Ship is not adversely affected as a result of such inspections.

14.9 Prevention of and release from arrest

Each Borrower shall promptly discharge:

(e) all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Ship owned by it, the Earnings or the Insurances;

(f) all taxes, dues and other amounts charged in respect of the Ship owned by it, the Earnings or the Insurances; and

(g) all other accounts payable whatsoever in respect of the Ship owned by it, the Earnings or the Insurances,

and, forthwith upon (and in any event not more than 90 days after) receiving notice of the arrest of the Ship owned by it, or of its detention in exercise or purported exercise of any lien or claim, that Borrower or the Guarantor shall procure its release by providing bail or otherwise as the circumstances may require.

14.10 Compliance with laws

Each Borrower shall:

(e) comply, or procure compliance with, all laws or regulations:

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(vii) relating to its business generally; and

(viii) relating to the ownership, employment, operation and management of the Ship owned by it,

including but not limited to the ISM Code, the ISPS Code, all Environmental Laws and all Sanctions Laws;

(f) without prejudice to the generality of paragraph (a) above, not employ the Ship owned by it nor allow its employment in any manner contrary to any laws or regulations, including but not limited to the ISM Code, the ISPS Code; all Environmental Laws and all Sanctions Laws; and

(g) in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit the Ship owned by it to enter or trade to any zone which is declared a war zone by any government or by that Ship's war risks insurers unless the prior written consent of the Security Trustee has been given (after consultation with its insurance advisors) and that Borrower has (at its expense) effected any special, additional or modified insurance cover which the Security Trustee may require.

14.11 Provision of information

Each Borrower shall promptly provide the Security Trustee with any information which it, the KEXIM Guaranteed Loan Agent and/or the K-Sure Agent requests regarding:

(c) the Ship owned by it, its employment, position and engagements;

(d) the Earnings and payments and amounts due to that Ship's master and crew;

(e) any material expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of that Ship and any payments made in respect of that Ship;

(f) any towages and salvages; and

(g) that Borrower's, the Approved Manager's and that Ship's compliance with the ISM Code and the ISPS Code,

and, upon the Security Trustee's request, provide copies of any current charter and charter guarantee relating to that Ship and copies of that Borrower's or the Approved Manager's Document of Compliance.

14.12 Notification of certain events

Each Borrower shall immediately notify the Security Trustee by fax or Email, confirmed forthwith by letter, of:

(a) any casualty which is or is likely to be or to become a Major Casualty;

(b) any occurrence as a result of which the Ship owned by it has become or is, by the passing of time or otherwise, likely to become a Total Loss;

(c) any requirement or condition made by any insurer or classification society or by any competent authority which is not immediately complied with in accordance with its terms;

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(d) any facts or matters that such Borrower has knowledge of or becomes aware of which may result in or have resulted in any overdue condition of class or recommendation (in each case affecting class), or a change, suspension, discontinuance, withdrawal or expiry of that Ship's class under the rules or terms and conditions of that Borrower's or that Ship's membership of the Classification Society;

(e) any arrest or detention of the Ship owned by it, any exercise or purported exercise of any Security Interest on that Ship or the Earnings or any requisition of that Ship for hire;

(f) any intended dry docking of the Ship owned by it;

(g) any material Environmental Claim made against that Borrower or in connection with the Ship owned by it, or any material Environmental Incident;

(h) any legal or administrative action taken by any Sanctions Authority against or affecting any Security Party or any Ship;

(i) any claim for breach of the ISM Code or the ISPS Code being made against that Borrower, the Approved Manager or otherwise in connection with the Ship owned by it which may result in the withdrawal of the Safety Management Certificate, the Document of Compliance or the ISSC applicable to that Ship, the Relevant Borrower or, as the case may be, the Approved Manager; or

(j) any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or the ISPS Code not being complied with;

and that Borrower shall keep the Security Trustee advised in writing on a regular basis and in such detail as the Security Trustee shall require of that Borrower's, the Approved Manager's or any other person's response to any of those events or matters.

14.13 Restrictions on chartering, appointment of managers etc

No Borrower shall:

(h) let the Ship owned by it on demise charter for any period;

(i) other than as disclosed to the Agent, enter into any time or consecutive voyage charter in respect of that Ship for a term which exceeds, or which by virtue of any optional extensions may exceed, 12 months;

(j) enter into any charter in relation to that Ship under which more than two (2) months' hire (or the equivalent) is payable in advance;

(k) charter that Ship otherwise than on bona fide arm's length terms at the time when that Ship is fixed;

(l) appoint a manager of that Ship other than the Approved Manager or agree to any alteration to the material terms of the Approved Management Agreement or release an Approved Manager from its obligations thereunder, including with respect to obligations that may be subcontracted by the Approved Manager;

(m) change the Classification Society; or

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(n) put that Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $2,000,000 (or the equivalent in any other currency) unless that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any Security Interest on that Ship or the Earnings for the cost of such work or for any other reason.

14.14 Copies of Charters; Charter Assignment; Earnings Assignment

Provided that all approvals necessary under Clause 14.13 have been previously obtained, each Borrower shall:

(f) furnish promptly to the Agent a true and complete copy of any Charter for the Ship owned by it, all other documents related thereto and a true and complete copy of each material amendment or other modification thereof;

(g) in respect of any such Charter, execute and deliver to the Agent a Charter Assignment and use reasonable commercial efforts to cause the charterer to execute and deliver to the Security Trustee a consent and acknowledgement to such Charter Assignment in the form required thereby; and

(h) in respect of any contract for the employment of that Ship for a term which is or which by virtue of any optional extensions therein contained would be reasonably likely to be of less than 12 months duration, execute and deliver to the Agent an Earnings Assignment.

14.15 Notice of Mortgage

Each Borrower shall keep the Mortgage registered against the Ship owned by it as a valid first priority or preferred mortgage, carry on board that Ship a certified copy of the Mortgage and place and maintain in a conspicuous place in the navigation room and the Master's cabin of that Ship a framed printed notice stating that such Ship is mortgaged by that Borrower to the Security Trustee.

14.16 Sharing of Earnings

No Borrower shall enter into any agreement or arrangement for the sharing of any Earnings, which, for the avoidance of doubt, does not include Pool Agreements entered into pursuant to Section 11.2(k).

14.17 ISPS Code

Each Borrower shall comply with the ISPS Code and in particular, without limitation, shall:

(c) procure that the Ship owned by it and the company responsible for that Ship's compliance with the ISPS Code comply with the ISPS Code; and

(d) maintain for that Ship an ISSC; and

(e) notify the Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.

15. COLLATERAL MAINTENANCE RATIO

15.1 General

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From the first Drawdown Date until the Total Commitments have terminated and all amounts payable hereunder have been paid in full, each Borrower and the Guarantor undertake with each Creditor Party to comply with the following provisions of this Clause 15 except as the Agent, with the prior written consent of all Lenders, may approve from time to time in writing, such approval not to be unreasonably withheld or delayed.

15.2 Collateral Maintenance Ratio

If, at any time, the Agent notifies the Guarantor that:

(r) the aggregate Fair Market Value of the Ships; plus

(s) the net realizable value of any additional Collateral previously provided under this Clause 15,

is below 145% of the aggregate of the Loans (such ratio being the "Collateral Maintenance Ratio"), the Borrowers shall comply with the requirements of Clause 15.3.

15.3 Provision of additional Collateral; prepayment

If the Agent serves a notice on the Borrowers under Clause 15.2, the Borrowers shall prepay such part (at least) of the Loans as will in the aggregate eliminate the shortfall on or before the date falling one (1) month after the date on which the Agent's notice is served under Clause 15.2 (the "PrepaymentDate") unless at least 10 Business Day before the Prepayment Date it has provided, or ensured that a third party has provided, additional Collateral which, in the opinion of the Majority Lenders, has a net realizable value at least equal to the shortfall and which has been documented in such terms as the Agent may, with the authorization of all Lenders, approve or require (including, without limitation, favorable legal opinions from legal counsel appointed by the Agent in form and substance satisfactory to the Agent and the Majority Lenders).

15.4 Suitability of additional Collateral

Any additional Collateral proposed under Clause 15.3 must be satisfactory to the Majority Lenders (acting reasonably).

15.5 Valuation of additional Collateral

The net realizable value of any additional Collateral which is provided under Clause 15.3 and which consists of a Security Interest over a vessel shall be that shown by a valuation complying with the definition of Fair Market Value. The net realizable value of any additional Collateral which is provided under Clause 15.3 and which consists of cash must be comprised of Dollars and shall be valued at par.

15.6 Valuations binding

Any valuation under Clause 15.3 or 15.5 shall be binding and conclusive as regards the Borrowers and the Guarantor, as shall be any valuation which the Majority Lenders make of any additional Collateral which does not consist of or include a vessel.

15.7 Provision of information

The Guarantor shall promptly provide the Agent and any Approved Broker or other expert acting under Clause 15.5 with any information which the Agent or the Approved Broker or other expert may request for the purposes of the valuation; and, if the Guarantor fails to provide the information by the date

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specified in the request, the valuation may be made on any basis and assumptions which the Approved Broker or the Majority Lenders (or the expert appointed by them) consider prudent.

15.8 Payment of valuation expenses

Without prejudice to the generality of the Borrowers' obligations under Clauses 21.2, 21.3 and 22.3, the Borrowers shall, on demand, pay the Agent the amount of the fees and expenses of any Approved Broker or other expert instructed by the Agent under this Clause 15 and all legal and other expenses incurred by any Creditor Party in connection with any matter arising out of this Clause 15.

15.9 Application of prepayment

Clause 8 shall apply in relation to any prepayment pursuant to Clause 15.3.

16. GUARANTEE

16.1 Guarantee and indemnity

In order to induce the Lenders to make the Loan to the Borrowers, the Guarantor irrevocably and unconditionally:

(t) guarantees, as a primary obligor and not merely as a surety, to each Creditor Party, the punctual payment and performance by the Borrowers when due, whether at stated maturity, by acceleration or otherwise, of all Secured Liabilities of the Borrowers, whether for principal, interest, fees, expenses or otherwise (collectively, the "Guaranteed Obligations");

(u) undertakes with each Creditor Party that whenever the Borrowers do not pay any Guaranteed Obligation when due, the Guarantor shall immediately on demand pay that Guaranteed Obligation as if it were the primary obligor; and

(v) indemnifies each Creditor Party immediately on demand against any cost, loss or liability suffered or incurred by that Creditor Party (i) if any Guaranteed Obligation is or becomes unenforceable, invalid or illegal or (ii) by operation of law as a consequence of the transactions contemplated by the Finance Documents. The amount of the cost, loss or liability shall be equal to the amount which that Creditor Party would otherwise have been entitled to recover.

16.2 Continuing guarantee

This guarantee:

(l) is a continuing guarantee;

(m) constitutes a guarantee of punctual performance and payment and not merely of collection;

(n) is joint and several with any other guarantee given in respect of the Guaranteed Obligations and shall not in any way be prejudiced by any other guarantee or security now or subsequently held by any Creditor Party in respect of the Guaranteed Obligations;

(o) shall remain in full force and effect until the later of the termination of the Total Commitments and the payment and performance in full of the Guaranteed Obligations and all other amounts payable hereunder regardless of any intermediate payment or discharge in whole or in part; and

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(p) shall be binding upon the Guarantor, its successors and permitted assigns.

16.3 Performance of Guaranteed Obligations; obligations pari passu

(f) The Guarantor agrees that the Guaranteed Obligations will be performed and paid strictly in accordance with the terms of the relevant Finance Document regardless of any law or regulation or order of any court:

(vi) affecting (A) any term of such Finance Document or the rights of any of the Creditor Parties with respect thereto or (B) any Borrower's ability or obligation to make or render, or right of any Creditor Party to receive, any payments or performance due thereunder; or

(vii) which might otherwise constitute a defense to, or a legal or equitable discharge of, any Borrower.

(g) The obligations of the Guarantor under this guarantee shall rank pari passu with all other unsecured obligations of the Guarantor.

16.4 Reinstatement

If any payment of any of the Guaranteed Obligations is rescinded, discharged, avoided or reduced or must otherwise be returned by a Creditor Party or any other person upon the insolvency, bankruptcy or reorganization of a Borrower or any other Security Party or otherwise:

(m) this guarantee shall continue to be effective or be reinstated, and the liability of the Guarantor hereunder shall continue or be reinstated, as the case may be, as if the payment, discharge, avoidance or reduction had not occurred; and

(n) each Creditor Party shall be entitled to recover the value or amount of that payment from the Guarantor, as if the payment, discharge, avoidance or reduction had not occurred.

16.5 Liability absolute and unconditional

The obligations of the Guarantor under this Clause 16 shall be irrevocable, absolute and unconditional and shall 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 16, and the Guarantor hereby irrevocably waives any defenses it may now have or hereafter acquire in any way relating to, any or all of the following:

(c) any time, waiver or consent granted to, or composition with, any Security Party or other person;

(d) the release of any other Security Party or any other person under the terms of any composition or arrangement with any creditor of any Security Party;

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

(f) any incapacity or lack of power, authority or legal personality of or dissolution or change in the corporate or company structure or status of a Security Party or any other person (including without limitation any change in the holding of such Security Party's or other person's Equity Interests);

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(g) any amendment to or replacement of a Finance Document or any other document or security;

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

(i) any bankruptcy, insolvency or similar proceedings; or

(j) any other circumstance whatsoever that might otherwise constitute a defense available to, or a legal or equitable discharge of, any Security Party.

16.6 Waiver of promptness

The Guarantor hereby unconditionally and irrevocably waives promptness, diligence, notice of acceptance, presentment, demand for performance, notice of non-performance, default, acceleration, protest or dishonor and any other notice with respect to any of the Guaranteed Obligations and this guarantee and any requirement that a Creditor Party protect, secure, perfect or insure any Security Interest or any property subject thereto or exhaust any right or take any action against any Security Party or any other person or entity or any Collateral.

16.7 Waiver of revocation

The Guarantor hereby unconditionally and irrevocably waives any right to revoke this guarantee.

16.8 Waiver of certain defenses

The Guarantor hereby unconditionally and irrevocably waives:

(h) any defense arising by reason of any claim or defense based upon an election of remedies by a Creditor Party that in any manner impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement, exoneration, contribution or indemnification rights of the Guarantor or other rights of the Guarantor to proceed against a Borrower, any of the other Security Parties, any other guarantor or any other person or entity or any Collateral; and

(i) any defense based on any right of set-off or counterclaim against or in respect of the obligations of the Guarantor hereunder.

16.9 Waiver of disclosure

The Guarantor hereby unconditionally and irrevocably waives any duty on the part of any Creditor Party to disclose to the Guarantor any matter, fact or thing relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of a Borrower, any other Security Party or any of their respective subsidiaries now or hereafter known by any Creditor Party.

16.10 Immediate recourse

The Guarantor waives any right it may have of first requiring any Creditor Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from the Guarantor under this Clause 16. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

16.11 Acknowledgment of benefits

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The Guarantor acknowledges that it will receive substantial direct and indirect benefits from the financing arrangements contemplated by the Finance Documents and that the waivers set forth in this Clause 16 are knowingly made in contemplation of such benefits.

16.12 Independent obligations

The obligations of the Guarantor under or in respect of this guarantee are independent of the Guaranteed Obligations or any other obligations of the Borrowers or any other Security Party under or in respect of the Finance Documents, and a separate action or actions may be brought and prosecuted against the Guarantor to enforce this guarantee irrespective of whether any action is brought against a Borrower or any other Security Party or whether a Borrower or any other Security Party is joined in any such action or actions.

16.13 Deferral of Guarantor's rights

Until the Guaranteed Obligations have been irrevocably paid and performed 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:

(a) to be indemnified by another Security Party;

(b) to claim any contribution from any other guarantor of any Security Party's obligations under the Finance Documents; and/or

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

16.14 Limitation of liability

Each of the Guarantor and the Creditor Parties hereby confirms that it is its intention that the Guaranteed Obligations not constitute a fraudulent transfer or conveyance for purposes of the United States Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar law. To effectuate the foregoing intention, each of the Guarantor and the Creditor Parties hereby irrevocably agrees that the Guaranteed Obligations guaranteed by the Guarantor shall be limited to such amount as will, after giving effect to such maximum amount and all other (contingent or otherwise) liabilities of the Guarantor that are relevant under such laws, result in the Guaranteed Obligations of the Guarantor in respect of such maximum amount not constituting a fraudulent transfer or conveyance.

16.15 Reliance of Creditor Parties

Each of the Creditor Parties has entered into this Agreement in reliance upon, among other things, this guarantee.

17. PAYMENTS AND CALCULATIONS

17.1 Currency and method of payments

All payments to be made by the Lenders or by the Security Parties under a Finance Document shall be made to the Agent or to the Security Trustee, in the case of an amount payable to it:

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(q) by not later than 11:00 a.m. (New York City time) on the due date;

(r) in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Agent shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement);

(s) in the case of an amount payable by a Lender to the Agent or by another Security Party to the Agent or any Lender, to the account of the Agent:

To: The Bank of New York, New York

ABA 021000018 or SWIFT: IRVTUS3N

for: DNB Bank ASA, New York Branch

Account Number: 802 600 1499 / Swift : DNBAUS33

FFC: Scorpio Bulkers Inc.

FFC A/C no:27832999

Attn: CSD Loans / Mercedita Goalcantara

or to such other account with such other bank as the Agent may from time to time notify to the Borrowers, the other Security Parties and the other Creditor Parties; and

(t) in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Borrowers and the other Creditor Parties.

17.2 Payment on non-Business Day

If any payment by a Security Party under a Finance Document would otherwise fall due on a day which is not a Business Day:

(h) the due date shall be extended to the next succeeding Business Day; or

(i) if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day;

and interest shall be payable during any extension under paragraph (a) at the rate payable on the original due date.

17.3 Basis for calculation of periodic payments

All interest and commitment fee and any other payments under any Finance Document which are of an annual or periodic nature shall accrue from day to day and shall be calculated on the basis of the actual number of days elapsed and a 360 day year.

17.4 Distribution of payments to Creditor Parties

Subject to Clauses 17.5, 17.6 and 17.7:

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(k) any amount received by the Agent under a Finance Document for distribution or remittance to a Lender or the Security Trustee shall be made available by the Agent to that Lender or, as the case may be, the Security Trustee by payment, with funds having the same value as the funds received, to such account as the Lender or the Security Trustee may have notified to the Agent not less than 5 Business Days previously; and

(l) amounts to be applied in satisfying amounts of a particular category which are due to the Lenders generally shall be distributed by the Agent to each Lender, as applicable, pro rata to the amount in that category which is due to it.

17.5 Permitted deductions by Agent

Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent may, before making an amount available to a Lender, deduct and withhold from that amount any sum which is then due and payable to the Agent from that Lender under any Finance Document or any sum which the Agent is then entitled under any Finance Document to require that Lender to pay on demand.

17.6 Agent only obliged to pay when monies received

Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent shall not be obliged to make available to a Borrower or any Lender any sum which the Agent is expecting to receive for remittance or distribution to a Borrower or that Lender until the Agent has satisfied itself that it has received that sum.

17.7 Refund to Agent of monies not received

If and to the extent that the Agent makes available a sum to a Borrower or a Lender, without first having received that sum, the Borrowers or (as the case may be) the Lender concerned shall, on demand:

(j) refund the sum in full to the Agent; and

(k) pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the Agent as a result of making the sum available before receiving it.

17.8 Agent may assume receipt

Clause 17.7 shall not affect any claim which the Agent has under the law of restitution, and applies irrespective of whether the Agent had any form of notice that it had not received the sum which it made available.

17.9 Creditor Party accounts

Each Creditor Party shall maintain accounts showing the amounts owing to it by the Borrowers and each other Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrowers and any other Security Party.

17.10 Agent's memorandum account

The Agent shall maintain a memorandum account showing the amounts advanced by the Lenders and all other sums owing to the Agent, the Security Trustee and each Lender from the Borrowers and each

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other Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrowers and any other Security Party.

17.11 Accounts prima facie evidence

If any accounts maintained under Clauses 17.9 and 17.10 show an amount to be owing by the Borrowers or any other Security Party to a Creditor Party, those accounts shall be prima facie evidence that that amount is owing to that Creditor Party.

18. APPLICATION OF RECEIPTS

18.1 Normal order of application

Except as any Finance Document may otherwise provide, any sums which are received or recovered by any Creditor Party under or by virtue of any Finance Document shall be applied:

(j) FIRST: in or towards satisfaction of any amounts then due and payable under the Finance Documents in the following order and proportions:

(ix) first, in or towards satisfaction of all fees, costs and expenses then due and payable to the Agent, the Security Trustee, the KEXIM Guaranteed Loan Agent and the K-Sure Agent pursuant to the Finance Documents;

(x) second, in or towards satisfaction pro rata of all amounts then due and payable to the Creditor Parties under the Finance Documents other than those amounts referred to at paragraphs (iii) (iv) and (v) (including, but without limitation, all amounts payable by any Security Party under Clauses 21, 22 and 23 of this Agreement or by the Borrowers or any other Security Party under any corresponding or similar provision in any other Finance Document);

(xi) third, in or towards satisfaction pro rata of any and all amounts of default interest payable to the Creditor Parties under the Finance Documents;

(xii) fourth, in or towards satisfaction pro rata of any and all amounts of interest payable to the Creditor Parties under the Finance Documents; and

(xiii) fifth, in or towards satisfaction pro rata of any and all amounts of principal payable to the Lenders under this Agreement; and

(k) SECOND: to the extent any remaining sums constitute proceeds recovered from any portion of the Collateral following the occurrence of an Event of Default, to each Lender providing a Commercial Fixed Rate Loan, up to the documented, out of pocket amount (if any) that is necessary to reimburse such Lender for any breakage costs payable by such Lender pursuant to any currency swap entered into by such Lender in connection with the Commercial Fixed Rate Loan; and

(l) THIRD: any surplus shall be paid to the Borrowers or to any other person appearing to be entitled to it.

18.2 Variation of order of application

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The Agent may, with the authorization of the Lenders and K-Sure, by notice to the Borrowers, the other Security Parties and the other Creditor Parties provide for a different manner of application from that set out in Clause 18.1(a)(ii) through (iv) either as regards a specified sum or sums or as regards sums in a specified category or categories.

18.3 Notice of variation of order of application

The Agent may give notices under Clause 18.2 from time to time; and such a notice may be stated to apply not only to sums which may be received or recovered in the future, but also to any sum which has been received or recovered on or after the third Business Day before the date on which the notice is served.

18.4 Appropriation rights overridden

This Clause 18 and any notice which the Agent gives under Clause 18.2 shall override any right of appropriation possessed, and any appropriation made, by the Borrowers or any other Security Party.

18.5 Application matters related to K-Sure Insurance Policy

Notwithstanding the foregoing provisions of this Clause 18:

(h) if any K-Sure Lender receives any insurance proceeds under a K-Sure Insurance Policy other than from the Agent, it shall pay such moneys to the Agent;

(i) notwithstanding the provisions of Clause 18.1, any such moneys shall be applied by the Agent only in accordance with the provisions of paragraph (a) of Clause 18.1 as the case may be, in favour of the K-Sure Lenders, and, for the avoidance of doubt, no such insurance proceeds shall in any circumstances be available to the Borrowers or any other Security Party;

(j) any unpaid K-Sure Premium and any unpaid fees, costs and expenses of K-Sure shall constitute amounts then due and payable in respect of the K-Sure Loan under the Finance Documents (and any of them) for the purposes of the amounts then due and payable in respect of paragraph (a) of Clause 18.1 as the case may be.

18.6 Application of proceeds under KEXIM Guarantee

Notwithstanding the foregoing provisions of this Clause 18:

(l) if any KEXIM Guaranteed Lender receives any proceeds under the KEXIM Guarantee other than from the Agent, it shall pay such moneys to the Agent;

(m) notwithstanding the provisions of Clause 18.1, any such moneys shall be paid by the Agent to the KEXIM Guaranteed Lenders pro rata according to their respective shares of the KEXIM Guaranteed Loan then outstanding, and, for the avoidance of doubt, no such guarantee proceeds shall in any circumstances be available to the Borrowers or any other Security Party;

(n) any unpaid KEXIM Guarantee Premium and any unpaid fees, costs and expenses of KEXIM shall constitute amounts then due and payable in respect of the KEXIM Guaranteed Loan under the Finance Documents (and any of them) for the purposes of the amounts then due and payable in respect of paragraph (a) of Clause 18.1 as the case may be.

18.7 Payments in excess of pro rata sharing

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(h) If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, counterclaim or otherwise) in excess of the amount which such Lender would have received if the payment had been received and distributed by the Agent under this Agreement, such Lender shall forthwith purchase from the other Lenders such participation in their respective Contributions as shall be necessary to share the excess payment rateably with each of them, provided that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such Lender's ratable share (according to the proportion of (i) the amount of such Lender's required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered.

(i) The Borrowers agree that any Lender so purchasing a participation from another Lender pursuant to this Clause 18.7 may, to the fullest extent permitted by law, exercise all of its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrowers in the amount of such participation.

(j) Notwithstanding paragraphs (a) and (b) of this Clause 18.7, any Lender which shall have commenced or joined (as a plaintiff) in an action or proceeding in any court to recover sums due to it under any Finance Document and pursuant to a judgment obtained therein or a settlement or compromise of that action or proceeding shall have received any amount, such Lender shall not be required to share any proportion of that amount with a Lender which has the legal right to, but does not, join such action or proceeding or commence and diligently prosecute a separate action or proceeding to enforce its rights in the same or another court.

(k) Each Lender exercising or contemplating exercising any rights giving rise to a receipt or receiving any payment of the type referred to in this Clause 18.7 or instituting legal proceedings to recover sums owing to it under this Agreement shall, as soon as reasonably practicable thereafter, give notice thereof to the Agent who shall give notice to the other Lenders.

Provided further that Clause 18.7 does not apply to the Commercial Fixed Rate Loan.

19. APPLICATION OF EARNINGS

19.1 General

From the Effective Date until the Total Commitments have terminated and all amounts payable hereunder have been paid in full, each of the Borrowers and the Guarantor, as the case may be, undertakes with each Creditor Party to comply or cause compliance with the following provisions of this Clause 19 except as the Agent, with the prior written consent of the Majority Lenders, may approve from time to time in writing.

19.2 Payment of Earnings

Each of the Borrowers and the Guarantor, as the case may be, undertakes with each Creditor Party to ensure that subject only to the provisions of any Charter Assignment or Earnings Assignment, all Earnings of each Ship are paid to the relevant Earnings Account.

19.3 Use of proceeds in Earnings Account

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Unless and until an Event of Default or Potential Event of Default occurs, the Earnings of each Ship shall be freely available to each of the Borrowers and the Guarantor.

19.4 Location of accounts

Each of the Borrowers and the Guarantor, as the case may be, shall promptly:

(k) comply with any requirement of the Agent as to the location or re location of any Earnings Account, and without limiting the foregoing, each of the Borrowers and the Guarantor agree to segregate the Earnings Account from the banking platform on which their other accounts are located or designated; and

(l) execute any documents which the Agent specifies to create or maintain in favor of the Security Trustee a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) any Earnings Account.

19.5 Debits for expenses

The Agent shall be entitled (but not obliged) from time to time to debit any Earnings Account without prior notice in order to discharge any amount due and payable under Clause 21 or 22 to a Creditor Party or payment of which any Creditor Party has become entitled to demand under Clause 21 or 22.

19.6 Borrowers' obligations unaffected

The provisions of this Clause 19 do not affect:

(l) the liability of the Borrowers to make payments of principal and interest on the due dates; or

(m) any other liability or obligation of the Borrowers or any other Security Party under any Finance Document.

20. EVENTS OF DEFAULT

20.1 Events of Default

An Event of Default occurs if:

(m) non-payment: a Borrower or any other Security Party fails to pay when due any sum payable under a Finance Document or under any document relating to a Finance Document, only in the case of sums payable on demand, within 3 Business Days after the date when first demanded, providedthat if such failure to pay a sum when due is solely the result of an administrative or technical error, it shall not constitute an Event of Default unless such failure continues unremedied for more than 3 Business Days from the occurrence thereof; or

(n) breach of certain Clauses: any breach occurs of any of Clauses 8.9, 9.2, 11.2(b), 13 or 15.3; or

(o) remediable breach: any breach by a Borrower or any other Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a), (b), (d), (e) or (m) of this Clause 20.1) which, in the opinion of the Majority Lenders, is capable of remedy, and such default continues unremedied 10 days after the earlier of (i) the relevant Security

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Party becoming aware of such breach and (ii) written notice from the Agent requesting action to remedy the same; or

(p) non-remediable breach: subject to any applicable grace period specified in a Finance Document, any breach by a Borrower or any other Security Party occurs of any provision of a Finance Document (other than a breach falling within paragraphs (a), (b), (c) or (e) of this Clause 20.1); or

(q) misrepresentation: any representation, warranty or statement made or repeated by, or by an officer or director of, a Borrower or any other Security Party in a Finance Document or in a Drawdown Notice or any other notice or document relating to a Finance Document is untrue or misleading when it is made or repeated; or

(r) cross-default: an event of default, or an event or circumstance which, with the giving of any notice, the lapse of time or both would constitute an event of default, has occurred on the part of a Security Party under any contract or agreement (other than the Finance Documents) to which such Security Party is a party and the value of which is or exceeds $10,000,000 in the aggregate, and such event of default has not been cured within any applicable grace period;

(s) Financial Indebtedness: any Financial Indebtedness of a Security Party in excess of $1,000,000 in the aggregate is not paid when due (or if there is a grace period, within such grace period) or, only in the case of sums payable on demand, when first demanded, except for any such Financial Indebtedness which is being contested by such Security Party in good faith and through appropriate proceedings for which adequate reserves in accordance with GAAP have been established and maintained on the books and records of the applicable Security Party, and in a manner that does not involve any risk of sale, forfeiture, loss, confiscation or seizure of a Ship; or

(t) Insolvency Event: an Insolvency Event occurs with respect to any Security Party; or

(u) expropriation: all or a material part of the undertakings, assets, rights or revenues of, or shares or other ownership interest in, any Security Party are seized, nationalized, expropriated or compulsorily acquired by or under authority of any government, provided that, in the reasonable opinion of the Agent, such occurrence would adversely affect any Security Party's ability to perform its obligations under the Finance Documents to which it is a party; or

(v) creditor process: a creditor attaches or takes possession of, or a distress, execution, sequestration or process (each an action) is levied or enforced upon or sued out against, a material part of the undertakings, assets, rights or revenues (the assets) of any Security Party in relation to a claim by such creditor which, in the reasonable opinion of the Majority Lenders, is likely to materially and adversely affect the ability of such Security Party to perform all or any of its obligations under or otherwise to comply with the terms of any Finance Document to which it is a party and such Security Party does not procure that such action is lifted, released or expunged within 30 Business Days of such action being (i) instituted and (ii) notified to such Security Party; or

(w) judgments: any Borrower or the Guarantor fails (within 5 business days after becoming obliged to do so) to comply with or pay any sum in an amount exceeding $5,000,000 (or the equivalent in any other currencies) due from it under any final judgment or any final order (being one against which there is no right of appeal or if a right of appeal exists the time limit for making such appeal has expired and no appeal has been made or if an appeal has been made such appeal

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has been dismissed) made or given by any court of competent jurisdiction, provided that such event shall not be deemed to constitute an Event of Default if the Relevant Borrower is entitled to insurance cover for the whole of such sum and the relevant insurers have confirmed liability and undertaken to make payment of the whole of such sum in writing to the person(s) entitled to payment and it is likely (in the reasonable opinion of the Majority Lenders) that the insurers will be able to make such payment within 30 days; or

(x) cessation of business: any Security Party ceases or suspends or threatens to cease or suspend the carrying on of its business, or a part of its business which, in the opinion of the Majority Lenders, is material in the context of this Agreement, except in the case of a sale or a proposed sale of a Ship by a Borrower; or

(y) Total Loss or Major Casualty: a Ship becomes a Total Loss or suffers a Major Casualty and (i) in the case of a Total Loss, insurance proceeds are not collected or received by the Security Trustee from the underwriters within 180 days of the Total Loss Date; or (ii) in the case of a Major Casualty, that Ship has not been otherwise repaired in a timely and proper manner; or

(z) unlawfulness: it becomes unlawful or impossible:

(i) for any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Majority Lenders consider material under a Finance Document;

(ii) for the Agent, the Security Trustee or the Lenders to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or

(aa) consents: any consent necessary to enable a Borrower to own, operate or charter the Ship owned by it or to enable a Borrower or any other Security Party to comply with any provision which the Majority Lenders consider material of a Finance Document is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent is not fulfilled; or

(bb) invalidity: any provision of a Finance Document which the Majority Lenders consider material proves to have been or becomes invalid or unenforceable, or a Security Interest created by a Finance Document proves to have been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest; or

(cc) security: the security constituted by a Finance Document is in any way imperiled or in jeopardy; or

(dd) Material Adverse Effect: an event or series of events occurs which, in the reasonable opinion of all the Lenders, may constitute a Material Adverse Effect; or

(ee) Restricted Party: any Security Party or any subsidiary of any Security Party or any of their respective directors or officers becomes a Restricted Party; or

(ff) breach of Manager's Undertaking: any breach by an Approved Manager of a Manager's Undertaking occurs and the Borrower fails to

(i) replace such Approved Manager with another Approved Manager within 120 days from the earlier of:

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(A) the date the relevant Security Party becomes aware of such breach; and

(B) written notice from the Agent requesting action to remedy the same; and/or

(ii) procure that such replacement Approved Manager has entered into a replacement Manager's Undertaking within 30 days of its appointment as an Approved Manager.

20.2 Actions following an Event of Default

On, or at any time after, the occurrence of an Event of Default:

(f) the Agent may, and if so instructed by the Majority Lenders, the Agent shall:

(iii) serve on the Borrowers a notice stating that the Commitments and all other obligations of each Lender to the Borrowers under this Agreement and the other Finance Documents are cancelled; and/or

(iv) serve on the Borrowers a notice stating that the Loan, together with accrued interest and all other amounts accrued or owing under this Agreement and the other Finance Documents are immediately due and payable or are due and payable on demand, provided that in the case of an Event of Default under Clause 20.1(h), the Loan and all accrued interest and other amounts accrued or owing under this Agreement and the other Finance Documents shall be deemed immediately due and automatically become payable without notice or demand therefor; and/or

(v) take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii), the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law; and/or

(g) the Security Trustee may, and if so instructed by the Agent, acting with the authorization of the Majority Lenders, the Security Trustee shall, take any action which, as a result of the Event of Default or any notice served under paragraph (a)(i) or (ii), the Security Trustee, the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law to enforce the Security Interests created by this Agreement and any other Finance Document in any manner available to it and in such sequence as the Security Trustee may, in its absolute discretion, determine.

20.3 Termination of Commitments

On the service of a notice under Clause 20.2(a)(i) or, upon an Event of Default under Clause 20.1(h), the Commitments and all other obligations of each Lender to the Borrowers under this Agreement shall be cancelled.

20.4 Acceleration of Loan

On the service of a notice under Clause 20.2(a)(ii) or, upon an Event of Default under Clause 20.1(h), all or, as the case may be, the part of the Loan specified in the notice (if any), together with accrued interest and all other amounts accrued or owing from the Borrowers or any other Security Party under this Agreement and every other Finance Document shall become immediately due and payable or, as the case may be, payable on demand.

20.5 Multiple notices; action without notice

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The Agent may serve notices under Clauses 20.2(a)(i) and (ii) simultaneously or on different dates and it and/or the Security Trustee may take any action referred to in Clause 20.2 if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.

20.6 Notification of Creditor Parties and Security Parties

The Agent shall send to each Lender, the Security Trustee and each Security Party a copy of the text of any notice which the Agent serves on the Borrowers under Clause 20.2. Such notice shall become effective when it is served on the Borrowers, and no failure or delay by the Agent to send a copy or the text of the notice to any other person shall invalidate the notice or provide the Borrowers or any other Security Party with any form of claim or defense.

20.7 Creditor Party rights unimpaired

Nothing in this Clause shall be taken to impair or restrict the exercise of any right given to individual Lenders under a Finance Document or the general law; and, in particular, this Clause is without prejudice to Clause 3.1.

20.8 Exclusion of Creditor Party liability

No Creditor Party, and no receiver or manager appointed by the Security Trustee, shall have any liability to any Security Party:

(i) for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or

(j) as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realized from any asset comprised in such a Security Interest or for any reduction (however caused) in the value of such an asset,

provided that nothing in this Clause 20.8 shall exempt a Creditor Party or a receiver or manager from liability for losses shown to have been caused by the gross negligence or the willful misconduct of such Creditor Party's own officers and employees or (as the case may be) such receiver's or manager's own partners or employees.

21. FEES AND EXPENSES

21.1 Fees

The Borrowers shall pay to the Agent:

(h) in respect of the Commercial DNB Loan, during the period from (and including) the Effective Date to the Commercial Loan Maturity Date (payable on the Effective Date and thereafter, in arrears on the last day of each quarter and the Commercial Loan Maturity Date) for the account of the Commercial Lenders, a commitment fee at the rate per annum of 40% of the applicable Margin on the undrawn amount of the total Commercial Loan Commitment, for distribution among the Commercial Lenders pro rata to their Commercial Loan Commitments;

(i) in respect of the KEXIM Loan, during the period from (and including) the Effective Date to the KEXIM Loan Maturity Date (payable on the Effective Date, and thereafter, in arrears on the last day of each quarter and the KEXIM Loan Maturity Date) for the account of the KEXIM

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Lenders, a commitment fee at the rate per annum of 40% of the applicable Margin on the undrawn amount of the KEXIM Loan Commitments;

(j) in respect of the K-Sure Loan, during the period from (and including) the Effective Date to the K-Sure Loan Maturity Date (payable on the Effective Date, and thereafter, in arrears on the last day of each quarter and the K-Sure Loan Maturity Date) for the account of the K-Sure Lenders, a commitment fee at the rate per annum of 40% of the applicable Margin on the undrawn amount of the K-Sure Loan Commitments;

(k) in respect of the Commercial Fixed Rate Loan, during the period from (and including) the Effective Date to the Commercial Loan Maturity Date (payable on the Effective Date, and thereafter, in arrears on the last day of each quarter and the Commercial Loan Maturity Date) for the account of any lender that advanced amounts under the Commercial Fixed Rate Loan, a commitment fee at the rate per annum of 1.20% of the undrawn amount of the Commercial Fixed Rate Loan Commitments;

(l) fees in the amounts and on the dates set out in the Fee Letters; and

(m) any other fees as may be payable by the Borrowers.

21.2 K-Sure Premium

Without prejudice to Clause 8.16, the Borrowers:

(m) agree, and each K-Sure Lender acknowledges and agrees, that:

(iv) the amounts of any K-Sure Premium will be solely determined by K-Sure; and

(v) no K-Sure Lender is in any way involved in the calculation or payment (other than as financed in whole or in part pursuant to this Agreement) of any part of any K-Sure Premium;

(n) agree that their obligation to pay any K-Sure Premium or any part of any K-Sure Premium in accordance with the relevant K-Sure Insurance Policy shall be an absolute and unconditional obligation and, without limitation, shall not be affected by any failure by a Borrower to draw down funds under this Agreement or the prepayment or acceleration of the whole or any part of the Loan;

(o) acknowledge that they shall pay an amount equivalent to each K-Sure Premium (including default interest under the relevant K-Sure Insurance Policy) to K-Sure on the relevant due date, and no K-Sure Premium will be refundable in whole or in part in any circumstances, unless otherwise provided in the relevant K-Sure Insurance Policy and Clause 8.16;

(p) agree that if, for any reason whatsoever, any additional fee or premium is or becomes payable to K-Sure in respect of any K-Sure Insurance Policy, the Borrowers shall promptly pay such additional fee or premium in full and the Borrowers shall fully co-operate with the Agent and the K-Sure Agent on their reasonable request to take all steps necessary on the part of the Borrowers to ensure that each K-Sure Insurance Policy remains in full force and effect throughout the Security Period; and

(q) shall indemnify K-Sure in relation to any out-of-pocket costs or expenses (including reasonable and documented legal fees) suffered or incurred by K-Sure in connection with any transfer to

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K-Sure undertaken pursuant to Clause 27.2 or in connection with any review by K-Sure of or in relation to any Event of Default and/or amendment or supplement to any of the Finance Documents and/or a request for a consent or approval from K-Sure.

21.3 KEXIM Guarantee Premium

The Borrowers:

(o) agree that their obligation to pay any KEXIM Guarantee Premium or any part of any KEXIM Guarantee Premium in accordance with the KEXIM Guarantee and the relevant Fee Letter shall be an absolute and unconditional obligation and, without limitation, shall not be affected by any failure by a Borrower to draw down funds under this Agreement or the prepayment or acceleration of the whole or any part of the Loan;

(p) acknowledge that they shall pay an amount equivalent to each KEXIM Guarantee Premium (including default interest under the KEXIM Guarantee) to KEXIM on the relevant due date, and no KEXIM Guarantee Premium will be refundable in whole or in part in any circumstances, unless otherwise provided in the relevant KEXIM Guarantee and Clause 8.17.

21.4 Costs of negotiation, preparation

The Borrowers shall pay to the Agent on its demand the amount of all expenses incurred by the Agent or the Security Trustee in connection with the negotiation, preparation, execution or registration of any Finance Document or any related document or with any transaction contemplated by a Finance Document or a related document, including, without limitation, the reasonable fees and disbursements of a Creditor Party's legal counsel and any local counsel retained by them.

21.5 Costs of variations, amendments, enforcement

The Borrowers shall pay to the Agent, on the Agent's demand, for the account of the Creditor Party concerned (a) the amount of all expenses reasonably incurred by a Creditor Party in connection with:

i. any amendment or supplement to a Finance Document, or any proposal for such an amendment to be made; or

ii. any consent or waiver by the Lenders, the Majority Lenders or the Creditor Party concerned under or in connection with a Finance Document, or any request for such a consent or waiver, or

(b) the amount of all expenses incurred by a Creditor Party in connection with:

i. the valuation of any additional Collateral provided or offered under Clause 15 or any other matter relating to such additional Collateral; or

ii. any step taken by the Security Trustee or a Lender with a view to the protection, exercise or enforcement of any right or Security Interest created by a Finance Document or for any similar purpose.

There shall be recoverable under paragraph (a)(ii) the full amount of all legal expenses, whether or not such as would be allowed under rules of court or any taxation or other procedure carried out under such rules.

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21.6 Documentary taxes

The Borrowers shall promptly pay any tax payable on or by reference to any Finance Document, and shall, on the Agent's demand, fully indemnify each Creditor Party against any claims, expenses, liabilities and losses resulting from any failure or delay by the Borrowers to pay such a tax.

21.7 Certification of amounts

A notice which is signed by an officer of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 21 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.

22. INDEMNITIES

22.1 Indemnities regarding borrowing and repayment of Loan

The Borrowers shall fully indemnify the Agent, KEXIM (in its capacity as guarantor), and each Lender on the Agent's demand and the Security Trustee on its demand in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Creditor Party, or which that Creditor Party reasonably and with due diligence estimates that it will incur, as a result of or in connection with:

(r) the payments detailed in Clause 9.3(b) not being made on the date specified in the relevant Drawdown Notice for any reason other than a default by the Lender claiming the indemnity;

(s) funding, or making arrangements to fund, its participation in an Advance requested by a Borrower in a Drawdown Notice but not made or funded by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence solely by that Creditor Party);

(t) the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on the last day of an Interest Period or other relevant period;

(u) any failure (for whatever reason) by the Borrowers or any other Security Party to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the Borrowers on the amount concerned under Clause 7); or

(v) the occurrence of an Event of Default and/or the acceleration of repayment of the Loan under Clause 8 or Clause 20;

It is understood that the indemnities provided in this Clause 22.1 shall not apply to any claim cost or expense which is a tax levied by a taxing authority on the indemnified party (which taxes are subject to indemnity solely as provided in Clause 23 below) but shall apply to any other costs associated with any tax which is not a Non-indemnified Tax.

22.2 Breakage costs

Without limiting its generality, Clause 22.1 covers any claim, expense, liability or loss, including a loss of a prospective profit, incurred by a Lender:

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(q) in liquidating or employing deposits from third parties acquired or arranged to fund or maintain all or any part of its Contribution and/or any overdue amount (or an aggregate amount which includes its Contribution or any overdue amount); and

(r) in terminating, or otherwise in connection with, any interest and/or currency swap or any other transaction entered into (whether with another legal entity or with another office or department of the Lender concerned) to hedge any exposure arising under this Agreement or that part which the Lender concerned determines is fairly attributable to this Agreement of the amount of the liabilities, expenses or losses (including losses of prospective profits) incurred by it in terminating, or otherwise in connection with, a number of transactions of which this Agreement is one.

22.3 Miscellaneous indemnities

The Borrowers shall fully indemnify each Creditor Party, K-Sure and their respective directors, officers, employees, counsel, agents, trustees, advisors and attorneys-in-fact severally on their respective demands in respect of all claims, expenses, liabilities and losses which may be made or brought against or incurred by a Creditor Party, K-Sure, in any country, as a result of or in connection with:

(n) any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document or the K-Sure Insurance Policy by the Agent, the Security Trustee or any other Creditor Party or by any receiver appointed under a Finance Document;

(o) any other Pertinent Matter,

other than claims, expenses, liabilities and losses which are shown to have been caused by the gross negligence or willful misconduct of the Creditor Party concerned or its directors, officers or employees.

Without prejudice to its generality, this Clause 22.3 covers any claims, expenses, liabilities and losses which arise, or are asserted, under or in connection with any law relating to safety at sea, the ISM Code, the ISPS Code, any Sanctions Law or any Environmental Law.

22.4 Currency indemnity

If any sum due from a Borrower or any other Security Party to a Creditor Party under a Finance Document or under any order or judgment relating to a Finance Document has to be converted from the currency in which the Finance Document provided for the sum to be paid (the "Contractual Currency") into another currency (the "Payment Currency") for the purpose of:

(k) making or lodging any claim or proof against a Borrower or any other Security Party, whether in its liquidation, any arrangement involving it or otherwise; or

(l) obtaining an order or judgment from any court or other tribunal; or

(m) enforcing any such order or judgment,

the Borrowers shall indemnify the Creditor Party concerned against the loss arising when the amount of the payment actually received by that Creditor Party is converted at the available rate of exchange into the Contractual Currency.

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In this Clause 22.4, the "available rate of exchange" means the rate at which the Creditor Party concerned is able at the opening of business (London time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.

This Clause 22.4 creates a separate joint and several liability of the Borrowers which is distinct from its other liabilities under the Finance Documents and which shall not be merged in any judgment or order relating to those other liabilities.

22.5 Certification of amounts

A notice which is signed by an officer of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 22 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.

22.6 Sums deemed due to a Lender

For the purposes of this Clause 22, a sum payable by the Borrowers to the Agent or the Security Trustee for distribution to a Lender shall be treated as a sum due to that Lender.

23. NO SET-OFF OR TAX DEDUCTION; TAX INDEMNITY; FATCA

23.1 No deductions

All amounts due from a Security Party under a Finance Document shall be paid:

(s) without any form of set off, cross-claim or condition; and

(t) free and clear of any tax deduction except a tax deduction which such Security Party is required by law to make.

23.2 Grossing-up for taxes

If a Security Party is required by law to make a tax deduction from any payment:

(p) such Security Party shall notify the Agent as soon as it becomes aware of the requirement;

(q) such Security Party shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises; and

(r) except if the deduction is for collection or payment of a Non-indemnified Tax of a Creditor Party, the amount due in respect of the payment shall be increased by the amount necessary to ensure that each Creditor Party receives and retains (free from any liability relating to the tax deduction) a net amount which, after the tax deduction, is equal to the full amount which it would otherwise have received.

23.3 Evidence of payment of taxes

Within one (1) month after making any tax deduction, the relevant Security Party shall deliver to the Agent documentary evidence satisfactory to the Agent that the tax had been paid to the appropriate taxation authority.

23.4 Tax credits

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If a Creditor Party determines, in its reasonable discretion exercised in good faith that it has actually received or realized for its own account a repayment or credit in respect of tax on account of which the Borrowers have made an increased payment under Clause 23.2, such Creditor Party shall pay to the Relevant Borrower a sum equal to the proportion of the repayment or credit which that Creditor Party, in its reasonable discretion exercised in good faith, allocates to the amount due from the Borrowers in respect of which the Relevant Borrower made the increased payment, provided that:

(o) nothing in this Clause 23.4 shall oblige a Creditor Party to arrange its tax affairs in any particular manner, to claim any type of relief, credit, allowance or deduction instead of, or in priority to, another or to make any such claim within any particular time;

(p) nothing in this Clause 23.4 shall oblige a Creditor Party to make a payment which would leave it in a worse position than it would have been in if the Borrowers had not been required to make a tax deduction from a payment; and

(q) any allocation or determination made by a Creditor Party in its reasonable discretion exercised in good faith under or in connection with this Clause 23.4 shall be conclusive and binding on the Borrowers and the other Creditor Parties.

23.5 Indemnity for taxes

Each of the Borrowers and the Guarantor hereby indemnifies and agrees to hold each Creditor Party harmless from and against all taxes other than Non-indemnified Taxes levied on such Creditor Party (including, without limitation, taxes imposed on any amounts payable under this Clause 23.5) paid or payable by such person, whether or not such taxes or other taxes were correctly or legally asserted. Such indemnification shall be paid within 10 days from the date on which such Creditor Party makes written demand therefor specifying in reasonable detail the nature and amount of such taxes or other taxes.

23.6 Exclusion from indemnity and gross-up for taxes

The Borrowers and the Guarantor shall not be required to indemnify any Creditor Party for a tax pursuant to Clause 23.5, or to pay any additional amounts to any Creditor Party pursuant to Clause 23.2, to the extent that the tax is collected by withholding on payments (a "Withholding") and is levied by a Pertinent Jurisdiction of the payer and:

(d) the person claiming such indemnity or additional amounts was not an original party to this agreement and under applicable law (after taking into account relevant treaties and assuming that such person has provided all forms it may legally and truthfully provided) on the date such person became a party to this Agreement a Withholding would have been required on such payment, provided that this exclusion shall not apply to the extent such Withholding does not exceed the Withholding that would have been applicable if such payment had been made to the person from whom such person acquired its rights under the Agreement and this exclusion shall not apply to the extent that such Withholding exceeds the amount of Withholding that would have been required under the law in effect on the date such person became a party to this Agreement; or

(e) the person claiming such indemnity or additional amounts is a Lender who has changed its Lending Office and under applicable law (after taking into account relevant treaties and assuming that such Lender has provided all forms it may legally and truthfully provide) on the date such Lender changed its Lending Office a Withholding would have been required on such

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payment, provided that this exclusion shall not apply to the extent such Withholding does not exceed the Withholding that would have been applicable to such payment if such Lender had not changed its Lending Office and this exclusion shall not apply to the extent that the Withholding exceeds the amount of Withholding that would have been required under the law in effect immediately after such Lender changed its Lending Office; or

(f) in the case of a Lender, to the extent that Withholding would not have been required on such payment if such Lender has complied with its obligations to deliver certain tax form pursuant to Clause 23.7 below.

23.7 Delivery of tax forms

(a) In the event that Withholding taxes may be imposed under the laws of any Pertinent Jurisdiction in respect of payments on the Loan or other amounts due under this Agreement and if certain documentation provided by a Lender could reduce or eliminate such Withholding taxes under the laws of such Pertinent Jurisdiction or any treaty to which the Pertinent Jurisdiction is a party, then, upon written request by the Guarantor, a Lender that is entitled to an exemption from, or reduction in the amount of, such Withholding tax shall deliver to the Guarantor (with a copy to the Agent), at the time or times prescribed by applicable law or promptly after receipt of the Guarantor's request, whichever is later, such properly completed and executed documentation requested by the Guarantor, if any, as will permit such payments to be made without withholding or at a reduced rate of withholding; provided that such Lender is legally entitled to complete, execute and deliver such documentation and in such Lender's reasonable judgment such completion, execution or delivery would not materially prejudice the legal or commercial position of such Lender.

(b) Each Lender shall deliver such forms as required in this Clause 23.7 within 20 days after receipt of a written request therefor from the Agent or Guarantor.

(c) Notwithstanding any other provision of this Clause 23.7, a Lender shall not be required to deliver any form pursuant to this Clause 23.7 that such Lender is not legally entitled to deliver.

23.8 FATCA information

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

(i) confirm to that other party whether it is a FATCA Exempt Party or is not a FATCA Exempt Party; and

(ii) supply to the requesting party (with a copy to all other FATCA Relevant Parties) such other form or forms (including IRS Form W-8 or Form W-9 or any successor or substitute form, as applicable) and any other documentation and other information relating to its status under FATCA (including its applicable "passthru percentage" or other information required under FATCA or other official guidance including intergovernmental agreements) as the requesting party reasonably requests for the purpose of determining whether any payment to such party may be subject to any FATCA Deduction.

(g) If a FATCA Relevant Party confirms to any other FATCA Relevant Party that it is a FATCA Exempt Party or provides an IRS Form W-8 or W-9 to showing that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that party shall so notify all other FATCA Relevant Parties reasonably promptly.

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(h) Nothing in this Clause 23.8 shall obligate any FATCA Relevant Party to do anything which would or, in its reasonable opinion, might constitute a breach of any law or regulation, any policy of that party, any fiduciary duty or any duty of confidentiality, or to disclose any confidential information (including, without limitation, its tax returns and calculations); provided that nothing in this paragraph shall excuse any FATCA Relevant Party from providing a true complete and correct IRS Form W-8 or W-9 (or any successor or substitute form where applicable). Any information provided on such IRS Form W-8 or W-9 (or any successor or substitute forms) shall not be treated as confidential information of such party for purposes of this paragraph.

(i) If a FATCA Relevant Party fails to confirm its status or to supply forms, documentation or other information requested in accordance with the provisions of this agreement or the provided information is insufficient under FATCA, then:

(i) such party shall be treated as if it were a FATCA Non-Exempt Party; and

(ii) if that party failed to confirm its applicable passthru percentage then such party shall be treated for the purposes of the Finance Documents (and payments made thereunder) as if its applicable passthru percentage is 100%,

until (in each case) such time as the party in question provides sufficient confirmation, forms, documentation or other information to establish the relevant facts.

23.9 FATCA withholding

(d) A FATCA Relevant Party making a payment to any FATCA Non-Exempt Party shall make such FATCA Deduction as it determines is required by law and shall render payment to the IRS within the time allowed and in the amount required by FATCA.

(e) If a FATCA Deduction is required to be made by any FATCA Relevant Party to a FATCA Non-Exempt Party, the amount of the payment due from such FATCA Relevant Party shall be reduced by the amount of the FATCA Deduction reasonably determined to be required by such FATCA Relevant Party.

(f) Each FATCA Relevant Party shall promptly upon becoming aware that a FATCA Deduction is required with respect to any payment owed to it (or that there is any change in the rate or basis of a FATCA Deduction) notify each other FATCA Relevant Party accordingly.

(g) Within 30 days of making either a FATCA Deduction or any payment required in connection with that FATCA Deduction, the party making such FATCA Deduction shall deliver to the Agent for delivery to the party on account of whom the FATCA Deduction was made evidence reasonably satisfactory to that party that the FATCA Deduction has been made or (as applicable) any appropriate payment paid to the IRS.

(h) A FATCA Relevant Party who becomes aware that it must make a FATCA Deduction in respect of a payment to another FATCA Relevant Party (or that there is any change in the rate or basis of such FATCA Deduction) shall notify that party and the Agent.

(i) The Agent shall promptly upon becoming aware that it must make a FATCA Deduction in respect of a payment to a Lender which relates to a payment by a Borrower (or that there is any change in the rate or the basis of such a FATCA Deduction) notify the Borrowers and the relevant Lender.

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(j) If a FATCA Deduction is made as a result of any Creditor Party failing to be a FATCA Exempt Party, such party shall indemnify each other Creditor Party against any loss, cost or expense to it resulting from such FATCA Deduction.

23.10 FATCA mitigation

Notwithstanding any other provision of this Agreement, if a FATCA Deduction is or will be required to be made by any party under Clause 23.10 in respect of a payment to any FATCA Non-Exempt Lender, the FATCA Non-Exempt Lender may either:

(d) transfer its entire interest in the Loan to a U.S. branch or Affiliate, or

(e) nominate one or more transferee lenders who upon becoming a Lender would be a FATCA Exempt Party, by notice in writing to the Agent and the Borrowers specifying the terms of the proposed transfer, and cause such transferee lender(s) to purchase all of the FATCA Non-Exempt Lender's interest in the Loan.

23.11    Benefit of this Clause

K-Sure will have the benefit of a Lender's rights under this Clause 23 to the extent that such Lender's rights under this Clause 23 have been fully or partly and properly assigned, transferred, subrogated or novated to K-Sure, together with any other ancillary rights under the Finance Documents required to give effect to this Clause 23.

24. ILLEGALITY, ETC

24.1 Illegality

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

(s) the Notifying Lender shall promptly notify the Agent upon becoming aware of that event;

(t) upon the Agent notifying the Borrowers and the other Creditor Parties, the Commitment of the Notifying Lender will be immediately cancelled; and

(u) each Borrower shall jointly and severally repay the Notifying Lender's participation in each Advance on the last day of the Interest Period for each Advance occurring after the Agent has notified the Borrowers or, if earlier, the date specified by the Notifying Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law) without premium or penalty.

24.2 Mitigation

If circumstances arise which would result in a notification under Clause 24.1 then, without in any way limiting the obligations of the Borrowers under Clause 24.1, the Notifying Lender shall use reasonable commercial efforts to transfer its obligations, liabilities and rights under this Agreement and the Finance Documents to another office or financial institution not affected by the circumstances but the Notifying Lender shall not be under any obligation to take any such action if, in its opinion, to do would or might:

(n) have an adverse effect on its business, operations or financial condition; or

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(o) involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or

(p) involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.

24.3 Limitation of Liability

The Borrowers shall promptly indemnify the Notifying Lender for all costs and expenses reasonably incurred by that Notifying Lender as a result of any action taken by it under Clause 24.2, provided that, the Borrowers have received evidence of the amount of such costs and expenses actually incurred.

25. INCREASED COSTS

25.1 Increased costs

This Clause 25 applies if a Lender (the "Notifying Lender") notifies the Agent that as a result of:

(q) the introduction or alteration after the Effective Date of a law or an alteration after the Effective Date in the manner in which a law is interpreted or applied (disregarding any effect which relates to the application to payments under this Agreement of a Non‑Indemnified tax); or

(r) complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Notifying Lender allocates capital resources to its obligations under this Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the Effective Date;

(s) any introduction, change, clarification or publication relating to Basel III or CRD IV to the extent such increased costs were not capable of being calculated with sufficient accuracy prior to the Effective Date due to a lack of clarity or detail in Basel III or CRD IV and/or any related information from a banking regulator available as at the Effective Date,

the Notifying Lender (or a parent company of it) has incurred or will incur an increased cost.

Notwithstanding anything herein to the contrary, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and all requests, rules, guidelines and directives promulgated thereunder, are deemed to have been introduced or adopted after the date hereof, regardless of the date enacted or adopted.

25.2 Meaning of increased costs

In this Clause 25, "increased costs" means, in relation to a Notifying Lender:

(r) an actual additional or increased cost incurred as a result of, or in connection with, the Notifying Lender having entered into, or being a party to, this Agreement or having taken an assignment of rights under this Agreement, of funding or maintaining its Commitment or Contribution or performing its obligations under this Agreement, or of having outstanding all or any part of its Contribution or other unpaid sums;

(s) a reduction in the amount of any payment to the Notifying Lender under this Agreement or in the effective return which such a payment represents to the Notifying Lender or on its capital;

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(t) an actual additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Notifying Lender's Contribution or (as the case may require) the proportion of that cost attributable to the Contribution; or

(u) a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Notifying Lender under this Agreement.

For the purposes of this Clause 25.2 the Notifying Lender shall in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class of its assets and liabilities) on such basis as it considers appropriate.

25.3 Notification to the Borrowers of claim for increased costs

The Agent shall promptly notify the Borrowers and the other Security Parties of the notice which the Agent received from the Notifying Lender under Clause 25.1.

25.4 Payment of increased costs

The Borrowers shall pay to the Agent, on the Agent's demand, for the account of the Notifying Lender the amounts which the Agent from time to time notifies the Borrowers that the Notifying Lender has specified to be necessary to compensate the Notifying Lender for the increased cost.

25.5 Notice of prepayment

If the Borrowers are not willing to continue to compensate the Notifying Lender for the increased cost under Clause 25.4, the Borrowers may give the Agent not less than 14 days' notice of their intention to prepay the Notifying Lender's Contribution at the end of an Interest Period.

25.6 Prepayment; termination of Commitment

A notice under Clause 25.5 shall be irrevocable; the Agent shall promptly notify the Notifying Lender of the Borrowers' notice of intended prepayment; and:

(j) on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled; and

(k) on the date specified in its notice of intended prepayment, the Borrowers shall prepay (without premium or penalty) the Notifying Lender's Contribution, together with accrued interest thereon at the applicable rate plus the Margin and the Mandatory Cost (if any).

25.7 Application of prepayment

Clause 8 shall apply in relation to the prepayment.

25.8 Mitigation

(f) The Notifying Lender shall, in consultation with the Guarantor, take all reasonable steps to mitigate any circumstances which arise and would result in any amount becoming payable under or pursuant to, or cancelled pursuant to or in connection with, Clause 25.1 including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Lending Office; and

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

25.9 Limitation of Liability

(f) The Borrowers shall promptly indemnify the Notifying Lender for all costs and expenses reasonably incurred by that Notifying Lender as a result of any action taken by it under Clause 25.8, provided that, the Borrowers have received evidence of the amount of such costs and expenses actually incurred; and

(g) The Notifying Lender shall not be under any obligation to take any action under Clause 25.8 if, in its opinion (acting reasonably), to do would or might:

(i) have an adverse effect on its business, operations or financial condition; or

(ii) involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or

(iii) involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.

26. SET OFF

26.1 Application of credit balances

Upon the occurrence and during the continuance of an Event of Default, each Creditor Party may without prior notice:

(v) apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of any of the Borrowers or the Guarantor at any office in any country of that Creditor Party in or towards satisfaction of any sum then due from any of the Borrowers or the Guarantor to that Creditor Party under any of the Finance Documents; and

(w) for that purpose:

(i) break, or alter the maturity of, all or any part of a deposit of any of the Borrowers or the Guarantor;

(ii) convert or translate all or any part of a deposit or other credit balance into Dollars; and

(iii) enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate.

26.2 Existing rights unaffected

No Creditor Party shall be obliged to exercise any of its rights under Clause 26.1; and those rights shall be without prejudice and in addition to any right of set off, combination of accounts, charge, lien or other right or remedy to which a Creditor Party is entitled (whether under the general law or any document).

26.3 Sums deemed due to a Lender

For the purposes of this Clause 26, a sum payable by any of the Borrowers or the Guarantor to the Agent or the Security Trustee for distribution to, or for the account of, a Lender shall be treated as a

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sum due to that Lender; and each Lender's proportion of a sum so payable for distribution to, or for the account of, the Lenders shall be treated as a sum due to such Lender.

26.4 No Security Interest

This Clause 26 gives the Creditor Parties a contractual right of set-off only, and does not create any Security Interest over any credit balance of any of the Borrowers or the Guarantor.

27. TRANSFERS AND CHANGES TO THE PARTIES

27.1 Transfer by the Borrowers or the Guarantor

Neither the Guarantor nor any of the Borrowers may, without the consent of the Agent, given on the instructions of all Lenders and K-Sure, transfer any of its rights, liabilities or obligations under any Finance Document.

27.2 Transfer by a Lender

(g) Subject to Clause 27.5 and Clause 27.18, a Lender (the "Transferor Lender") may at any time, without any additional costs to, but with the prior written consent (unless (i) the transfer is to an Affiliate of the Transferor Lender or (ii) in the case of the Commercial Fixed Rate Loan only, the transfer is to KDB KIAMCO Fund or (iii) an Event of Default has occurred and is continuing) of, the (1) the Borrowers; (2) Agent; (3) in relation to the K-Sure Lenders only (the "K-Sure Transferor Lenders"), K-Sure; (4) in relation to the KEXIM Guaranteed Lenders only (the "KEXIM Transferor Lenders"), KEXIM and (5) the Guarantor (such consent not to be unreasonably withheld or delayed and to be deemed granted within 15 Business Days from the day it has been sought unless it has been expressly refused within that period), cause:

(vi) its rights in respect of all or part of its Contribution; or

(vii) its obligations in respect of all or part of its Commitment; or

(viii) a combination of (i) and (ii),

to be (in the case of its rights) transferred to, or (in the case of its obligations) assumed by, another bank or financial institution (a "Transferee Lender") which is (A) regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets including (without limitation) K-Sure or KEXIM, as the case may be and (B) not an Affiliate of the Borrowers by delivering to the Agent a completed certificate in the form set out in Schedule 4 with any modifications approved or required by the Agent (a "Transfer Certificate") executed by the Transferor Lender and the Transferee Lender provided that the amount of the Contribution and/or Commitment of the Lender which is to be transferred shall not be less than $5,000,000 (unless (i) the entirety of the Transferor Lender's Contribution and/or Commitment is less than $5,000,000 in which case the Transferor Lender may transfer the entire amount remaining or (ii) in the case of the Commercial Fixed Rate Loan only, the Transferor Lender may transfer the amount of the Contributions then held by the Transferor Lender).

Notwithstanding the foregoing, any rights and obligations of the Transferor Lender in its capacity as Agent or Security Trustee shall be determined in accordance with Clause 31.

(h) To the extent that it is required to do so by K-Sure pursuant to the terms of any K-Sure Insurance Policy, the K-Sure Transferor Lender shall cause a transfer to K-Sure in respect of such part of its Commitment or (as the case may be) its portion of the relevant Advance under the K-Sure Loan as is equal to the

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amount simultaneously paid to it by K-Sure under the relevant K-Sure Insurance Policy, provided however that this shall not be construed as depriving any K-Sure Transferor Lender of its rights to recover any part of the Total Commitments, Loan or otherwise of the Secured Liabilities owing to it after receipt of the relevant K-Sure Insurance Policy insurance proceeds.

(i) For the avoidance of doubt and without prejudice to the generality of the foregoing, in the event that K-Sure pays out in full or in part the insurance proceeds in accordance with the terms of any K-Sure Insurance Policy, then, subject to the terms of the relevant K-Sure Insurance Policy, the following shall apply:

(i) the obligations of the Security Parties under this Agreement and each of the Finance Documents shall neither be reduced nor affected in any way;

(ii) K-Sure shall be entitled to the extent of such payment to exercise all rights of the K‑Sure Lenders (whether present or future) against the Security Parties pursuant to this Agreement and the Finance Documents or any relevant laws and/or regulations, as the case may be in respect of the Ships and solely to the extent that these relate to such payment (but without prejudice to the exercise of such rights by the other Creditor Parties) unless and until such insurance proceeds and the interest accrued on them are fully reimbursed to K-Sure; and

(iii) with respect to the obligations of the Security Parties owed to the Agent and/or the K‑Sure Lenders under the Finance Documents (or any of them), such obligations shall additionally be owed to K-Sure by way of subrogation of the rights of the K-Sure Lenders.

(j) To the extent that it is required to do so by KEXIM pursuant to the terms of the KEXIM Guarantee, the KEXIM Transferor Lender shall cause a transfer to KEXIM in respect of such part of its Commitment or (as the case may be) its portion of the relevant Advance under the KEXIM Guaranteed Loan as is equal to the amount simultaneously paid to it by KEXIM under the KEXIM Guarantee, provided however that this shall not be construed as depriving any KEXIM Transferor Lender of its rights to recover any part of the Total Commitments, Loan or otherwise of the Secured Liabilities owing to it after receipt of the KEXIM Guarantee insurance proceeds.

(k) For the avoidance of doubt and without prejudice to the generality of the foregoing, in the event that KEXIM pays out in full or in part the guarantee proceeds in accordance with the terms of the KEXIM Guarantee:

(iii) the obligations of the Security Parties under this Agreement and each of the Finance Documents shall neither be reduced nor affected in any way;

(iv) KEXIM shall be entitled to the extent of such payment to exercise all rights of the KEXIM Guaranteed Lenders (whether present or future) against the Security Parties pursuant to this Agreement and the Finance Documents or any relevant laws and/or regulations, as the case may be in respect of the Ships and solely to the extent that these relate to such payment (but without prejudice to the exercise of such rights by the other Creditor Parties) unless and until such insurance proceeds and the interest accrued on them are fully reimbursed to KEXIM; and

(v) with respect to the obligations of the Security Parties owed to the Agent and/or the KEXIM Guaranteed Lenders under the Finance Documents (or any of them), such obligations shall additionally be owed to KEXIM by way of subrogation of the rights of the KEXIM Guaranteed Lenders.

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27.3 Transfer Certificate, delivery and notification

As soon as reasonably practicable after a Transfer Certificate is delivered to the Agent, it shall (unless it has reason to believe that the Transfer Certificate may be defective):

(d) sign the Transfer Certificate on behalf of itself, the Borrowers, the other Security Parties, the Security Trustee and each of the other Lenders;

(e) on behalf of the Transferee Lender, send to the Borrowers and each other Security Party letters or faxes notifying them of the Transfer Certificate and attaching a copy of it;

(f) send to the Transferee Lender copies of the letters or faxes sent under paragraph (b),

but the Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Transferor Lender and the Transferee Lender once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations to the transfer to that Transferee Lender.

27.4 Effective Date of Transfer Certificate

A Transfer Certificate becomes effective on the date, if any, specified in the Transfer Certificate as its effective date, provided that it is signed by the Agent under Clause 27.3 on or before that date.

27.5 No transfer without Transfer Certificate

Except as provided in Clause 27.17, no assignment or transfer of any right or obligation of a Lender under any Finance Document is binding on, or effective in relation to, the Borrowers, any other Security Party, the Agent or the Security Trustee unless it is effected, evidenced or perfected by a Transfer Certificate.

27.6 Lender re-organization; waiver of Transfer Certificate

If a Lender enters into any merger, de-merger or other reorganization as a result of which all its rights or obligations vest in a successor, the Agent may, in its sole discretion, by notice to the successor and the Borrowers and the Security Trustee waive the need for the execution and delivery of a Transfer Certificate and, upon service of the Agent's notice, the successor shall become a Lender with the same Commitment and Contribution as were held by the predecessor Lender.

27.7 Effect of Transfer Certificate

The effect of a Transfer Certificate is as follows:

(h) to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents are assigned to the Transferee Lender absolutely, free of any defects in the Transferor Lender's title and of any rights or equities which the Borrowers or any other Security Party had against the Transferor Lender;

(i) the Transferor Lender's Commitment is discharged to the extent specified in the Transfer Certificate;

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(j) the Transferee Lender becomes a Lender with the Contribution previously held by the Transferor Lender and a Commitment of an amount specified in the Transfer Certificate;

(k) the Transferee Lender becomes bound by all the provisions of the Finance Documents which are applicable to the Lenders generally, including but not limited to those about pro rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them;

(l) any part of the Loan which the Transferee Lender advances after the Transfer Certificate's effective date ranks in point of priority and security in the same way as it would have ranked had it been advanced by the transferor, assuming that any defects in the transferor's title and any rights or equities of the Borrowers or any other Security Party against the Transferor Lender had not existed;

(m) the Transferee Lender becomes entitled to all the rights under the Finance Documents which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under Clause 5.8 and Clause 21, and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and

(n) in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with a Finance Document, the Transferee Lender shall be entitled to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount.

The rights and equities of the Borrowers or any other Security Party referred to above include, but are not limited to, any right of set off and any other kind of cross claim.

27.8 Maintenance of register of Lenders

During the Security Period the Agent shall maintain a register in which it shall record the name, Commitment, Contribution and administrative details (including the lending office) from time to time of each Lender holding a Transfer Certificate and the effective date (in accordance with Clause 27.4) of the Transfer Certificate; and the Agent shall make the register available for inspection by any Lender, the Security Trustee and the Borrowers during normal banking hours, subject to receiving at least 3 Business Days' prior notice.

27.9 Reliance on register of Lenders

The entries on that register shall, in the absence of manifest error, be conclusive in determining the identities of the Lenders and the amounts of their Commitments and Contributions and the effective dates of Transfer Certificates and may be relied upon by the Agent and the other parties to the Finance Documents for all purposes relating to the Finance Documents.

27.10 Authorization of Agent to sign Transfer Certificates

The Borrowers, the Guarantor, the Security Trustee and each Lender irrevocably authorize the Agent to sign Transfer Certificates on its behalf.

27.11 Registration fee

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In respect of any Transfer Certificate (unless in the case of the Commercial Fixed Rate Loan only the transfer is to KDB KIAMCO Fund) the Agent shall be entitled to recover a registration fee of $7,500 from the Transferor Lender or (at the Agent's option) the Transferee Lender. For any change of Lending Office involving a change in country and/or tax identification number, the Agent shall be entitled to recover a registration fee of $3,750 from the relevant Lender.

27.12 Sub-participation; subrogation assignment

A Lender may sub-participate all or any part of its rights and/or obligations under or in connection with the Finance Documents without the consent of, or any notice to, the Borrowers, any other Security Party, the Agent or the Security Trustee; and the Lenders may assign, in any manner and terms agreed by the Majority Lenders, the Agent and the Security Trustee, all or any part of those rights to an insurer or surety who has become subrogated to them.

27.13 Disclosure of information

A Lender may disclose any information which the Lender has received in relation to the Borrowers, any other Security Party or their affairs under or in connection with any Finance Document, so long as each such party (in the case of paragraphs (b)- (f) below) agrees to keep such information, which is not already publicly available, confidential, to:

(c) any private, public or internationally recognized authorities that are entitled to and have requested to obtain such information;

(d) the Creditor Parties' respective head offices, branches and affiliates and professional advisors, together with any person who has any participation or involvement with the K-Sure Policy or KEXIM Guarantee;

(e) any other parties to the Finance Documents;

(f) a rating agency or their professional advisors;

(g) any person with whom such Creditor Party proposes to enter (or considers entering) into contractual relations in relation to its Commitment or Contribution; and

(h) any other person regarding the funding, re-financing, transfer, assignment, sale, sub‑participation or operational arrangement or other transaction in relation to its Contribution or its Commitment, including without limitation, for purposes in connection with a securitization or any enforcement, preservation, assignment, transfer, sale or sub-participation of any of such Creditor Parties' rights and obligations.

Where a Lender (the “Processor”) has been supplied by the Borrowers, the Guarantor or any other Security Party with personal data of third party individuals to fulfil its anti-terrorist legislation-related obligations, the Borrowers, the Guarantor and other Security Parties confirm that they have provided such individuals with the information as is required under data protection legislation, which includes but it not limited to, the identity of the Processor, the purpose for processing, how the Processor and/or such individuals might exercise their rights under the legislation and that the Processor as a global corporate may transfer their data to countries that do not offer the same level of protections.

A Lender and its Affiliates will not be precluded in any manner or in any way from providing, arranging or participating in any financing for, providing advisory or other services to third parties in, or acting

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as principal in, transactions which may involve the Borrowers or any other Security Party or any other party; provided that such Lender does not disclose any confidential information in connection therewith.

27.14 Change of lending office

A Lender may change its lending office by giving notice to the Agent and the change shall become effective on the later of:

(a) the date on which the Agent receives the notice; and

(b) the date, if any, specified in the notice as the date on which the change will come into effect.

27.15 Notification

On receiving such a notice, the Agent shall notify the Borrowers and the Security Trustee; and, until the Agent receives such a notice, it shall be entitled to assume that a Lender is acting through the lending office of which the Agent last had notice.

27.16 Replacement of Reference Bank

If any Reference Bank ceases to be a Lender or is unable on a continuing basis to supply quotations for the purposes of Clause 5 then, unless the Borrowers, the Agent and the Majority Lenders otherwise agree, the Agent, acting on the instructions of the Majority Lenders, and after consulting the Borrowers, shall appoint another bank (whether or not a Lender) to be a replacement Reference Bank; and, when that appointment comes into effect, the first mentioned Reference Bank's appointment shall cease to be effective.

27.17 Security over Lenders' rights

In addition to the other rights provided to Lenders under this Clause 27, each Lender may without consulting with or obtaining consent from the Borrowers or any other Security Party, at any time charge, assign or otherwise create a Security Interest in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:

(a) any charge, assignment or other Security Interest in favour of KEXIM or K-Sure or any security trustee on its behalf (other than assignment pursuant to Clause 28.1(a));

(b) any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and

(c) in the case of any Lender which is a fund, any charge, assignment or other Security Interest granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities;

except that no such charge, assignment or Security Interest shall:

(iii) release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security Interest for the Lender as a party to any of the Finance Documents; or

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(iv) require any payments to be made by the Borrowers or any other Security Party or grant to any person any more extensive rights than those required to be made or granted to the relevant Lender under the Finance Documents.

27.18 Agent as Lender

Unless an Event of Default has occurred, DNB Capital LLC (as an affiliate of the Agent) may not, without the consent of KEXIM (such consent not to be unreasonably withheld or delayed), transfer its participation in the Commercial Loan if such transfer would result in DNB Capital LLC (as an affiliate of the Agent) holding less than ten percent (10%) of the Commercial Loan outstanding at such time. For the avoidance of doubt, such restriction on transfer is only applicable for transfers of less than one hundred per cent (100%) of DNB Capital LLC's Commitment and not applicable due to amortisation of the Commercial Loan.

28. K-SURE

28.1 Assignment to K-Sure

Each of the parties agrees that, upon payment in full or in part by K-Sure of all moneys due under a K-Sure Insurance Policy in accordance with the terms of any K-Sure Insurance Policy, provided that, to the extent required under the relevant K-Sure Insurance Policy, this payment has satisfied the Secured Liabilities in full or in part in respect of the relevant Advance under the K-Sure Loan to which such K-Sure Insurance Policy relates:

(l) each of the K-Sure Lenders shall assign to K-Sure, upon K-Sure's request, its rights to recover against the relevant Borrower and the Guarantor (as applicable) such amount that has been paid by K-Sure, provided that this shall not be construed as depriving any K-Sure Lender of its rights to recover any part of the Total Commitments, the Loan or otherwise of the Secured Liabilities still owing to it after receipt of the relevant K-Sure Insurance Policy insurance proceeds;

(m) until the assignment referred to in paragraph (a), each of the K-Sure Lenders shall hold in trust for K-Sure any payments made under this Agreement or any of the other Finance Documents and pay or transfer them to K-Sure in accordance with the relevant K-Sure Insurance Policy;

(n) in the event of an assignment pursuant to paragraph (a), K-Sure shall, upon receipt by the Agent of a duly completed Transfer Certificate in accordance with the provisions of Clause 27, be an assignee and as such shall be entitled to the rights and benefits of the K-Sure Lenders under this Agreement and the other Finance Documents in respect of such payment to the extent of its interest; and

(o) without prejudice to the indemnity provisions in Clause 22, the Borrowers shall indemnify K-Sure in respect of any withholding taxes, out-of-pocket costs or expenses (including reasonable and documented legal fees) suffered or incurred by K-Sure in connection with the assignment referred to in this Clause 28.1, any payments by the K-Sure Lenders to K-Sure referred to in this Clause 28.1 or in connection with any review by K-Sure of any Event of Default or dispute between the Borrowers and/or any Security Party and the Creditor Parties occurring prior to the assignment referred to in this Clause 28.1,

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provided that nothing in this Clause 28.1 shall be construed as depriving the K-Sure Lenders of any rights they may have against any Borrowers or any other Security Party in respect of the Lenders' rights under Clauses 22 and 25.

28.2 Cooperation with K-Sure; Events of Default

(g) Each of the K-Sure Agent, the Agent and the Security Trustee shall provide to K-Sure any information which it receives from the Borrowers and any other Security Party pursuant to the Finance Documents, including information regarding the Loan and the Obligors as reasonably requested by K-Sure.

(h) Each of the K-Sure Agent, the Agent and the Security Trustee agrees that it shall consult with K-Sure wherever reasonably practical prior to issuing a notice pursuant to Clause 20, provided however that K-Sure's consent shall not be required in order for any such notice of default to be issued (other than by K-Sure to the extent required under any K-Sure Insurance Policy).

(i) Notwithstanding anything to the contrary in any Finance Document, if an Event of Default has occurred and is continuing, the Agent shall put to the vote of the Majority Lenders the question of whether the provisions of the Finance Documents as to the consequences of the occurrence of such Event of Default should apply and/or whether the remedies afforded under Clause 20 of this Agreement should be invoked. Should the Majority Lenders vote in favor of any of actions described in the preceding sentence, the Agent and the Security Trustee shall be entitled to take the necessary steps to enforce the Finance Documents and the Lenders shall agree and execute and otherwise perfect and do all such acts and things necessary for such purpose.

28.3 K-Sure override

Notwithstanding anything to the contrary in this Agreement or any other Finance Document, nothing in this Agreement shall permit or oblige any K-Sure Lender to act (or omit to act) in a manner that is inconsistent with any requirement of K-Sure under or in connection with any K‑Sure Insurance Policy and, in particular:

(l) each of the K-Sure Lenders shall be authorised to take all such actions as they may deem necessary to ensure that all requirements of K-Sure under or in connection with each of the K-Sure Insurance Policies are complied with; and

(m) no K-Sure Lender shall be obliged to do anything if, in its opinion (upon consultation with K-Sure), to do so could result in a breach of any requirements of K-Sure under or in connection with a K-Sure Insurance Policy or affect the validity of a K-Sure Insurance Policy.

28.4 Liability for the K-Sure Premiums

The Borrowers shall be responsible and shall bear the cost of the K-Sure Premium of each K‑Sure Insurance Policy and shall pay the relevant K-Sure Premium on the Drawdown Date relating to a Ship.

28.5 K-Sure Insurance Policies

(h) The Borrowers will not, without the K-Sure Agent's prior written consent, do or omit to do anything which may adversely prejudice the K-Sure Lenders' rights under any K-Sure Insurance Policy.

(i) The K-Sure Agent and the K-Sure Lenders are responsible for complying with their respective obligations under the terms of each K-Sure Insurance Policy from which each K-Sure Lender benefits.

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28.6 K-Sure Requirements

Each Borrower must execute all such other documents and instruments and do all such other acts and things as the K-Sure Agent, acting on the instructions of K-Sure and/or any Creditor Party may reasonably require:

(o) in order to comply with, and carry out the transactions contemplated by, the Finance Documents and any documents required to be delivered under the Finance Documents; and

(p) in order for the beneficiaries under each K-Sure Insurance Policy to comply with and continue to benefit from that K-Sure Insurance Policy or to maintain the effectiveness of that K-Sure Insurance Policy.

28.7 Protection of each K-Sure Insurance Policies

If at any time in the reasonable opinion of the Agent, any provision of a Finance Document contradicts or conflicts (as such conflict relates to the K-Sure Loan) with any provision of a K‑Sure Insurance Policy or K-Sure requires any further action to be taken or documents to be entered into for such K-Sure Insurance Policy to remain in full force and effect, the Borrowers shall take such action as the K-Sure Agent or K-Sure shall reasonably require to remove any contradiction or conflict and to ensure each K-Sure Insurance Policy remain in full force and effect. In addition, the Borrowers shall comply with any instructions given by K-Sure to the K-Sure Agent in relation to each K-Sure Insurance Policy and the transactions contemplated in each K‑Sure Insurance Policy provided that such instructions are in compliance with that K-Sure Insurance Policy.

28.8 Notification

(e) The Borrowers will deliver a notice to each of the Agent and the K-Sure Agent promptly after they become aware of the occurrence of any political or commercial risk covered by a K-Sure Insurance Policy and will:

(iv) pay any additional premium payable to K-Sure in relation to the relevant K-Sure Insurance Policy; and

(v) co-operate with the K-Sure Agent on its reasonable request to take all steps necessary on the part of the Borrowers to ensure that the relevant K-Sure Insurance Policy remain in full force and effect throughout the Security Period which shall include providing the K-Sure Agent with any information, whether or not requested by the K-Sure Agent, relating to any material commercial facts which could result in a Material Adverse Effect.

(f) In addition, the Borrowers shall promptly supply to the K-Sure Agent copies of all financial or other information reasonably required by the K-Sure Agent to satisfy any request for information made by K-Sure pursuant to a K-Sure Insurance Policy.

(g) The Borrowers agree that it shall be reasonable for the K-Sure Agent to make a request under this Clause 28 if it is required to do so as a condition of maintaining a K-Sure Insurance Policy in full force and effect.

28.9 Prior consultation with K-Sure

Each Borrower acknowledges that the K-Sure Agent may, under the terms of each K-Sure Insurance Policy be required:

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(a) to consult with K-Sure, prior to the exercise of certain decisions under the Finance Documents to which that Borrower is a party (including the exercise of such voting rights in relation to any substantial amendment to any Finance Document); and

(b) to follow certain instructions given by K-Sure.

Each Creditor Party will be deemed to have acted reasonably if it has acted on the instructions of the K-Sure Agent (given by K-Sure to the K-Sure Agent in accordance with the terms of a K-Sure Insurance Policy) in the making of any such decision or the taking or refraining to take any action under any Finance Document to which it is a party.

28.10 Conflict

As between the Security Parties and the K-Sure Lenders, in case of any conflict between the Finance Documents and any K-Sure Insurance Policy, that K-Sure Insurance Policy shall prevail, and to the extent of such conflict or inconsistency, none of the K-Sure Lenders shall assert to K-Sure, the terms of the relevant Finance Documents.

28.11 Demand under K-Sure Insurance Policies

Notwithstanding any other terms as set forth herein and the other Finance Documents, the Agent (or K-Sure Agent, as the case may be) shall only make a written demand to K-Sure under a K-Sure Insurance Policy after the Agent has first (i) made a written demand for payment of the relevant amount of the Secured Liabilities to the Guarantor pursuant to Clause 16 and (ii) initiated the enforcement of all other Security Interests granted to the Creditor Parties by any Obligor.

29. KEXIM

29.1 Assignment to KEXIM

Each of the parties agrees that, upon payment in full or in part by KEXIM of all moneys due under the KEXIM Guarantee in accordance with the terms of the KEXIM Guarantee, provided that, to the extent required under the KEXIM Guarantee, this payment has satisfied the Secured Liabilities in full or in part in respect of the relevant Advance under the KEXIM Guaranteed Loan to which the KEXIM Guarantee relates:

(j) each of the KEXIM Guaranteed Lenders shall assign to KEXIM such part of their respective Contributions in respect of that KEXIM Guaranteed Loan and (to the extent that there remain any) of their respective Contributions in respect of that KEXIM Guaranteed Loan as is equal to the amount simultaneously paid to it by KEXIM under the KEXIM Guarantee, provided that this shall not be construed as depriving any KEXIM Lender of its rights to recover any part of the Total Commitments, the Loan or otherwise of the Secured Liabilities still owing to it after receipt of the KEXIM Guarantee proceeds;

(k) KEXIM shall, upon receipt by the Agent of a duly completed Transfer Certificate in accordance with the provisions of Clause 27, be an assignee and as such shall be entitled to the rights and benefits of the KEXIM Guaranteed Lenders under this Agreement and the other Finance Documents in respect of such payment to the extent of its interest;

(l) without prejudice to the indemnity provisions in Clause 22, the Borrowers shall indemnify KEXIM in respect of any out-of-pocket costs or expenses (including reasonable and documented legal fees) suffered or incurred by KEXIM in connection with the assignment

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referred to in this Clause 29.1 or in connection with any review by KEXIM of any Event of Default or dispute between the Borrowers and/or any Security Party and the Creditor Parties occurring prior to the assignment referred to in this Clause 29.1; and

(m) with respect to the obligations of the Borrowers and the Security Parties owed to the Agent and/or the KEXIM Guaranteed Lenders under the Finance Documents, such obligations shall additionally be owed to KEXIM by way of subrogation of the rights of the KEXIM Guaranteed Lenders;

provided that nothing in this Clause 29.1 shall be construed as depriving the KEXIM Guaranteed Lenders of any rights they may have against any Borrowers or any other Security Party in respect of the Lenders' rights under Clauses 22 and 25.

29.2 Cooperation with KEXIM; Events of Default

(n) Each of the KEXIM Guaranteed Loan Agent, the Agent and the Security Trustee shall provide to KEXIM any information which it receives from the Borrowers and any other Security Party pursuant to the Finance Documents, including information regarding the Loan and the Obligors as reasonably requested by KEXIM.

(o) Each of the KEXIM Guaranteed Loan Agent, the Agent and the Security Trustee agrees that it shall consult with KEXIM wherever reasonably practical prior to issuing a notice pursuant to Clause 20, provided however that KEXIM's consent shall not be required in order for any such notice of default to be issued (other than by KEXIM to the extent required under the KEXIM Guarantee).

(p) Notwithstanding anything to the contrary in any Finance Document:

(v) if an Event of Default has occurred and is continuing, the Agent shall put to the vote of the Majority Lenders and KEXIM the question of whether the provisions of the Finance Documents as to the consequences of the occurrence of such Event of Default should apply and/or whether the remedies afforded under Clause 20 of this Agreement should be invoked. Should the Majority Lenders and KEXIM vote in favor of any of actions described in the preceding sentence, the Agent and the Security Trustee shall be entitled to take the necessary steps to enforce the Finance Documents and the Lenders shall agree and execute and otherwise perfect and do all such acts and things necessary for such purpose;

(vi) in the event the Majority Lenders' and KEXIM's respective positions are inconsistent, the Agent shall discuss with KEXIM with a view to reaching a mutually agreeable position. Failing agreement between the Agent (acting on behalf of the Majority Lenders) and KEXIM, the Agent and the Security Trustee shall be entitled to act in accordance with the instructions of the Majority Lenders, including in relation to any waiver of an Event of Default and enforcement of remedies related thereto.

29.3 KEXIM override

Notwithstanding anything to the contrary in this Agreement or any other Finance Document, nothing in this Agreement shall permit or oblige any KEXIM Guaranteed Lender to act (or omit to act) in a manner that is inconsistent with any requirement of KEXIM under or in connection with the KEXIM Guarantee and, in particular:

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(k) each of the KEXIM Guaranteed Lenders shall be authorised to take all such actions as they may deem necessary to ensure that all requirements of KEXIM under or in connection with the KEXIM Guarantee are complied with; and

(l) no KEXIM Lender shall be obliged to do anything if, in its opinion (upon consultation with KEXIM), to do so could result in a breach of any requirements of KEXIM under or in connection with the KEXIM Guarantee or affect the validity of the KEXIM Guarantee.

29.4 Liability for the KEXIM Guarantee Premiums

The Borrowers shall be responsible and shall bear the cost of the KEXIM Guarantee Premium and shall pay the KEXIM Guarantee Premium on or before the date if this Agreement.

29.5 KEXIM Guarantee

(q) The Borrowers will not, without KEXIM's prior written consent, do or omit to do anything which may adversely prejudice the KEXIM Guaranteed Lenders' rights under the KEXIM Guarantee.

(r) The KEXIM Guaranteed Lenders are responsible for complying with the terms of the KEXIM Guarantee from which each KEXIM Guaranteed Lender benefits.

29.6 KEXIM Requirements

Each Borrower must execute all such other documents and instruments and do all such other acts and things as KEXIM and/or any Creditor Party may reasonably require:

(a) in order to comply with, and carry out the transactions contemplated by, the Finance Documents and any documents required to be delivered under the Finance Documents; and

(b) in order for the beneficiaries under the KEXIM Guarantee to comply with and continue to benefit from the KEXIM Guarantee or to maintain the effectiveness of the KEXIM Guarantee.

29.7 Protection of each KEXIM Guarantee

If at any time in the reasonable opinion of the Agent, any provision of a Finance Document contradicts or conflicts (as such conflict relates to the KEXIM Guaranteed Loan) with any provision of the KEXIM Guarantee or KEXIM requires any further action to be taken or documents to be entered into for the KEXIM Guarantee to remain in full force and effect, the Borrowers shall take such action as the KEXIM Guaranteed Loan Agent or KEXIM shall require to remove any contradiction or conflict and to ensure that the KEXIM Guarantee remains in full force and effect. In addition, the Borrowers shall comply with any instructions given by KEXIM to the KEXIM Guaranteed Loan Agent in relation to the KEXIM Guarantee and the transactions contemplated in the KEXIM Guarantee provided that such instructions are in compliance with the KEXIM Guarantee.

29.8 Conflict

As between the Security Parties and the KEXIM Lenders, in case of any conflict between the Finance Documents and the KEXIM Guarantee, that KEXIM Guarantee shall prevail, and to the extent of such conflict or inconsistency, none of the KEXIM Guaranteed Lenders shall assert to KEXIM, the terms of the relevant Finance Documents.

29.9 Demand under KEXIM Guarantee

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Notwithstanding any other terms as set forth herein and the other Finance Documents, the KEXIM Guaranteed Loan Agent shall only make a written demand to KEXIM under the KEXIM Guarantee after the Agent has first made a written demand for payment of the relevant amount of the Secured Liabilities to the Guarantor pursuant to Clause 16.

30. VARIATIONS AND WAIVERS

30.1 Variations, waivers by Majority Lenders

Subject to Clause 30.2, a document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or any Creditor Party's rights or remedies under such a provision or the general law, only if the document is signed, or specifically agreed to by fax or Email, by the Borrowers, by the Agent on behalf and with the approval of the Majority Lenders, by the Agent and the Security Trustee in their own rights, and, if the document relates to a Finance Document to which a Security Party is party, by that Security Party.

30.2 Variations, waivers requiring agreement of all Lenders

Notwithstanding Clause 30.1, as regards (a) through (k) below, a document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or any Creditor Party's rights or remedies under such a provision or the general law, only if the document is signed, or specifically agreed to by fax or Email, by the Borrowers, by or on behalf and with the approval of every Lender, by the Agent and the Security Trustee in their own rights, and, if the document relates to a Finance Document to which a Security Party is party, by that Security Party:

(m) a reduction in the Margin;

(n) a change to Clause 2.3 or this Clause 30;

(o) a change to any provision of this Agreement or any other Finance Document relating either directly or indirectly to Sanctions Laws including any defined terms used therein;

(p) a postponement to the date for, or a reduction in the amount of, any payment of principal, interest, fees or other sum payable under this Agreement;

(q) an increase in or extension of any Lender's Commitment or an extension of the Maturity Date or an amendment of the definition of "Availability Period";

(r) a change to the definition of "Majority Lenders";

(s) any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document;

(t) any amendment or waiver if the Agent or a Lender which is a FATCA Non-Exempt Party reasonably believes that it may constitute a "material modification" within the meaning of FATCA that may result (directly or indirectly) in any party to any Finance Document being required to make a FATCA Deduction;

(u) any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Lender's consent is required;

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(v) any amendment of or waiver to any provision in any Finance Document providing for the pro rata nature of disbursements by or payments to Lenders; and

(w) a substitution or replacement of any Security Party.

30.3 Variations, waivers relating to the Servicing Banks

An amendment or waiver that relates to the rights or obligations of the Agent or the Security Trustee or the K-Sure Agent under Clause 33 may not be effected without the consent of the Agent or the Security Trustee or the K-Sure Agent, as applicable.

30.4 Exclusion of other or implied variations

Except for a document which satisfies the requirements of Clauses 30.1, 30.2 or 30.3, no document, and no act, course of conduct, failure or neglect to act, delay or acquiescence on the part of the Creditor Parties or any of them (or any person acting on behalf of any of them) shall result in the Creditor Parties or any of them (or any person acting on behalf of any of them) being taken to have varied, waived, suspended or limited, or being precluded (permanently or temporarily) from enforcing, relying on or exercising:

(s) a provision of this Agreement or another Finance Document; or

(t) an Event of Default; or

(u) a breach by a Borrower or another Security Party of an obligation under a Finance Document or the general law; or

(v) any right or remedy conferred by any Finance Document or by the general law,

and there shall not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time.

31. NOTICES

31.1 General

Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by letter, electronic mail (Email) (subject to Clause 31.7) or fax and references in the Finance Documents to written notices, notices in writing and notices signed by particular persons shall be construed accordingly.

31.2 Addresses for communications

A notice by letter, Email or fax shall be sent:

to any Borrower    Scorpio Bulkers Inc.

or the Guarantor:    9, Boulevard Charles III

Monaco, 98000

Attention:     General Counsel

Facsimile:    +377 97 77 8346

Email:     legal@scorpiogroup.net

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with a copy to:    150 East 58th Street

New York, New York 10155

Attention:    Chief Financial Officer

Facsimile:    +212-542-1618

Email:    hbaker@scorpiogroup.net

to a Lender: At the address below its name in Schedule 1 or (as the case may require) in the relevant Transfer Certificate.

to K-Sure:    K-Sure

Offshore Team, Marine Finance Department

21F, BIFC, #40 Moonhyunkeumyoong-ro

Namgu, Busan, 608-828

Korea

Attention : Han, Jae Ha

Facsimile : 82-(0)51-630-5455

Email : hjh0552@ksure.or.kr

to KEXIM:     38 Eunhaeng-ro Yeongdeungpo-gu

Seoul, Korea 150-996

Attention: Jin Young Lee

Facsimile: +822-051-922-8849

Email: jylee@koreaexim.go.kr

to the Agent:    DNB Bank ASA

DNB Bank ASA, New York Branch

200 Park Avenue

31st Floor

New York

NY 10166

Attention:    Ahelia Singh

Facsimile:    +1 212 681 3900

Email:    ahelia.singh@dnb.no

to the Security Trustee:    DNB Bank ASA,

DNB Bank ASA, New York Branch

200 Park Avenue

31st Floor

New York

NY 10166

Attention:    Ahelia Singh

Facsimile:    +1 212 681 3900

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Email:    ahelia.singh@dnb.no

to the K-Sure Agent:    DNB Bank ASA,

DNB Bank ASA, New York Branch

200 Park Avenue

31st Floor

New York

NY 10166

Attention:    Ahelia Singh

Facsimile:    +1 212 681 3900

Email:    ahelia.singh@dnb.no

to the KEXIM Guaranteed Loan Agent    :    DNB Bank ASA,

DNB Bank ASA, New York Branch

200 Park Avenue

31st Floor

New York

NY 10166

Attention:    Ahelia Singh

Facsimile:    +1 212 681 3900

Email:    ahelia.singh@dnb.no

or to such other address as the relevant party may notify the Agent or, if the relevant party is the Agent or the Security Trustee, the Borrowers, the Lenders and the Security Parties.

31.3 Effective date of notices

Subject to Clauses 31.4 and 31.5:

(w) a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered;

(x) a notice which is sent by Email shall be deemed to be served, and shall take effect, at the time when it is actually received in readable form; and

(y) a notice which is sent by fax shall be deemed to be served, and shall take effect, two (2) hours after its transmission is completed.

31.4 Service outside business hours

However, if under Clause 31.3 a notice would be deemed to be served:

(c) on a day which is not a business day in the place of receipt; or

(d) on such a business day, but after 5:00 p.m. local time,

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the notice shall (subject to Clause 31.5) be deemed to be served, and shall take effect, at 9:00 a.m. on the next day which is such a business day.

31.5 Illegible notices

Clauses 31.3 and 31.4 do not apply if the recipient of a notice notifies the sender within one (1) hour after the time at which the notice would otherwise be deemed to be served that the notice has been received in a form which is illegible in a material respect.

31.6 Valid notices

A notice under or in connection with a Finance Document shall not be invalid by reason that its contents or the manner of serving it do not comply with the requirements of this Agreement or, where appropriate, any other Finance Document under which it is served if:

(c) the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice; or

(d) in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should have been.

31.7 Electronic communication between the Agent and a Lender

Any communication to be made between the Agent and a Lender under or in connection with the Finance Documents may be made by Email or other electronic means, if the Agent and the relevant Lender:

(h) agree that, unless and until notified to the contrary, this is to be an accepted form of communication;

(i) notify each other in writing of their Email address and/or any other information required to enable the sending and receipt of information by that means; and

(j) notify each other of any change to their respective Email addresses or any other such information supplied to them.

Any electronic communication made between the Agent and a Lender will be effective only when actually received in readable form and, in the case of any electronic communication made by a Lender to the Agent, only if it is addressed in such a manner as the Agent shall specify for this purpose.

31.8 English language

Any notice under or in connection with a Finance Document shall be in English.

31.9 Meaning of notice

In this Clause 29, "notice" includes any demand, consent, authorization, approval, instruction, waiver or other communication.

32. SUPPLEMENTAL

32.1 Rights cumulative, non-exclusive

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The rights and remedies which the Finance Documents give to each Creditor Party are:

(j) cumulative;

(k) may be exercised as often as appears expedient; and

(l) shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.

32.2 Severability of provisions

If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions of that Finance Document or of the provisions of any other Finance Document.

32.3 Counterparts

A Finance Document may be executed in any number of counterparts.

32.4 Binding Effect

This Agreement shall become effective on the Effective Date and thereafter shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.

32.5 Mandated Lead Arrangers, Bookrunner and Co-Arrangers

None of the persons identified on the cover page or signature pages of this Agreement as a "mandated lead arranger", "bookrunner" or "co-arranger" shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than, in the case of such Creditor Parties, those applicable to all Creditor Parties as such. Without limiting the foregoing, none of the Creditor Parties so identified shall have or be deemed to have any fiduciary relationship with any Creditor Party. Each Creditor Party acknowledges that it has not relied, and will not rely, on any of the Creditor Parties so identified in deciding to enter into this Agreement or in taking or not taking action hereunder.

33. THE SERVICING BANKS

33.1 Appointment and Granting

(z) The Agent

Each of the Lenders appoints and authorizes (with a right of revocation) the Agent to act as its agent hereunder and under any of the other Finance Documents with such powers as are specifically delegated to the Agent by the terms of this Agreement and of any of the other Finance Documents, together with such other powers as are reasonably incidental thereto.

(aa) The Security Trustee.

(i) Authorization of Security Trustee. Each of the Lenders and the Agent appoints and authorizes (with a right of revocation) the Security Trustee to act as security trustee hereunder and under the other Finance Documents with such powers as are specifically delegated to the Security Trustee by the terms of this Agreement and such other Finance Documents, together with such other powers as are reasonably incidental thereto.

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(ii) Granting Clause. To secure the payment of all sums of money from time to time owing to the Lenders under the Finance Documents and the performance of the covenants of the Borrowers and any other Security Party herein and therein contained, and in consideration of the premises and of the covenants herein contained and of the extensions of credit by the Lenders, the Security Trustee does hereby declare that it will hold as such trustee in trust for the benefit of the Lenders and the Agent from and after the execution and delivery thereof, all of its right, title and interest as mortgagee in, to and under the Mortgages and its right, title and interest as assignee and secured party under the other Finance Documents (the right, title and interest of the Security Trustee in and to the property, rights and privileges described above, from and after the execution and delivery thereof, and all property hereafter specifically subjected to the Security Interest of the indenture created hereby and by the Finance Documents by any amendment hereto or thereto are herein collectively called the Estate); TO HAVE AND TO HOLD the Estate unto the Security Trustee and its successors and assigns forever, BUT IN TRUST, NEVERTHELESS, for the equal and proportionate benefit and security of the Lenders and the Agent and their respective successors and assigns without any priority of any one over any other, UPON THE CONDITION that, unless and until an Event of Default under this Agreement shall have occurred and be continuing, the relevant Security Party shall be permitted, to the exclusion of the Security Trustee, to possess and use the Ships. IT IS HEREBY COVENANTED, DECLARED AND AGREED that all property subject or to become subject hereto is to be held, subject to the further covenants, conditions, uses and trusts hereinafter set forth, and each Security Party, for itself and its respective successors and assigns, hereby covenants and agrees to and with the Security Trustee and its successors in said trust, for the equal and proportionate benefit and security of the Lenders and the Agent as hereinafter set forth.

(iii) Acceptance of Trusts. The Security Trustee hereby accepts the trusts imposed upon it as Security Trustee by this Agreement, and the Security Trustee covenants and agrees to perform the same as herein expressed and agrees to receive and disburse all monies constituting part of the Estate in accordance with the terms hereof.

(bb) The K-Sure Agent

Each K-Sure Lender appoints and authorizes the K-Sure Agent to act as its agent under and in connection with the Loan Agreement, and the other Finance Documents in relation to each K‑Sure Insurance Policy and all K-Sure Matters, with power to take such actions as:

(i) are specified under any Finance Document as being for the K-Sure Agent to take on behalf of the K-Sure Lenders insured under the K-Sure Insurance Policy;

(ii) are specifically delegated to the K-Sure Agent by the terms of the K-Sure Insurance Policy; or

(iii) are reasonably incidental thereto,

and if expressly authorized in writing by each K-Sure Lender, the K-Sure Agent may execute and deliver on its behalf the K-Sure Insurance Policy and all documents that are necessary or desirable in connection with the K-Sure Insurance Policy, and where the K-Sure Agent has acted in accordance with the express written instructions of the K-Sure Lenders, each K-Sure Lender agrees severally to be bound by the terms and conditions of the K-Sure Insurance Policy as if it had executed and delivered such agreement for and in its own name.

Without limiting the foregoing:

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(A) each K-Sure Lender authorizes the K-Sure Agent to exercise those rights, powers and discretions which are expressly given to the K-Sure Agent by this Agreement and the other Finance Documents, together with any other reasonably incidental rights, powers and discretions; and

(B) each K-Sure Lender appoints the K-Sure Agent solely for the purpose of:

I. providing, revealing and disclosing, such information and details relating to any Security Party, the Finance Documents and the facilities granted pursuant thereto, to K-Sure as K-Sure may require from time to time for the purpose of issuing and administering the K-Sure Insurance Policy; and

II. making a claim on behalf of the K-Sure Lenders under the K-Sure Insurance Policy and directing payment of the insurance proceeds under the K-Sure Insurance Policy which shall be held by the Security Trustee in trust for the K‑Sure Lenders and for application in accordance with Clause 18 of this Agreement.

33.2 Scope of Duties

None of the Agent, the K-Sure Agent or the Security Trustee (which terms as used in this sentence and in Clause 33.5 hereof shall include reference to their respective affiliates and their own respective and their respective affiliates' officers, directors, employees, agents and attorneys-in-fact):

(e) shall have any duties or responsibilities except those expressly set forth in this Agreement and in any of the Finance Documents, and shall not by reason of this Agreement or any of the Finance Documents be (except, with respect to the Security Trustee, as specifically stated to the contrary in this Agreement) a trustee for a Lender;

(f) shall be responsible to the Lenders for any recitals, statements, representations or warranties contained in this Agreement or in any of the Finance Documents, or in any certificate or other document referred to or provided for in, or received by any of them under, this Agreement or any of the other Finance Documents, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any of the other Finance Documents or any other document referred to or provided for herein or therein or for any failure by a Security Party or any other person to perform any of its obligations hereunder or thereunder or for the location, condition or value of any property covered by any Security Interest under any of the Finance Documents or for the creation, perfection or priority of any such Security Interest;

(g) shall be required to initiate or conduct any litigation or collection proceedings hereunder or under any of the Finance Documents unless expressly instructed to do so in writing by the Majority Lenders; or

(h) shall be responsible for any action taken or omitted to be taken by it hereunder or under any of the Finance Documents or under any other document or instrument referred to or provided for herein or therein or in connection herewith or therewith, except for its own gross negligence or willful misconduct. Each of the Security Trustee, K-Sure Agent and the Agent may employ agents and attorneys-in-fact and none of the Security Trustee, K-Sure Agent or the Agent shall be responsible for the negligence or misconduct of any such agents or attorneys-in-fact selected by it in good faith. Each of the Security Trustee, K-Sure Agent and the Agent may deem and treat the payee of a Loan Note as the holder thereof (unless such Loan Note is held by the Agent) for all purposes hereof unless and until a written notice of the assignment or transfer thereof shall have been filed with the Agent, together with the written consent of the Borrowers

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(other than in the case of a transfer to an Affiliate of the Transferor Lender) to such assignment or transfer.

33.3 Reliance

Each of the Security Trustee, K-Sure Agent and the Agent shall be entitled to rely upon any certification, notice or other communication (including any thereof by telephone, telex, facsimile, telegram or cable) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper person or persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by the Security Trustee or the Agent, as the case may be. As to any matters not expressly provided for by this Agreement or any of the other Finance Documents, each of the Security Trustee, K-Sure Agent and the Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder or thereunder in accordance with instructions signed by the Majority Lenders, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders.

33.4 Knowledge

None of the Security Trustee, K-Sure Agent or the Agent shall be deemed to have knowledge or notice of the occurrence of a Potential Event of Default or Event of Default (other than, in the case of the Agent, actual knowledge of the non payment of principal of or interest on the Loan) unless each of the Security Trustee, K-Sure Agent and the Agent has received notice from a Lender or the Borrowers specifying such Potential Event of Default or Event of Default and stating that such notice is a "Notice of Default". If the Agent receives such a notice of the occurrence of such Potential Event of Default or Event of Default, the Agent shall give prompt notice thereof to the Security Trustee and the Lenders (and shall give each Lender prompt notice of each such non payment). Subject to Clause 31.8 hereof, the Security Trustee and the Agent shall take such action with respect to such Potential Event of Default or Event of Default or other event as shall be directed by the Majority Lenders, except that, unless and until the Security Trustee and the Agent shall have received such directions, each of the Security Trustee and the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Potential Event of Default or Event of Default or other event as it shall deem advisable in the best interest of the Lenders.

33.5 Security Trustee and Agent as Lenders

Each of the Security Trustee, K-Sure Agent and the Agent (and any successor acting as Security Trustee, K-Sure Agent or Agent, as the case may be) in its individual capacity as a Lender hereunder shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not acting as the Security Trustee, K-Sure Agent or the Agent, as the case may be, and the term "Lender" or "Lenders" shall, unless the context otherwise indicates, include each of the Security Trustee and the Agent in their respective individual capacities. Each of the Security Trustee, K-Sure Agent and the Agent (and any successor acting as Security Trustee, K-Sure Agent and Agent, as the case may be) and their respective affiliates may (without having to account therefor to a Lender) accept deposits from, lend money to and generally engage in any kind of banking, trust or other business with the Guarantor and any of its subsidiaries or affiliates as if it were not acting as the Security Trustee, K-Sure Agent or the Agent, as the case may be, and each of the Security Trustee, K‑Sure Agent and the Agent and their respective affiliates may accept fees and other consideration from the Guarantor for services in connection with this Agreement or otherwise without having to account for the same to the Lenders.

33.6 Indemnification of Security Trustee, K-Sure Agent and Agent

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The Lenders severally agree, ratably in accordance with their Proportionate Shares, to indemnify each of the Agent, K-Sure Agent and the Security Trustee (to the extent not reimbursed under other provisions of this Agreement, but without limiting the obligations of the Borrowers under said other provisions) for any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Security Trustee, K-Sure Agent or the Agent in any way relating to or arising out of this Agreement or any of the other Finance Documents or any other documents contemplated by or referred to herein or therein or the transactions contemplated hereby (including, without limitation, the costs and expenses which the Borrowers are to pay hereunder, but excluding normal administrative costs and expenses incidental to the performance of their respective agency duties hereunder) or the enforcement of any of the terms hereof or thereof or of any such other documents, except that no Lender shall be liable for any of the foregoing to the extent they arise from the gross negligence or willful misconduct of the party to be indemnified.

33.7 Reliance on Security Trustee or Agent

Each Lender agrees that it has, independently and without reliance on the Security Trustee, the Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own credit analysis of the Borrowers and decision to enter into this Agreement and that it will, independently and without reliance upon the Security Trustee, the Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement or any of the Finance Documents. None of the Security Trustee or the Agent shall be required to keep itself informed as to the performance or observance by the Borrowers or the Guarantor of this Agreement or any of the Finance Documents or any other document referred to or provided for herein or therein or to inspect the properties or books of any Borrower or the Guarantor. Except for notices, reports and other documents and information expressly required to be furnished to the Lenders by the Security Trustee, K-Sure Agent or the Agent hereunder, none of the Security Trustee, K-Sure Agent or the Agent shall have any duty or responsibility to provide a Lender with any credit or other information concerning the affairs, financial condition or business of any Borrower, the Guarantor or any subsidiaries or affiliates thereof which may come into the possession of the Security Trustee, K-Sure Agent the Agent or any of their respective affiliates.

33.8 Actions by Security Trustee

K-Sure Agentand Agent. Except for action expressly required of the Security Trustee, K-Sure Agent or the Agent hereunder and under the other Finance Documents, each of the Security Trustee, K-Sure Agent and the Agent shall in all cases be fully justified in failing or refusing to act hereunder and thereunder unless it shall receive further assurances to its satisfaction from the Lenders of their indemnification obligations under Clause 33.6 against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.

33.9 Resignation and Removal

Subject to the appointment and acceptance of a successor Security Trustee, K-Sure Agent or Agent (as the case may be) as provided below, each of the Security Trustee, K-Sure Agent and the Agent may resign at any time by giving notice thereof to the Lenders and the Borrowers, and the Security Trustee, K-Sure Agent or the Agent may be removed at any time with or without cause by the Majority Lenders by giving notice thereof to the Agent, K-Sure Agent, the Security Trustee, the Lenders and the Borrowers. Upon any such resignation or removal, the Majority Lenders shall have the right to appoint a successor Security Trustee, K-Sure Agent or Agent, as the case may be. If no successor Security Trustee, K-Sure

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Agent or Agent, as the case may be, shall have been so appointed by the Lenders or, if appointed, shall not have accepted such appointment within 30 days after the retiring Security Trustee's, K-Sure Agent or Agent's, as the case may be, giving of notice of resignation or the Majority Lenders' removal of the retiring Security Trustee or Agent, as the case may be, then the retiring Security Trustee, K-Sure Agent or Agent, as the case may be, may, on behalf of the Lenders, appoint a successor Security Trustee, K-Sure Agent or Agent. Upon the acceptance of any appointment as Security Trustee, K-Sure Agent or Agent hereunder by a successor Security Trustee, K-Sure Agent or Agent, such successor Security Trustee, K-Sure Agent or Agent, as the case may be, shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Security Trustee, K-Sure Agent or Agent, as the case may be, and the retiring Security Trustee or Agent shall be discharged from its duties and obligations hereunder. After any retiring Security Trustee or Agent's resignation or removal hereunder as Security Trustee, K-Sure Agent or Agent, as the case may be, the provisions of this Clause 33 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Security Trustee, K-Sure Agent or the Agent, as the case may be.

33.10 Release of Collateral

Without the prior written consent of all Lenders none of the Security Trustee, K-Sure Agent or the Agent will release any Collateral or otherwise terminate any Security Interest under this Agreement, except that no such consent is required, and each of the Security Trustee, K-Sure Agent and the Agent is authorized, to release any Security Interest covering property if the Secured Liabilities have been irrevocably and unconditionally paid and performed in full or which is the subject of a disposition of property permitted hereunder or to which the Lenders have consented.

34. LAW AND JURISDICTION

34.1 Governing law

THIS AGREEMENT AND THE OTHER FINANCE DOCUMENTS (EXCEPT AS OTHERWISE PROVIDED IN A FINANCE DOCUMENT) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS CONFLICT OF LAW PRINCIPLES.

34.2 Consent to Jurisdiction

(h) Each of the Borrowers and the Guarantor hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York County, and any appellate court thereof, in any action or proceeding arising out of or relating to this Agreement or any of the other Finance Documents to which such Security Party is a party or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State Court or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

(i) Nothing in this Clause 32.2 shall affect the right of a Creditor Party to bring any action or proceeding against a Security Party or its property in the courts of any other jurisdictions where such action or proceeding may be heard.

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(j) Each of the Borrowers and the Guarantor hereby irrevocably and unconditionally waives to the fullest extent it may legally and effectively do so:

(i) any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Finance Document to which it is a party in any New York State or Federal court and the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court; and

(ii) any immunity from suit, the jurisdiction of any court in which judicial proceedings may at any time be commenced with respect to this Agreement or any other Finance Document or from any legal process with respect to itself or its property (including without limitation attachment prior to judgment, attachment in aid of execution of judgment, set-off, execution of a judgment or any other legal process), and to the extent that in any such jurisdiction there may be attributed to such person such an immunity (whether or not claimed), such person hereby irrevocably agrees not to claim such immunity.

(k) Each of the Borrowers and the Guarantor hereby agrees to appoint Seward & Kissel LLP, with offices currently located at One Battery Park Plaza, New York, New York 10004, Attention: Michael Timpone, as its designated agent for service of process for any action or proceeding arising out of or relating to this Agreement or any other Finance Document. Each of the Borrowers and the Guarantor also irrevocably consents to the service of any and all process in any such action or proceeding by the mailing of copies of such process to its address specified in Clause 31.2. Each of the Borrowers and the Guarantor also agrees that service of process may be made on it by any other method of service provided for under the applicable laws in effect in the State of New York.

34.3 Creditor Party rights unaffected

Nothing in this Clause 34 shall exclude or limit any right which any Creditor Party may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

34.4 Waiver of punitive damages

Each of the Borrowers and the Guarantor waives, to the maximum extent not prohibited by law, any right it may have to claim or recover any special, exemplary, punitive or consequential damages in any action or proceeding arising out of or relating to this Agreement or any of the other Finance Documents to which such Security Party is a party.

34.5 Meaning of proceedings

In this Clause 34, proceedings means proceedings of any kind, including an application for a provisional or protective measure.

35. WAIVER OF JURY TRIAL

35.1 WAIVER

EACH OF THE BORROWERS, THE GUARANTOR AND THE CREDITOR PARTIES MUTUALLY AND IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

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36. PATRIOT ACT NOTICE

36.1 PATRIOT Act Notice

Each of the Agent and the Lenders hereby notifies the Borrowers and the Guarantor that pursuant to the requirements of the PATRIOT Act and the policies and practices of the Agent and each Lender, the Agent and each of the Lenders is required to obtain, verify and record certain information and documentation that identifies each Security Party, which information includes the name and address of each Security Party and such other information that will allow the Agent and each of the Lenders to identify each Security Party in accordance with the PATRIOT Act. Each Security Party agrees that it will provide the Agent and each of the Lenders with such information as they may request in order for the Agent and each of the Lenders to satisfy the requirements of the Patriot Act.

WHEREFORE, the parties hereto have caused this Loan Agreement to be executed as of the date first above written.

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Schedule 1

[       ]

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PART 1

KEXIM LENDERS AND KEXIM LOAN COMMITMENTS

Lender	Lending Office	Commitment
KEXIM Direct Loan
The Export-Import Bank of Korea	38 Eunhaeng-ro, Yeongdeungpo-gu, Seoul 150-996, Korea	$85,000,000
KEXIM Guaranteed Loan
Korea Exchange Bank, Hong Kong Branch	32/F., Far East Finance Centre, 16 Harcourt Road, Admiralty, Hong Kong, Hong Kong	$30,000,000
Woori Global Markets Asia Limited	Rooms 1905-1908, 19th Floor, Gloucester Tower, The Landmark, 15 Queen’s Road, Central, Hong Kong	$30,000,000
Shinhan Asia Limited	Units 7704, 77/F., International Commerce Centre, No. 1 Austin Road West, Kowloon, Hong Kong	$12,000,000
KEXIM Asia Limited	Unit 1805&07, 18/F, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong	$3,000,000
Subtotal:		$75,000,000

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PART 2

K-SURE LENDERS AND K-SURE LOAN COMMITMENTS

Lender	Lending Office	Commitment
K-Sure 95% Policy Loan
PIMCO Funds: Private Account Portfolio Series Long Duration Corporate Bond Portfolio	c/o Pacific Investment Management Co., 840 Newport Center Dr., Newport Beach, CA 92660	$11,300,000
PIMCO Funds: PIMCO Investment Grade Corporate Bond Fund	c/o Pacific Investment Management Co., 840 Newport Center Dr., Newport Beach, CA 92660	$3,300,000
PIMCO Funds: PIMCO Long-Term Credit Fund	c/o Pacific Investment Management Co., 840 Newport Center Dr., Newport Beach, CA 92660	$2,400,000
PIMCO Funds: PIMCO Total Return Fund	c/o Pacific Investment Management Co., 840 Newport Center Dr., Newport Beach, CA 92660	$33,000,000
Bank of America, National Association	555 California Street, CA5-705-04-01, San Francisco, CA 94104 USA	$20,000,000
Mega International Commercial Bank Co., Ltd., Offshore Banking Branch	10th Floor No. 100 Chi Lin Road, 104 Taipei, Taiwan, R.O.C.	$10,000,000
K-Sure 100% Policy Loan
KEB LA Financial Corp.	777 S. Figueroa St. Suite 3000, Los Angeles, CA 90017	$20,000,000
Kookmin Bank	84, Namdaemun-Ro, Jung-Gu, Seoul, Republic of Korea, (100-845)	$20,000,000
NongHyup Bank	120, Tongil-Ro, Jung-Gu, Seoul, Korea, 100-707	$20,000,000
Woori Bank	51 Sogong-ro, Jung-gu, Seoul, Republic of Korea, 100-792	$20,000,000

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PART 3

COMMERCIAL LENDERS AND COMMERCIAL LOAN COMMITMENT

Lender	Lending Office	Maximum Commitment
Woori Bank acting through Woori Bank Gongduk-Dong Financial Center	119 Mapodae-ro, Mapo-gu Seoul, Republic of Korea, 121-720	$75,000,000
DNB Capital LLC	200 Park Avenue, 31st Floor, New York, NY 10166	$16,264,000

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SCHEDULE 2

DRAWDOWN NOTICE

To:    DNB Bank ASA, New York Branch as Agent

[           ]

[Date]

DRAWDOWN NOTICE

We refer to the loan agreement dated as of January 15, 2015 (the LoanAgreement) among ourselves, as a Borrower, the Guarantor referred to therein, the Lenders referred to therein, the Mandated Lead Arrangers referred to therein, the Bookrunner referred to therein and yourselves as Agent and as Security Trustee in connection with loan facilities of up to $411,264,000 in aggregate. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.

We request to borrow Advances under the Commercial Loan Facility, the KEXIM Loan Facility and the K-Sure Loan Facility as follows:

(a) Aggregate Amount:    US$[l];

(b) Drawdown Date:    [l];

(c) Delivery Date:    [l]; and

(d) Payment instructions:

[l]

We represent and warrant that:

(i) no Event of Default or Potential Event of Default has occurred or would result from the borrowing of the Advance;

(ii) the representations and warranties in Clause 10 and those of the Borrowers or any other Security Party which are set out in the other Finance Documents are true and not misleading as of the date of this Drawdown Notice and will be true and not misleading as of the Drawdown Date, in each case with reference to the circumstances then existing;

(iii) there has been no Material Adverse Effect since June 30, 2014;

(iv) neither the Borrowers nor any of its subsidiaries or Affiliates has launched any other facilities or debt transactions into the international capital markets either publicly or privately which might prejudice either the successful and timely syndication or performance of the loan facility contemplated by this Agreement; and

(v) if the Collateral Maintenance Ratio were applied immediately following the making of the Advance, the Borrowers would not be required to provide additional Collateral or prepay part of the Loan under Clause 15.

This notice cannot be revoked or varied without the prior consent of the Majority Lenders.

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[We authorize you to deduct the outstanding fees and expenses referred to in Clause 21 from the amount of the Advance.]

Name

Title

for and on behalf of

[NAME OF EACH BORROWER]

Agreed and Acknowledged by

Name

Title

for and on behalf of

[SCORPIO BULKERS INC.]

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SCHEDULE 3

CONDITION PRECEDENT DOCUMENTS

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PART 1

CONDITIONS PRECEDENT TO SERVICE OF A DRAWDOWN NOTICE

The following are the documents referred to in Clause 9.1(a)(i):

(a) A duly executed original of this Agreement.

(b) A copy of each Approved Acquisition Contract (and all addenda and supplements thereto), in form and substance acceptable to the Agent and certified as of a date reasonably near the date of the Drawdown Notice by an officer of the Guarantor or Borrower party thereto as being a true and correct copy thereof.

(c) If applicable, a copy of each Charter (and all addenda and supplements thereto), in form and substance acceptable to the Agent and certified as of a date reasonably near the date of the Drawdown Notice by an officer of the Guarantor or Borrower party thereto as being a true and correct copy thereof.

(d) Copies of certificates dated as of a date reasonably near the date of the Drawdown Notice, certifying that each of the Security Parties is duly incorporated or formed and in good standing under the laws of its jurisdiction of incorporation or formation.

(e) Copies of the constitutional documents and each amendment thereto of each of the Security Parties, certified as of a date reasonably near the date of the Drawdown Notice by an officer of such party as being a true and correct copy thereof.

(f) Copies of the resolutions of the directors (or equivalent governing body) and, where applicable, the shareholders (or equivalent equity holders), of each of the Security Parties authorizing the execution of each of the Finance Documents to which that Security Party is a party and, in the case of the Borrowers, authorizing an officer or an attorney-in-fact of such Borrower to give the Drawdown Notice and other notices required under the Finance Documents, in each case certified as of a date reasonably near the date of the Drawdown Notice by an officer of such party as being a true and correct copy thereof,

(g) An incumbency certificate in respect of the officers and directors (or equivalent) of each of the Security Parties (including, without limitation, solvency certification) and signature samples of any signatories to any Finance Document.

(h) The original or a certified copy (by an officer of the relevant Security Party) of any power of attorney under which any Finance Document is executed on behalf of a Security Party.

(i) Copies of all consents which a Security Party requires to enter into, or make any payment under, any Finance Document, each certified as of a date reasonably near the date of the Drawdown Notice by an officer of such party as being a true and correct copy thereof, or certification by such officer that no such consents are required.

(j) Certification by the Guarantor that:

(i) no judgment, order, injunction or other restraint exists prohibiting or imposing materially adverse conditions upon the transactions contemplated by this Agreement or any of the other Finance Documents;

(ii) no litigation by any entity (private or governmental) is pending or threatened with respect to this Agreement or any document to be executed in connection therewith; and

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(iii) after giving effect to the transactions contemplated by this Agreement, there shall be no conflict with, or default under, any material agreement of the Guarantor or any of its subsidiaries.

(k) Documentary evidence that the agent for service of process named in Clause 34 of this Agreement has accepted its appointment.

(l) Documentary evidence from the Account Bank that the relevant Earnings Account(s) have been opened or are in operation.

(m) If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.

(n) Favorable legal opinions from lawyers appointed by the Guarantor or the Agent on such matters concerning the laws of such relevant jurisdictions as the Agent, K-Sure Agent or KEXIM Guaranteed Loan Agent may require.

(o) A copy of the duly executed K-Sure Insurance Policy against political and commercial risks in respect of 95 per cent (95%) of the K-Sure 95% Policy Loan and accrued interest thereunder to which the K-Sure Insurance Policy corresponds.

(p) A copy of the duly executed K-Sure Insurance Policy against political and commercial risks in respect of 100 per cent (100%) of the K-Sure 100% Policy Loan and accrued interest thereunder to which the K-Sure Insurance Policy corresponds.

(q) A copy of the duly executed KEXIM Guarantee in respect of the KEXIM Guaranteed Loan.

(r) Evidence satisfactory to the Agent that the full amount of the KEXIM Guarantee Premium payable to KEXIM has been paid.

(s) Evidence satisfactory to the Agent that the full amount of the K-Sure Premium has been paid or will on the first Drawdown Date be paid.

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PART 2

CONDITIONS PRECEDENT TO DELIVERY

The following are the documents referred to in Clause 9.1(b):

(a) A duly executed original of each Finance Document (and of each document required to be delivered by each Finance Document) other than those referred to in Part A(1).

(b) If the Drawdown Date is more than 5 Business Days after the date of the Drawdown Notice, a bringdown certificate of each of the Security Parties certifying as of the Drawdown Date as to the absence of any amendments to the documents of such party referred to in paragraphs (e), (f) and (g) of Part 1 since the date of the Drawdown Notice.

(c) Certification by the Guarantor as of the date of the Drawdown Date for the Advance as to the matters described in Clauses 9.1(d) (other than 9.1(d)(iii)) and 9.1(e).

(d) Documentary evidence that:

(vi) the relevant Ship has been unconditionally delivered by the Seller to, and accepted by, the Relevant Borrower under the relevant Approved Acquisition Contract, and the full purchase price payable for such Ship (in addition to the part to be financed by the Advance) has been duly paid;

(vii) the relevant Ship is definitively and permanently registered in the name of the Relevant Borrower under an Approved Flag;

(viii) the Mortgage has been duly registered (preliminarily or permanently) or recorded against the relevant Ship as a valid first priority or preferred ship mortgage in accordance with the laws of the Approved Flag on which such Ship is registered;

(ix) the Security Interests intended to be created by each of the Finance Documents have been duly perfected under applicable law;

(x) the relevant Ship is in the absolute and unencumbered ownership of the Relevant Borrower save as contemplated by the Finance Documents;

(xi) the relevant Ship is insured in accordance with the provisions of Clause 13 of this Agreement and all requirements therein in respect of insurances have been complied with (and the Security Trustee has obtained mortgagee's interest marine insurance, mortgagee's interest additional perils insurance and mortgagee's political risk/rights insurance pursuant to Clause 13.16); and

(xii) the relevant Ship maintains the highest class for vessels of its type with the Classification Society free of any overdue recommendations and conditions affecting class (which status shall be established by an Interim Confirmation of Class Certificate or a Confirmation of Class certificate (as the case may be) issued by the Classification Society and dated a date reasonably near the Drawdown Date).

(e) Valuations of the Fair Market Value of the relevant Ship, paid for by the Borrowers but addressed to the Agent and the Lenders, stated to be for the purposes of this Agreement and dated not more than 30 days before the Drawdown Date, which evidence an average Fair Market Value for such Ship of not less than 145% of the Advance in respect of such Ship.

0103218-0000004 NY:20884372.11 141

(f) Copies of the documents signed or issued by the Relevant Borrower and the Seller under or in connection with the delivery of the relevant Ship under the terms of the relevant Approved Acquisition Contract, namely the bill of sale, the protocol of delivery and acceptance, the Approved Builder's certificate (to the extent applicable), the commercial invoices and the resolutions of the directors (and of the shareholders in the case of the Relevant Borrower) and power of attorney of the Relevant Borrower in relation to the due authorization and execution by the Relevant Borrower of (i) the Approved Acquisition Contract and (ii) the documents described in this paragraph, certified as of the Drawdown Date by an officer of such Borrower as being a true and correct copy thereof.

(g) If a Ship is subject to a Charter, such documentary evidence as the Agent may require that the relevant Ship has been delivered to the relevant charterer and the relevant charterer has accepted such Ship pursuant to the terms of the Charter applicable to that Ship, such documentary evidence to be provided 15 days prior to the relevant drawdown.

(h) Documentary evidence that the Relevant Borrower has instructed the Classification Society as required by Clause 14.4.

(i) The following documents establishing that the relevant Ship will, as from the Drawdown Date, be managed by an Approved Manager on terms acceptable to the Agent:

(i) a copy of each Approved Management Agreement, certified as of the Drawdown Date by an officer of the relevant Security Party as being a true and correct copy thereof;

(ii) a Manager's Undertaking executed by each Approved Manager in favor of the Agent; and

(iii) copies of each Approved Manager's Document of Compliance and of the relevant Ship's ISSC and Safety Management Certificate (together with any other details of the applicable safety management system which the Agent requires), certified as of the Drawdown Date by an officer of the relevant Approved Manager as being a true and correct copy thereof.

(j) A favorable opinion from BankAssure Insurance Services Inc. or any other independent insurance consultant acceptable to the Agent on such matters relating to the insurances for the Ship as the Agent may require.

(k) A favorable opinion of Seward & Kissel LLP, New York and Marshall Islands counsel for the Borrowers, in form, scope and substance satisfactory to the Creditor Parties.

(l) Favorable legal opinions from such other lawyers (if any) appointed by the Borrowers or the Agent on such matters concerning the laws of such relevant jurisdictions as the Agent may require.

0103218-0000004 NY:20884372.11 142

SCHEDULE 4

TRANSFER CERTIFICATE

The Transferor and the Transferee accept exclusive responsibility for ensuring that this Certificate and the transaction to which it relates comply with all legal and regulatory requirements applicable to them respectively.

To: [Name of Agent] for itself and for and on behalf of the Borrowers, [each other Security Party], the Security Trustee and each Lender, as defined in the Loan Agreement referred to below.

[Date]

This Certificate relates to a Loan Agreement dated as of January 15, 2015 (as amended or supplemented, the Loan Agreement) among (1) Scorpio Bulkers Inc. (the Guarantor), (2) the other companies listed in Schedule 8 thereto, as joint and several borrowers (the Borrowers), (3) the banks and financial institutions listed Schedule 1, thereto, as lenders (the Lenders) (4) DNB Markets, Inc. as Mandated Lead Arranger, (7) DNB Markets, Inc. as Bookrunner, (8) DNB Bank ASA, New York Branch as Agent, and (8) DNB Bank ASA, New York Branch as Security Trustee for loan facilities of up to $411,264,000 in aggregate.

1. In this Certificate, terms defined in the Loan Agreement shall, unless the contrary intention appears, have the same meanings when used in this Certificate and:

0103218-0000004 NY:20884372.11 143

Relevant Parties means the Agent, the Borrowers, each other Security Party, the Security Trustee and each Lender;

0103218-0000004 NY:20884372.11 144

Transferor means [full name] of [lending office];

0103218-0000004 NY:20884372.11 145

Transferee means [full name] of [lending office].

2. The effective date of this Certificate is [l], provided that this Certificate shall not come into effect unless it is signed by the Agent on or before that date.

3. [The Transferor assigns to the Transferee absolutely all rights and interests (present, future or contingent) which the Transferor has as Lender under or by virtue of the Agreement and every other Finance Document in relation to [l]% of its Contribution, which percentage represents $[l].

4. [By virtue of this Certificate and Clause 27 of the Agreement, the Transferor is discharged [entirely from its Commitment which amounts to $[l]] [from [l]% of its Commitment, which percentage represents $[l]] and the Transferee acquires a Commitment of $[l].]

5. The Transferee undertakes with the Transferor and each of the Relevant Parties that the Transferee will observe and perform all the obligations under the Finance Documents which Clause 27 of the Agreement provides will become binding on it upon this Certificate taking effect.

6. The Agent, at the request of the Transferee (which request is hereby made) accepts, for the Agent itself and for and on behalf of every other Relevant Party, this Certificate as a Transfer Certificate taking effect in accordance with Clause 27 of the Agreement.

7. The Transferor:

(a) warrants to the Transferee and each Relevant Party that:

(i) the Transferor has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which are required in connection with this transaction; and

(ii) this Certificate is valid and binding as regards the Transferor;

(b) warrants to the Transferee that the Transferor is absolutely entitled, free of encumbrances, to all the rights and interests covered by the assignment in paragraph 4; and

(c) undertakes with the Transferee that the Transferor will, at its own expense, execute any documents which the Transferee reasonably requests for perfecting in any relevant jurisdiction the Transferee's title under this Certificate or for a similar purpose.

8. The Transferee:

(a) confirms that it has received a copy of the Agreement and each of the other Finance Documents;

(b) agrees that it will have no rights of recourse on any ground against the Transferor, the Agent, the Security Trustee or any Lender in the event that:

(i) any of the Finance Documents prove to be invalid or ineffective;

(ii) a Borrower or any other Security Party fails to observe or perform its obligations, or to discharge its liabilities, under any of the Finance Documents;

(iii) it proves impossible to realize any asset covered by a Security Interest created by a Finance Document, or the proceeds of such assets are insufficient to discharge the

0103218-0000004 NY:20884372.11 146

liabilities of the Borrowers or any other Security Party under any of the Finance Documents;

(c) agrees that it will have no rights of recourse on any ground against the Agent, the Security Trustee or any Lender in the event that this Certificate proves to be invalid or ineffective;

(d) warrants to the Transferor and each Relevant Party that:

(iv) it has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which it needs to take or obtain in connection with this transaction; and

(v) that this Certificate is valid and binding as regards the Transferee; and

(e) confirms the accuracy of the administrative details set out below regarding the Transferee.

9. The Transferor and the Transferee each undertake with the Agent and the Security Trustee severally, on demand, fully to indemnify the Agent and/or the Security Trustee in respect of any claim, proceeding, liability or expense (including all legal expenses) which they or either of them may incur in connection with this Certificate or any matter arising out of it, except such as are shown to have been mainly and directly caused by the gross negligence or willful misconduct of the Agent's or the Security Trustee's own officers or employees.

10. The Transferee shall repay to the Transferor on demand so much of any sum paid by the Transferor under paragraph 9 as exceeds one-half of the amount demanded by the Agent or the Security Trustee in respect of a claim, proceeding, liability or expense which was not reasonably foreseeable at the date of this Certificate; but nothing in this paragraph shall affect the liability of each of the Transferor and the Transferee to the Agent or the Security Trustee for the full amount demanded by it.

[Name of Transferor]	[Name of Transferee]
By:	By:
Name:	Name:
Title:	Title:
Date:	Date:

AGENT

Signed for itself and for and on behalf of itself
as Agent and for every other Relevant Party

DNB BANK ASA, NEW YORK BRANCH

By:     

Name:

Title:

0103218-0000004 NY:20884372.11 147

Date:

0103218-0000004 NY:20884372.11 148

Administrative Details of Transferee

Name of Transferee:

Lending Office:

Contact Person
(Loan Administration Department):

Telephone:

Fax:

Contact Person
(Credit Administration Department):

Telephone:

Fax:

Account for payments:

Note: This Transfer Certificate alone may not be sufficient to transfer a proportionate share of the Transferor's interest in the security constituted by the Finance Documents in the Transferor's or Transferee's jurisdiction. It is the responsibility of each Lender to ascertain whether any other documents are required for this purpose.

0103218-0000004 NY:20884372.11 149

SCHEDULE 5

LIST OF APPROVED BROKERS

Broker
1.	Clarkson PLC
2.	Astrup Fearnleys AS
3.	R.S. Platou ASA
4.	Arrow Sale & Purchase Limited
5.	Braemar Seascope Limited
6.	Galbraith’s Ltd.
7.	Howe Robinson
8.	Maersk Broker
9.	Barry Rogliano Salles (BRS)

0103218-0000004 NY:20884372.11 150

SCHEDULE 6

LIST OF SHIPS

#	Vessel Name	Vessel Type	Yard	Estimated Delivery Date1	Est. Vessel Contract Cost	Est. Debt at 60% Advance	Relevant Borrower
1	SBI Camacho	Capesize	Sungdong	30 April 2015	$60.40	$36.24	SBI Camacho Shipping Company Limited
2	SBI Montesino	Capesize	Sungdong	31 May 2015	$56.04	$33.62	SBI Montesino Shipping Company Limited
3	SBI Magnum	Capesize	Sungdong	31 July 2015	$56.90	$34.14	SBI Magnum Shipping Company Limited
4	SBI Montecristo	Capesize	Sungdong	30 September 2015	$56.90	$34.14	SBI Montecristo Shipping Company Limited
5	SBI Aroma	Capesize	Sungdong	30 September 2015	$56.90	$34.14	SBI Aroma Shipping Company Limited
6	SBI Cohiba	Capesize	Sungdong	30 November 2015	$56.90	$34.14	SBI Cohiba Shipping Company Limited
7	SBI Habano	Capesize	Sungdong	30 November 2015	$56.90	$34.14	SBI Habano Shipping Company Limited
8	SBI Lonsdale	Capesize	Sungdong	31 January 2016	$56.90	$34.14	SBI Lonsdale Shipping Company Limited
9	SBI Partagas	Capesize	Sungdong	31 March 2016	$56.90	$34.14	SBI Partagas Shipping Company Limited
10	SBI Parejo	Capesize	Sungdong	30 April 2016	$56.90	$34.14	SBI Parejo Shipping Company Limited
11	SBI Toro	Capesize	Sungdong	31 May 2016	$56.90	$34.14	SBI Toro Shipping Company Limited

0103218-0000004 NY:20884372.11 151

12	SBI Tuscamina	Capesize	Sungdong	30 June 2016	$56.90	$34.14	SBI Tuscamina Shipping Company Limited
TOTAL (in Million)					$685.44	$411.264

1) Actual delivery date may deviate from the estimate

0103218-0000004 NY:20884372.11 152

SCHEDULE 7

MANDATORY COST FORMULA

1. The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of compliance with (a) the requirements of the Financial Conduct Authority and/or the Prudential Regulation Authority (or, in any case, any other authority which replaces all or any of its functions) or (b) the requirements of the European Central Bank.

2. On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall calculate, as a percentage rate, a rate (the Additional Cost Rate) for each Lender, in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Agent as a weighted average of the Lenders' Additional Cost Rates (weighted in proportion to the percentage participation of each Lender in the relevant Advance) and will be expressed as a percentage rate per annum.

3. The Additional Cost Rate for any Lender lending from a lending office in a Participating Member State will be the percentage notified by that Lender to the Agent. This percentage will be certified by that Lender in its notice to the Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender's participation in all Advances made from that lending office) of complying with the minimum reserve requirements of the European Central Bank in respect of loans made from that lending office.

4. The Additional Cost Rate for any Lender lending from a lending office in the United Kingdom will be calculated by the Agent as follows:

percent per annum

where:

E is designed to compensate Lenders for amounts payable under all the Fees Rules and is calculated by the Agent as being the average of the most recent rates of charge supplied by the Lenders to the Agent pursuant to paragraph 6 below and expressed in pounds per £1,000,000.

5. For the purposes of this Schedule:

(a) Eligible Liabilities and Special Deposits have the meanings given to them from time to time under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of England;

(b) Fees Rules means the rules on periodic fees contained in the Financial Conduct Authority Fees Manual or the Prudential Regulation Authority Fees Manual (as the case may be) or such other law or regulation as may be in force from time to time in respect of the payment of fees for the acceptance of deposits;

(c) Fee Tariffs means the fee tariffs specified in the relevant Fees Rules under the activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee required pursuant to the relevant Fees Rules but taking into account any applicable discount rate);

(d) Participating Member State means any member state of the European Union that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Union relating to European Monetary Union; and

0103218-0000004 NY:20884372.11 153

(e) Tariff Base has the meaning given to it in, and will be calculated in accordance with, the relevant Fees Rules.

6. If requested by the Agent, each Lender shall, as soon as practicable after publication by the Financial Conduct Authority or the Prudential Regulation Authority (as the case may be), supply to the Agent, the aggregate of rates of charge payable by that Lender to each the Financial Conduct Authority and the Prudential Regulation Authority pursuant to the relevant Fees Rules in respect of the relevant financial year of the Financial Conduct Authority or the Prudential Regulation Authority (as the case may be) (calculated for this purpose by that Lender as being the average of the Fee Tariffs applicable to that Lender for that financial year) and expressed in pounds per £1,000,000 of each Tariff Base of that Lender.

7. Each Lender shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the following information in writing on or prior to the date on which it becomes a Lender:

(d) the jurisdiction of its lending office; and

(e) any other information that the Agent may reasonably require for such purpose.

Each Lender shall promptly notify the Agent in writing of any change to the information provided by it pursuant to this paragraph.

8. The rates of charge of each Lender for the purpose of E above shall be determined by the Agent based upon the information supplied to it pursuant to paragraph 6 above and on the assumption that, unless a Lender notifies the Agent to the contrary, each Lender's obligations in relation to cash ratio deposits and Special Deposits are the same as those of a typical bank from its jurisdiction of incorporation with a lending office in the same jurisdiction as its lending office.

9. The Agent shall have no liability to any person if such determination results in an Additional Cost Rate which over or under compensates any Lender and shall be entitled to assume that the information provided by any Lender pursuant to paragraphs 3, 6 and 7 above is true and correct in all respects.

10. The Agent shall distribute the additional amounts received as a result of the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender pursuant to paragraphs 3, 6 and 7 above.

11. Any determination by the Agent pursuant to this Schedule in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the absence of manifest error, be conclusive and binding on all parties.

12. The Agent may from time to time, after consultation with the Guarantor and the Lenders, determine and notify to all parties any amendments which are required to be made to this Schedule in order to comply with any change in law, regulation or any requirements from time to time imposed by the Financial Conduct Authority, the Prudential Regulation Authority or the European Central Bank (or, in any case, any other authority which replaces all or any of its functions) and any such determination shall, in the absence of manifest error, be conclusive and binding on all parties.

0103218-0000004 NY:20884372.11 154

SCHEDULE 8

BORROWERS

Name	Jurisdiction of incorporation	Registered office
SBI Camacho Shipping Company Limited	Republic of the Marshall Islands	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
SBI Montesino Shipping Company Limited	Republic of the Marshall Islands	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
SBI Magnum Shipping Company Limited	Republic of the Marshall Islands	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
SBI Montecristo Shipping Company Limited	Republic of the Marshall Islands	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
SBI Aroma Shipping Company Limited	Republic of the Marshall Islands	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
SBI Cohiba Shipping Company Limited	Republic of the Marshall Islands	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
SBI Habano Shipping Company Limited	Republic of the Marshall Islands	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
SBI Lonsdale Shipping Company Limited	Republic of the Marshall Islands	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
SBI Partagas Shipping Company Limited	Republic of the Marshall Islands	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
SBI Parejo Shipping Company Limited	Republic of the Marshall Islands	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
SBI Toro Shipping Company Limited	Republic of the Marshall Islands	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
SBI Tuscamina Shipping Company Limited	Republic of the Marshall Islands	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960

0103218-0000004 NY:20884372.11 155

SCHEDULE 9

AMORTIZATION SCHEDULE

	Please note: The repayment schedule is based on the assumption that the commercial loan will carry a 15-year tenor through refinancings.
							Commercial
			KEXIM		KSURE		Fixed		Floating
			160,000,000		160,000,000		75,000,000		16,264,000
			39	%	39	%	18	%	4	%
#	Name	Delivery date
1	SBI Camacho	Thursday, April 30, 2015	14,098,972.92		14,098,972.92		6,608,893.56		1,433,160.60
		Repayment Date:
		Saturday, October 31, 2015	587,457.21		587,457.21		-		47,772.02
		Saturday, April 30, 2016	587,457.21		587,457.21		-		47,772.02
		Monday, October 31, 2016	587,457.21		587,457.21		-		47,772.02
		Sunday, April 30, 2017	587,457.21		587,457.21		-		47,772.02
		Tuesday, October 31, 2017	587,457.21		587,457.21		-		47,772.02
		Monday, April 30, 2018	587,457.21		587,457.21		-		47,772.02
		Wednesday, October 31, 2018	587,457.21		587,457.21		-		47,772.02
		Tuesday, April 30, 2019	587,457.21		587,457.21		-		47,772.02
		Thursday, October 31, 2019	587,457.21		587,457.21		-		47,772.02
		Thursday, April 30, 2020	587,457.21		587,457.21		-		47,772.02
		Saturday, October 31, 2020	587,457.21		587,457.21		-		47,772.02
		Friday, April 30, 2021	587,457.21		587,457.21		-		47,772.02
		Sunday, October 31, 2021	587,457.21		587,457.21		-		47,772.02
		Saturday, April 30, 2022	587,457.21		587,457.21		-		47,772.02
		Monday, October 31, 2022	587,457.21		587,457.21				47,772.02
		Sunday, April 30, 2023	587,457.21		587,457.21		-		47,772.02
		Tuesday, October 31, 2023	587,457.21		587,457.21		-		47,772.02
		Tuesday, April 30, 2024	587,457.21		587,457.21		-		47,772.02
		Thursday, October 31, 2024	587,457.21		587,457.21		-		47,772.02
		Wednesday, April 30, 2025	587,457.21		587,457.21		-		47,772.02
		Friday, October 31, 2025	587,457.21		587,457.21		-		47,772.02
		Thursday, April 30, 2026	587,457.21		587,457.21		-		47,772.02
		Saturday, October 31, 2026	587,457.21		587,457.21		-		47,772.02
		Friday, April 30, 2027	587,457.21		587,457.21		-		47,772.02
		Sunday, October 31, 2027					-		47,772.02
		Sunday, April 30, 2028					-		47,772.02
		Tuesday, October 31, 2028					-		47,772.02
		Monday, April 30, 2029					-		47,772.02
		Wednesday, October 31, 2029					-		47,772.02
		Tuesday, April 30, 2030					6,608,893.56		47,772.02
		TOTAL	-		-		-		-
2	SBI Montesino	Sunday, May 31, 2015	13,081,232.49		13,081,232.49		6,131,827.73		1,329,707.28

0103218-0000004 NY:20884372.11 156

		Repayment Date:
		Monday, November 30, 2015	545,051.35	545,051.35	-	44,323.58
		Tuesday, May 31, 2016	545,051.35	545,051.35	-	44,323.58
		Wednesday, November 30, 2016	545,051.35	545,051.35	-	44,323.58
		Wednesday, May 31, 2017	545,051.35	545,051.35	-	44,323.58
		Thursday, November 30, 2017	545,051.35	545,051.35	-	44,323.58
		Thursday, May 31, 2018	545,051.35	545,051.35	-	44,323.58
		Friday, November 30, 2018	545,051.35	545,051.35	-	44,323.58
		Friday, May 31, 2019	545,051.35	545,051.35	-	44,323.58
		Saturday, November 30, 2019	545,051.35	545,051.35	-	44,323.58
		Sunday, May 31, 2020	545,051.35	545,051.35	-	44,323.58
		Monday, November 30, 2020	545,051.35	545,051.35	-	44,323.58
		Monday, May 31, 2021	545,051.35	545,051.35	-	44,323.58
		Tuesday, November 30, 2021	545,051.35	545,051.35	-	44,323.58
		Tuesday, May 31, 2022	545,051.35	545,051.35	-	44,323.58
		Wednesday, November 30, 2022	545,051.35	545,051.35	-	44,323.58
		Wednesday, May 31, 2023	545,051.35	545,051.35	-	44,323.58
		Thursday, November 30, 2023	545,051.35	545,051.35	-	44,323.58
		Friday, May 31, 2024	545,051.35	545,051.35	-	44,323.58
		Saturday, November 30, 2024	545,051.35	545,051.35	-	44,323.58
		Saturday, May 31, 2025	545,051.35	545,051.35	-	44,323.58
		Sunday, November 30, 2025	545,051.35	545,051.35	-	44,323.58
		Sunday, May 31, 2026	545,051.35	545,051.35	-	44,323.58
		Monday, November 30, 2026	545,051.35	545,051.35	-	44,323.58
		Monday, May 31, 2027	545,051.35	545,051.35	-	44,323.58
		Tuesday, November 30, 2027			-	44,323.58
		Wednesday, May 31, 2028			-	44,323.58
		Thursday, November 30, 2028			-	44,323.58
		Thursday, May 31, 2029			-	44,323.58
		Friday, November 30, 2029			-	44,323.58
		Friday, May 31, 2030			6,131,827.73	44,323.58
		TOTAL	-	-	-	-
3	SBI Magnum	Friday, July 31, 2015	13,281,979.46	13,281,979.46	6,225,927.87	1,350,113.21
		Repayment Date:
		Sunday, January 31, 2016	553,415.81	553,415.81	-	45,003.77
		Sunday, July 31, 2016	553,415.81	553,415.81	-	45,003.77
		Tuesday, January 31, 2017	553,415.81	553,415.81	-	45,003.77
		Monday, July 31, 2017	553,415.81	553,415.81	-	45,003.77
		Wednesday, January 31, 2018	553,415.81	553,415.81	-	45,003.77
		Tuesday, July 31, 2018	553,415.81	553,415.81	-	45,003.77
		Thursday, January 31, 2019	553,415.81	553,415.81	-	45,003.77
		Wednesday, July 31, 2019	553,415.81	553,415.81	-	45,003.77
		Friday, January 31, 2020	553,415.81	553,415.81	-	45,003.77
		Friday, July 31, 2020	553,415.81	553,415.81	-	45,003.77
		Sunday, January 31, 2021	553,415.81	553,415.81	-	45,003.77
		Saturday, July 31, 2021	553,415.81	553,415.81	-	45,003.77
		Monday, January 31, 2022	553,415.81	553,415.81	-	45,003.77
		Sunday, July 31, 2022	553,415.81	553,415.81	-	45,003.77

0103218-0000004 NY:20884372.11 157

		Tuesday, January 31, 2023	553,415.81	553,415.81	-	45,003.77
		Monday, July 31, 2023	553,415.81	553,415.81	-	45,003.77
		Wednesday, January 31, 2024	553,415.81	553,415.81	-	45,003.77
		Wednesday, July 31, 2024	553,415.81	553,415.81	-	45,003.77
		Friday, January 31, 2025	553,415.81	553,415.81	-	45,003.77
		Thursday, July 31, 2025	553,415.81	553,415.81	-	45,003.77
		Saturday, January 31, 2026	553,415.81	553,415.81	-	45,003.77
		Friday, July 31, 2026	553,415.81	553,415.81	-	45,003.77
		Sunday, January 31, 2027	553,415.81	553,415.81	-	45,003.77
		Saturday, July 31, 2027	553,415.81	553,415.81	-	45,003.77
		Monday, January 31, 2028			-	45,003.77
		Monday, July 31, 2028			-	45,003.77
		Wednesday, January 31, 2029			-	45,003.77
		Tuesday, July 31, 2029			-	45,003.77
		Thursday, January 31, 2030			-	45,003.77
		Wednesday, July 31, 2030			6,225,927.87	45,003.77
		TOTAL	-	-	-	-
4	SBI Montecristo	Wednesday, September 30, 2015	13,281,979.46	13,281,979.46	6,225,927.87	1,350,113.21
		Repayment Date:
		Thursday, March 31, 2016	553,415.81	553,415.81	-	45,003.77
		Friday, September 30, 2016	553,415.81	553,415.81	-	45,003.77
		Friday, March 31, 2017	553,415.81	553,415.81	-	45,003.77
		Saturday, September 30, 2017	553,415.81	553,415.81	-	45,003.77
		Saturday, March 31, 2018	553,415.81	553,415.81	-	45,003.77
		Sunday, September 30, 2018	553,415.81	553,415.81	-	45,003.77
		Sunday, March 31, 2019	553,415.81	553,415.81	-	45,003.77
		Monday, September 30, 2019	553,415.81	553,415.81	-	45,003.77
		Tuesday, March 31, 2020	553,415.81	553,415.81	-	45,003.77
		Wednesday, September 30, 2020	553,415.81	553,415.81	-	45,003.77
		Wednesday, March 31, 2021	553,415.81	553,415.81	-	45,003.77
		Thursday, September 30, 2021	553,415.81	553,415.81	-	45,003.77
		Thursday, March 31, 2022	553,415.81	553,415.81	-	45,003.77
		Friday, September 30, 2022	553,415.81	553,415.81	-	45,003.77
		Friday, March 31, 2023	553,415.81	553,415.81	-	45,003.77
		Saturday, September 30, 2023	553,415.81	553,415.81	-	45,003.77
		Sunday, March 31, 2024	553,415.81	553,415.81	-	45,003.77
		Monday, September 30, 2024	553,415.81	553,415.81	-	45,003.77
		Monday, March 31, 2025	553,415.81	553,415.81	-	45,003.77
		Tuesday, September 30, 2025	553,415.81	553,415.81	-	45,003.77
		Tuesday, March 31, 2026	553,415.81	553,415.81	-	45,003.77
		Wednesday, September 30, 2026	553,415.81	553,415.81	-	45,003.77
		Wednesday, March 31, 2027	553,415.81	553,415.81	-	45,003.77
		Thursday, September 30, 2027	553,415.81	553,415.81	-	45,003.77
		Friday, March 31, 2028			-	45,003.77
		Saturday, September 30, 2028			-	45,003.77
		Saturday, March 31, 2029			-	45,003.77
		Sunday, September 30, 2029			-	45,003.77

0103218-0000004 NY:20884372.11 158

		Sunday, March 31, 2030			-	45,003.77
		Monday, September 30, 2030			6,225,927.87	45,003.77
		TOTAL	-	-	-	-
5	SBI Aroma	Wednesday, September 30, 2015	13,281,979.46	13,281,979.46	6,225,927.87	1,350,113.21
		Repayment Date:
		Thursday, March 31, 2016	553,415.81	553,415.81	-	45,003.77
		Friday, September 30, 2016	553,415.81	553,415.81	-	45,003.77
		Friday, March 31, 2017	553,415.81	553,415.81	-	45,003.77
		Saturday, September 30, 2017	553,415.81	553,415.81	-	45,003.77
		Saturday, March 31, 2018	553,415.81	553,415.81	-	45,003.77
		Sunday, September 30, 2018	553,415.81	553,415.81	-	45,003.77
		Sunday, March 31, 2019	553,415.81	553,415.81	-	45,003.77
		Monday, September 30, 2019	553,415.81	553,415.81	-	45,003.77
		Tuesday, March 31, 2020	553,415.81	553,415.81	-	45,003.77
		Wednesday, September 30, 2020	553,415.81	553,415.81	-	45,003.77
		Wednesday, March 31, 2021	553,415.81	553,415.81	-	45,003.77
		Thursday, September 30, 2021	553,415.81	553,415.81	-	45,003.77
		Thursday, March 31, 2022	553,415.81	553,415.81	-	45,003.77
		Friday, September 30, 2022	553,415.81	553,415.81	-	45,003.77
		Friday, March 31, 2023	553,415.81	553,415.81	-	45,003.77
		Saturday, September 30, 2023	553,415.81	553,415.81	-	45,003.77
		Sunday, March 31, 2024	553,415.81	553,415.81	-	45,003.77
		Monday, September 30, 2024	553,415.81	553,415.81	-	45,003.77
		Monday, March 31, 2025	553,415.81	553,415.81	-	45,003.77
		Tuesday, September 30, 2025	553,415.81	553,415.81	-	45,003.77
		Tuesday, March 31, 2026	553,415.81	553,415.81	-	45,003.77
		Wednesday, September 30, 2026	553,415.81	553,415.81	-	45,003.77
		Wednesday, March 31, 2027	553,415.81	553,415.81	-	45,003.77
		Thursday, September 30, 2027	553,415.81	553,415.81	-	45,003.77
		Friday, March 31, 2028			-	45,003.77
		Saturday, September 30, 2028			-	45,003.77
		Saturday, March 31, 2029			-	45,003.77
		Sunday, September 30, 2029			-	45,003.77
		Sunday, March 31, 2030			-	45,003.77
		Monday, September 30, 2030			6,225,927.87	45,003.77
		TOTAL	-	-	-	-
6	SBI Cohiba	Monday, November 30, 2015	13,281,979.46	13,281,979.46	6,225,927.87	1,350,113.21
		Repayment Date:
		Tuesday, May 31, 2016	553,415.81	553,415.81	-	45,003.77
		Wednesday, November 30, 2016	553,415.81	553,415.81	-	45,003.77
		Wednesday, May 31, 2017	553,415.81	553,415.81	-	45,003.77
		Thursday, November 30, 2017	553,415.81	553,415.81	-	45,003.77
		Thursday, May 31, 2018	553,415.81	553,415.81	-	45,003.77
		Friday, November 30, 2018	553,415.81	553,415.81	-	45,003.77
		Friday, May 31, 2019	553,415.81	553,415.81	-	45,003.77

0103218-0000004 NY:20884372.11 159

		Saturday, November 30, 2019	553,415.81	553,415.81	-	45,003.77
		Sunday, May 31, 2020	553,415.81	553,415.81	-	45,003.77
		Monday, November 30, 2020	553,415.81	553,415.81	-	45,003.77
		Monday, May 31, 2021	553,415.81	553,415.81	-	45,003.77
		Tuesday, November 30, 2021	553,415.81	553,415.81	-	45,003.77
		Tuesday, May 31, 2022	553,415.81	553,415.81	-	45,003.77
		Wednesday, November 30, 2022	553,415.81	553,415.81	-	45,003.77
		Wednesday, May 31, 2023	553,415.81	553,415.81	-	45,003.77
		Thursday, November 30, 2023	553,415.81	553,415.81	-	45,003.77
		Friday, May 31, 2024	553,415.81	553,415.81	-	45,003.77
		Saturday, November 30, 2024	553,415.81	553,415.81	-	45,003.77
		Saturday, May 31, 2025	553,415.81	553,415.81	-	45,003.77
		Sunday, November 30, 2025	553,415.81	553,415.81	-	45,003.77
		Sunday, May 31, 2026	553,415.81	553,415.81	-	45,003.77
		Monday, November 30, 2026	553,415.81	553,415.81	-	45,003.77
		Monday, May 31, 2027	553,415.81	553,415.81	-	45,003.77
		Tuesday, November 30, 2027	553,415.81	553,415.81	-	45,003.77
		Wednesday, May 31, 2028			-	45,003.77
		Thursday, November 30, 2028			-	45,003.77
		Thursday, May 31, 2029			-	45,003.77
		Friday, November 30, 2029			-	45,003.77
		Friday, May 31, 2030			-	45,003.77
		Saturday, November 30, 2030			6,225,927.87	45,003.77
		TOTAL	-	-	-	-
7	SBI Habano	Monday, November 30, 2015	13,281,979.46	13,281,979.46	6,225,927.87	1,350,113.21
		Repayment Date:
		Tuesday, May 31, 2016	553,415.81	553,415.81	-	45,003.77
		Wednesday, November 30, 2016	553,415.81	553,415.81	-	45,003.77
		Wednesday, May 31, 2017	553,415.81	553,415.81	-	45,003.77
		Thursday, November 30, 2017	553,415.81	553,415.81	-	45,003.77
		Thursday, May 31, 2018	553,415.81	553,415.81	-	45,003.77
		Friday, November 30, 2018	553,415.81	553,415.81	-	45,003.77
		Friday, May 31, 2019	553,415.81	553,415.81	-	45,003.77
		Saturday, November 30, 2019	553,415.81	553,415.81	-	45,003.77
		Sunday, May 31, 2020	553,415.81	553,415.81	-	45,003.77
		Monday, November 30, 2020	553,415.81	553,415.81	-	45,003.77
		Monday, May 31, 2021	553,415.81	553,415.81	-	45,003.77
		Tuesday, November 30, 2021	553,415.81	553,415.81	-	45,003.77
		Tuesday, May 31, 2022	553,415.81	553,415.81	-	45,003.77
		Wednesday, November 30, 2022	553,415.81	553,415.81	-	45,003.77
		Wednesday, May 31, 2023	553,415.81	553,415.81	-	45,003.77
		Thursday, November 30, 2023	553,415.81	553,415.81	-	45,003.77
		Friday, May 31, 2024	553,415.81	553,415.81	-	45,003.77
		Saturday, November 30, 2024	553,415.81	553,415.81	-	45,003.77
		Saturday, May 31, 2025	553,415.81	553,415.81	-	45,003.77
		Sunday, November 30, 2025	553,415.81	553,415.81	-	45,003.77
		Sunday, May 31, 2026	553,415.81	553,415.81	-	45,003.77

0103218-0000004 NY:20884372.11 160

		Monday, November 30, 2026	553,415.81	553,415.81	-	45,003.77
		Monday, May 31, 2027	553,415.81	553,415.81	-	45,003.77
		Tuesday, November 30, 2027	553,415.81	553,415.81	-	45,003.77
		Wednesday, May 31, 2028			-	45,003.77
		Thursday, November 30, 2028			-	45,003.77
		Thursday, May 31, 2029			-	45,003.77
		Friday, November 30, 2029			-	45,003.77
		Friday, May 31, 2030			-	45,003.77
		Saturday, November 30, 2030			6,225,927.87	45,003.77
		TOTAL	-	-	-	-
8	SBI Lonsdale	Sunday, January 31, 2016	13,281,979.46	13,281,979.46	6,225,927.87	1,350,113.21
		Repayment Date:
		Sunday, July 31, 2016	553,415.81	553,415.81	-	45,003.77
		Tuesday, January 31, 2017	553,415.81	553,415.81	-	45,003.77
		Monday, July 31, 2017	553,415.81	553,415.81	-	45,003.77
		Wednesday, January 31, 2018	553,415.81	553,415.81	-	45,003.77
		Tuesday, July 31, 2018	553,415.81	553,415.81	-	45,003.77
		Thursday, January 31, 2019	553,415.81	553,415.81	-	45,003.77
		Wednesday, July 31, 2019	553,415.81	553,415.81	-	45,003.77
		Friday, January 31, 2020	553,415.81	553,415.81	-	45,003.77
		Friday, July 31, 2020	553,415.81	553,415.81	-	45,003.77
		Sunday, January 31, 2021	553,415.81	553,415.81	-	45,003.77
		Saturday, July 31, 2021	553,415.81	553,415.81	-	45,003.77
		Monday, January 31, 2022	553,415.81	553,415.81	-	45,003.77
		Sunday, July 31, 2022	553,415.81	553,415.81	-	45,003.77
		Tuesday, January 31, 2023	553,415.81	553,415.81	-	45,003.77
		Monday, July 31, 2023	553,415.81	553,415.81	-	45,003.77
		Wednesday, January 31, 2024	553,415.81	553,415.81	-	45,003.77
		Wednesday, July 31, 2024	553,415.81	553,415.81	-	45,003.77
		Friday, January 31, 2025	553,415.81	553,415.81	-	45,003.77
		Thursday, July 31, 2025	553,415.81	553,415.81	-	45,003.77
		Saturday, January 31, 2026	553,415.81	553,415.81	-	45,003.77
		Friday, July 31, 2026	553,415.81	553,415.81	-	45,003.77
		Sunday, January 31, 2027	553,415.81	553,415.81	-	45,003.77
		Saturday, July 31, 2027	553,415.81	553,415.81	-	45,003.77
		Monday, January 31, 2028	553,415.81	553,415.81	-	45,003.77
		Monday, July 31, 2028			-	45,003.77
		Wednesday, January 31, 2029			-	45,003.77
		Tuesday, July 31, 2029			-	45,003.77
		Thursday, January 31, 2030			-	45,003.77
		Wednesday, July 31, 2030			-	45,003.77
		Friday, January 31, 2031			6,225,927.87	45,003.77
		TOTAL	-	-	-	-
9	SBI Partagas	Thursday, March 31, 2016	13,281,979.46	13,281,979.46	6,225,927.87	1,350,113.21
		Repayment Date:

0103218-0000004 NY:20884372.11 161

		Friday, September 30, 2016	553,415.81	553,415.81	-	45,003.77
		Friday, March 31, 2017	553,415.81	553,415.81	-	45,003.77
		Saturday, September 30, 2017	553,415.81	553,415.81	-	45,003.77
		Saturday, March 31, 2018	553,415.81	553,415.81	-	45,003.77
		Sunday, September 30, 2018	553,415.81	553,415.81	-	45,003.77
		Sunday, March 31, 2019	553,415.81	553,415.81	-	45,003.77
		Monday, September 30, 2019	553,415.81	553,415.81	-	45,003.77
		Tuesday, March 31, 2020	553,415.81	553,415.81	-	45,003.77
		Wednesday, September 30, 2020	553,415.81	553,415.81	-	45,003.77
		Wednesday, March 31, 2021	553,415.81	553,415.81	-	45,003.77
		Thursday, September 30, 2021	553,415.81	553,415.81	-	45,003.77
		Thursday, March 31, 2022	553,415.81	553,415.81	-	45,003.77
		Friday, September 30, 2022	553,415.81	553,415.81	-	45,003.77
		Friday, March 31, 2023	553,415.81	553,415.81	-	45,003.77
		Saturday, September 30, 2023	553,415.81	553,415.81	-	45,003.77
		Sunday, March 31, 2024	553,415.81	553,415.81	-	45,003.77
		Monday, September 30, 2024	553,415.81	553,415.81	-	45,003.77
		Monday, March 31, 2025	553,415.81	553,415.81	-	45,003.77
		Tuesday, September 30, 2025	553,415.81	553,415.81	-	45,003.77
		Tuesday, March 31, 2026	553,415.81	553,415.81	-	45,003.77
		Wednesday, September 30, 2026	553,415.81	553,415.81	-	45,003.77
		Wednesday, March 31, 2027	553,415.81	553,415.81	-	45,003.77
		Thursday, September 30, 2027	553,415.81	553,415.81	-	45,003.77
		Friday, March 31, 2028	553,415.81	553,415.81	-	45,003.77
		Saturday, September 30, 2028			-	45,003.77
		Saturday, March 31, 2029			-	45,003.77
		Sunday, September 30, 2029			-	45,003.77
		Sunday, March 31, 2030			-	45,003.77
		Monday, September 30, 2030			-	45,003.77
		Monday, March 31, 2031			6,225,927.87	45,003.77
		TOTAL	-	-	-	-
10	SBI Parejo	Saturday, April 30, 2016	13,281,979.46	13,281,979.46	6,225,927.87	1,350,113.21
		Repayment Date:
		Monday, October 31, 2016	553,415.81	553,415.81	-	45,003.77
		Sunday, April 30, 2017	553,415.81	553,415.81	-	45,003.77
		Tuesday, October 31, 2017	553,415.81	553,415.81	-	45,003.77
		Monday, April 30, 2018	553,415.81	553,415.81	-	45,003.77
		Wednesday, October 31, 2018	553,415.81	553,415.81	-	45,003.77
		Tuesday, April 30, 2019	553,415.81	553,415.81	-	45,003.77
		Thursday, October 31, 2019	553,415.81	553,415.81	-	45,003.77
		Thursday, April 30, 2020	553,415.81	553,415.81	-	45,003.77
		Saturday, October 31, 2020	553,415.81	553,415.81	-	45,003.77
		Friday, April 30, 2021	553,415.81	553,415.81	-	45,003.77
		Sunday, October 31, 2021	553,415.81	553,415.81	-	45,003.77
		Saturday, April 30, 2022	553,415.81	553,415.81	-	45,003.77
		Monday, October 31, 2022	553,415.81	553,415.81	-	45,003.77
		Sunday, April 30, 2023	553,415.81	553,415.81	-	45,003.77

0103218-0000004 NY:20884372.11 162

		Tuesday, October 31, 2023	553,415.81	553,415.81	-	45,003.77
		Tuesday, April 30, 2024	553,415.81	553,415.81	-	45,003.77
		Thursday, October 31, 2024	553,415.81	553,415.81	-	45,003.77
		Wednesday, April 30, 2025	553,415.81	553,415.81	-	45,003.77
		Friday, October 31, 2025	553,415.81	553,415.81	-	45,003.77
		Thursday, April 30, 2026	553,415.81	553,415.81	-	45,003.77
		Saturday, October 31, 2026	553,415.81	553,415.81	-	45,003.77
		Friday, April 30, 2027	553,415.81	553,415.81	-	45,003.77
		Sunday, October 31, 2027	553,415.81	553,415.81	-	45,003.77
		Sunday, April 30, 2028	553,415.81	553,415.81	-	45,003.77
		Tuesday, October 31, 2028			-	45,003.77
		Monday, April 30, 2029			-	45,003.77
		Wednesday, October 31, 2029			-	45,003.77
		Tuesday, April 30, 2030			-	45,003.77
		Thursday, October 31, 2030			-	45,003.77
		Wednesday, April 30, 2031			6,225,927.87	45,003.77
		TOTAL	-	-	-	-
11	SBI Toro	Tuesday, May 31, 2016	13,281,979.46	13,281,979.46	6,225,927.87	1,350,113.21
		Repayment Date:
		Wednesday, November 30, 2016	553,415.81	553,415.81	-	45,003.77
		Wednesday, May 31, 2017	553,415.81	553,415.81	-	45,003.77
		Thursday, November 30, 2017	553,415.81	553,415.81	-	45,003.77
		Thursday, May 31, 2018	553,415.81	553,415.81	-	45,003.77
		Friday, November 30, 2018	553,415.81	553,415.81	-	45,003.77
		Friday, May 31, 2019	553,415.81	553,415.81	-	45,003.77
		Saturday, November 30, 2019	553,415.81	553,415.81	-	45,003.77
		Sunday, May 31, 2020	553,415.81	553,415.81	-	45,003.77
		Monday, November 30, 2020	553,415.81	553,415.81	-	45,003.77
		Monday, May 31, 2021	553,415.81	553,415.81	-	45,003.77
		Tuesday, November 30, 2021	553,415.81	553,415.81	-	45,003.77
		Tuesday, May 31, 2022	553,415.81	553,415.81	-	45,003.77
		Wednesday, November 30, 2022	553,415.81	553,415.81	-	45,003.77
		Wednesday, May 31, 2023	553,415.81	553,415.81	-	45,003.77
		Thursday, November 30, 2023	553,415.81	553,415.81	-	45,003.77
		Friday, May 31, 2024	553,415.81	553,415.81	-	45,003.77
		Saturday, November 30, 2024	553,415.81	553,415.81	-	45,003.77
		Saturday, May 31, 2025	553,415.81	553,415.81	-	45,003.77
		Sunday, November 30, 2025	553,415.81	553,415.81	-	45,003.77
		Sunday, May 31, 2026	553,415.81	553,415.81	-	45,003.77
		Monday, November 30, 2026	553,415.81	553,415.81	-	45,003.77
		Monday, May 31, 2027	553,415.81	553,415.81	-	45,003.77
		Tuesday, November 30, 2027	553,415.81	553,415.81	-	45,003.77
		Wednesday, May 31, 2028	553,415.81	553,415.81	-	45,003.77
		Thursday, November 30, 2028			-	45,003.77
		Thursday, May 31, 2029			-	45,003.77
		Friday, November 30, 2029			-	45,003.77
		Friday, May 31, 2030			-	45,003.77

0103218-0000004 NY:20884372.11 163

		Saturday, November 30, 2030			-	45,003.77
		Saturday, May 31, 2031			6,225,927.87	45,003.77
		TOTAL	-	-	-	-
12	SBI Tuscamina	Thursday, June 30, 2016	13,281,979.46	13,281,979.46	6,225,927.87	1,350,113.21
		Repayment Date:
		Saturday, December 31, 2016	553,415.81	553,415.81	-	45,003.77
		Friday, June 30, 2017	553,415.81	553,415.81	-	45,003.77
		Sunday, December 31, 2017	553,415.81	553,415.81	-	45,003.77
		Saturday, June 30, 2018	553,415.81	553,415.81	-	45,003.77
		Monday, December 31, 2018	553,415.81	553,415.81	-	45,003.77
		Sunday, June 30, 2019	553,415.81	553,415.81	-	45,003.77
		Tuesday, December 31, 2019	553,415.81	553,415.81	-	45,003.77
		Tuesday, June 30, 2020	553,415.81	553,415.81	-	45,003.77
		Thursday, December 31, 2020	553,415.81	553,415.81	-	45,003.77
		Wednesday, June 30, 2021	553,415.81	553,415.81	-	45,003.77
		Friday, December 31, 2021	553,415.81	553,415.81	-	45,003.77
		Thursday, June 30, 2022	553,415.81	553,415.81	-	45,003.77
		Saturday, December 31, 2022	553,415.81	553,415.81	-	45,003.77
		Friday, June 30, 2023	553,415.81	553,415.81	-	45,003.77
		Sunday, December 31, 2023	553,415.81	553,415.81	-	45,003.77
		Sunday, June 30, 2024	553,415.81	553,415.81	-	45,003.77
		Tuesday, December 31, 2024	553,415.81	553,415.81	-	45,003.77
		Monday, June 30, 2025	553,415.81	553,415.81	-	45,003.77
		Wednesday, December 31, 2025	553,415.81	553,415.81	-	45,003.77
		Tuesday, June 30, 2026	553,415.81	553,415.81	-	45,003.77
		Thursday, December 31, 2026	553,415.81	553,415.81	-	45,003.77
		Wednesday, June 30, 2027	553,415.81	553,415.81	-	45,003.77
		Friday, December 31, 2027	553,415.81	553,415.81	-	45,003.77
		Friday, June 30, 2028	553,415.81	553,415.81	-	45,003.77
		Sunday, December 31, 2028			-	45,003.77
		Saturday, June 30, 2029			-	45,003.77
		Monday, December 31, 2029			-	45,003.77
		Sunday, June 30, 2030			-	45,003.77
		Tuesday, December 31, 2030			-	45,003.77
		Monday, June 30, 2031			6,225,927.87	45,003.77
		TOTAL	-	-	-	-

0103218-0000004 NY:20884372.11 164

[SIGNATURE PAGE FOLLOWS ON NEXT PAGE

0103218-0000004 NY:20884372.11 165

SIGNATORIES

DNB BANK ASA, NEW YORK BRANCH,

as Agent, Security Trustee, K-Sure Agent and KEXIM Guaranteed Loan Agent

By: /s/ Sanjiv Nayar    

Name: Sanjiv Nayar

Title: Senior Vice President

By: /s/ Cathleen Buckley    

Name: Cathleen Buckley

Title: Senior Vice President

DNB MARKETS, INC.

as Bookrunner and Mandated Lead Arranger

By: /s/ Theodore S. Jadick, Jr.    

Name: Theodore S. Jadick, Jr.

Title: President and CEO

By: /s/ Tor Ivar Hansen

Name: Tor Ivar Hansen

Title: Managing Director

DNB CAPITAL LLC

as Lender

By: /s/ Sanjiv Nayar    

Name: Sanjiv Nayar

Title: Senior Vice President

By: /s/ Cathleen Buckley    

Name: Cathleen Buckley

Signature Page to Loan Agreement

Title: Senior Vice President

DNB CAPITAL LLC

as Lender

By: /s/ Sanjiv Nayar    

Name: Sanjiv Nayar

Title: Senior Vice President

By: /s/ Sanjiv Nayar    

Name: Sanjiv Nayar

Title: Senior Vice President

THE EXPORT-IMPORT BANK OF KOREA

as Lender

By: /s/ Jin-young Lee    

Name: Jin-young Lee

Title: Senior Loan Officer

KOREA EXCHANGE BANK, HONG KING BRANCH,

as Lender

By: /s/ Sang-Syeb Kim    

Name: Sang-Syeb Kim

Title: General Manager

WOORI GLOBAL MARKETS ASIA LIMITED,

as Lender

By: /s/ Sangkuk Lee    

Name: Sangkuk Lee

Title: Chief Executive

By: /s/ Park, In Cheol    

Signature Page to Loan Agreement

Name: Park In Cheol

Title: CEO & Managing Director

KEXIM ASIA LIMITED,

as Lender

By: /s/ Wonhyup Kwon    

Name: Wonhyup Kwon

Title: Deputy Managing Director

PIMCO FUNDS: PRIVATE ACCOUNT PORTFOLIO SERIES LONG DURATION CORPORATE BOND PORTFOLIO,

By: Pacific Investment Management Company LLC, as Investment Manager

as Lender

By: /s/ T. Christian Stracke    

Name: T. Christian Stracke

Title: Managing Director

PIMCO FUNDS: PIMCO INVESTMENT GRADE CORPORATE BOND FUND,

By: Pacific Investment Management Company LLC, as Investment Manager

as Lender

By: /s/ T. Christian Stracke    

Name: T. Christian Stracke

Title: Managing Director

PIMCO FUNDS: PIMCO LONG-TERM CREDIT FUND,

By: Pacific Investment Management Company LLC, as Investment Manager

as Lender

By: /s/ T. Christian Stracke    

Name: T. Christian Stracke

Title: Managing Director

Signature Page to Loan Agreement

PIMCO FUNDS: PIMCO TOTAL RETURN FUND,

By: Pacific Investment Management Company LLC, as Investment Manager

as Lender

By: /s/ T. Christian Stracke    

Name: T. Christian Stracke

Title: Managing Director

BANK OF AMERICA, NATIONAL ASSOCIATION,

as Lender

By: /s/ Rhonda Shafer    

Name: Rhonda Shaver

Title: Vice President

MEGA INTERNATIONAL COMMERCIAL BANK CO. LTD., OFFSHORE BANKING BRANCH

as Lender

By: /s/ Yen Chen    

Name: Yen Chen

Title: Vice President

KEB LA FINANCIAL CORP.,

as Lender

By: /s/ Sammoon Kim    

Name: Sammoon Kim

Title: Vice President

KOOKMIN BANK,

as Lender

By: /s/ Cha, In Hyun    

Name: Cha, In Hyun

Title: General Manager

NONGHYUP BANK,

as Lender

By: /s/ Joon Yong, Seo    

Signature Page to Loan Agreement

Name: Joon Yong, Seo

Title: Team Head

WOORI BANK.,

as Lender

By: /s/ Seung Hwan, Lee    

Name: Seung Hwan, Lee

Title: Head of Shipping & Aviation Team

By: /s/ Dong Su, Choi    

Name: Dong Su, Choi

Title: General Manager of Investment Banking Department

Signatory

Woori Bank acting through Gongduk-Dong Financial Center,

as Lender

executed and delivered on Jan 23, 2014

By: /s/ Dae Young, Kim    

Name: Dae Young, Kim

Title: General Manager

Signature Page to Loan Agreement

SCORPIO BULKERS INC.,

as Guarantor

By: /s/ Luca Forgione    

Name: Luca Forgione

Title: General Counsel

Signature Page to Loan Agreement

SBI CAMACHO SHIPPING COMPANY LIMITED,

SBI MONTESINO SHIPPING COMPANY LIMITED,

SBI MAGNUM SHIPPING COMPANY LIMITED,

SBI MONTECRISTO SHIPPING COMPANY LIMITED,

SBI AROMA SHIPPING COMPANY LIMITED,

SBI COHIBA SHIPPING COMPANY LIMITED,

SBI HABANO SHIPPING COMPANY LIMITED,

SBI LONSDALE SHIPPING COMPANY LIMITED,

SBI PARTAGAS SHIPPING COMPANY LIMITED,

SBI PAREJO SHIPPING COMPANY LIMITED,

SBI TORO SHIPPING COMPANY LIMITED,

SBI TUSCAMINA SHIPPING COMPANY LIMITED,

each as a Borrower

By: /s/ Hugh Baker    

Name: Hugh Baker

Title: Chief Financial Officer

Signature Page to Loan Agreement

EX-4.29

Exhibit - 4.29

Date: as of January 30, 2015

SCORPIO BULKERS INC.

as Borrower

THE GUARANTORS

listed in Schedule 1-A
as Guarantors

THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1-Bas Lenders

and

DEUTSCHE BANK AG FILIALE DEUTSCHLANDGESCHÄFT

as Lead Arranger, Administrative Agent, Security Trustee and Account Bank

________________________________________

CREDIT AGREEMENT

________________________________________

relating to the senior secured term credit facility in the amount of up to US$42,000,000

Confidential

TABLE OF CONTENTS

Page

1.INTERPRETATION    2

1.1Definitions    2

1.2Construction of certain terms    24

1.3Meaning of “month”    26

1.4Meaning of “subsidiary”    26

1.5General interpretation    26

1.6Headings    27

1.7Accounting Terms    27

1.8Inferences Regarding Materiality    27

2.FACILITY    27

2.1Amount of Facility    27

2.2Lenders’ participations in Advance    28

2.3Purpose of Advance    28

2.4Reduction and Cancellation of Total Commitments    28

3.POSITION OF THE LENDERS    28

3.1Interests Several    28

3.2Individual Right of Action    28

3.3Proceedings Requiring Required Lender Consent    28

3.4Obligations Several    28

3.5Replacement of a Lender.    29

4.DRAWDOWN    30

4.1Request for Advance    30

4.2Availability    30

4.3Notification to Lenders of Receipt of a Drawdown Notice    31

4.4Drawdown Notice Irrevocable    31

4.5Lenders to Make Available Contributions    31

4.6Disbursement of Advance    31

4.7Disbursement of Advance to Third Party    31

4.8Promissory Note.    31

5.INTEREST    32

5.1Normal Rate of Interest    32

5.2Payment of Normal Interest    32

5.3Payment of Accrued Interest    32

5.4Notification of Interest Periods and Rates of Normal Interest    32

5.5Notice of Prepayment    33

5.6Prepayment; Termination of Commitments    33

5.7Application of Prepayment    33

5.8Market Disruption.    33

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6.INTEREST PERIODS    34

6.1Commencement of Interest Periods    34

6.2Duration of Normal Interest Periods    34

6.3Duration of Interest Periods for Repayment Installments    34

6.4Non-availability of Matching Deposits for Interest Period Selected    34

7.DEFAULT INTEREST    35

7.1Payment of Default Interest on Overdue Amounts    35

7.2Default Rate of Interest    35

7.3Calculation of default rate of interest    35

7.4Notification of Interest Periods and Default Rates    36

7.5Payment of Accrued Default Interest    36

8.REPAYMENT AND PREPAYMENT    36

8.1Amount of Repayment Installments    36

8.2Repayment Dates    36

8.3Maturity Date    36

8.4Voluntary Prepayment    36

8.5Conditions for Voluntary Prepayment    36

8.6Effect of Notice of Prepayment    37

8.7Notification of Notice of Prepayment    37

8.8Application of Partial Prepayment    37

8.9Mandatory Prepayment    37

8.10Amounts Payable on Prepayment    38

8.11No Reborrowing    38

8.12Release of Borrower and/or Collateral Vessel Owning Guarantor    38

9.CONDITIONS PRECEDENT    38

9.1Documents, Fees and No Default    38

9.2Waiver of Conditions Precedent    39

10.REPRESENTATIONS AND WARRANTIES    41

10.1General    41

10.2Status    41

10.3Company Power; Consents    42

10.4Consents in Force    42

10.5Title.    42

10.6Legal Validity; Effective Security Interests    43

10.7No Third Party Security Interests    43

10.8No Conflicts    43

10.9Taxes.    44

10.10No Default    45

10.11Information    45

10.12No Litigation    46

10.13ISM Code and ISPS Code Compliance    46

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ii

10.14No Rebates, etc    46

10.15Compliance with Law; Environmentally Sensitive Material    46

10.16Ownership Structure.    47

10.17Pension Plans    47

10.18Margin Stock    47

10.19Investment Company, Public Utility, etc    47

10.20Asset Control.    48

10.21No Money Laundering    48

10.22Anti-bribery, anti-corruption and anti-money laundering    49

10.23Collateral Vessels    49

10.24Place of Business    49

10.25Solvency    49

10.26Borrower’s Business; Guarantors’ Business    50

10.27Immunity; Enforcement; Submission to Jurisdiction; Choice of Law.    50

10.28Status of Secured Liabilities    51

11.GENERAL AFFIRMATIVE AND NEGATIVE COVENANTS    51

11.1Affirmative Covenants    51

11.2Negative Covenants    59

12.FINANCIAL COVENANTS    62

12.1General    62

12.2Maximum Leverage    62

12.3Minimum Tangible Net Worth    62

12.4Minimum Interest Coverage    62

12.5Free Liquidity    62

13.MARINE INSURANCE COVENANTS    63

13.1General    63

13.2Maintenance of Obligatory Insurances    63

13.3Terms of Obligatory Insurances    63

13.4Further Protections for the Creditor Parties    64

13.5Renewal of Obligatory Insurances    65

13.6Copies of Policies; Letters of Undertaking    65

13.7Copies of Certificates of Entry    66

13.8Deposit of Original Policies    67

13.9Payment of Premiums    67

13.10Guarantees    67

13.11Compliance with Terms of Insurances    67

13.12Alteration to Terms of Insurances    68

13.13Settlement of Claims    68

13.14Provision of Copies of Communications    68

13.15Provision of Information    68

13.16Mortgagee’s Interest, Additional Perils and Political Risk Insurances    69

13.17Review of Insurance Requirements    69

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iii

13.18Modification of Insurance Requirements    69

13.19Compliance with Instructions    69

14.COLLATERAL VESSEL COVENANTS    69

14.1General    69

14.2Collateral Vessel’s Name and Registration    70

14.3Repair and Classification    70

14.4Classification Society Instructions    70

14.5Modification    71

14.6Removal of Parts    71

14.7Surveys    71

14.8Inspection    71

14.9Prevention of and Release from Arrest    72

14.10Compliance with Laws etc    72

14.11Provision of Information    72

14.12Notification of Certain Events    73

14.13Restrictions on Chartering, Appointment of Managers etc    74

14.14Notice of Mortgage    75

14.15ISPS Code    75

15.SECURITY MAINTENANCE COVER RATIO    75

15.1General    75

15.2Security Maintenance Cover Ratio    75

15.3Provision of Additional Security; Prepayment    76

15.4Value of Additional Vessel Security    76

15.5Valuations Binding    76

15.6Provision of Information    76

15.7Payment of Valuation Expenses    76

15.8Application of Prepayment    76

16.GUARANTEE    76

16.1Guarantee and Indemnity    76

16.2Continuing Guarantee    77

16.3Performance of Guaranteed Obligations; Obligations pari passu.    77

16.4Reinstatement    78

16.5Liability Absolute and Unconditional    78

16.6Waiver of Promptness, etc    79

16.7Waiver of Revocation, etc    79

16.8Waiver of Certain Defenses    79

16.9Waiver of Disclosure, etc    79

16.10Immediate Recourse    80

16.11Acknowledgment of Benefits    80

16.12Independent Obligations    80

16.13Deferral of Guarantor’s Rights    80

16.14Limitation of Liability    80

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16.15Reliance of Creditor Parties    81

17.PAYMENTS AND CALCULATIONS    81

17.1Currency and Method of Payments    81

17.2Payment on Non-Business Day    81

17.3Basis for Calculation of Periodic Payments    81

17.4Distribution of Payments to Creditor Parties    81

17.5Permitted Deductions by Agent    82

17.6Agent Only Obliged to Pay When Monies Received    82

17.7Refund to Agent of Monies Not Received    82

17.8Agent May Assume Receipt    82

17.9Creditor Party Accounts    82

17.10Agent’s Memorandum Account    83

17.11Accounts Prima Facie Evidence    83

18.APPLICATION OF RECEIPTS    83

18.1Normal Order of Application    83

18.2Variation of Order of Application    83

18.3Notice of Variation of Order of Application    84

18.4Appropriation Rights Overridden    84

18.5Payments in Excess of Contribution.    84

19.APPLICATION OF EARNINGS, SALES PROCEEDS AND INSURANCE PROCEEDS    85

19.1General    85

19.2Payment of Earnings    85

19.3Location of Accounts    85

19.4Borrower’s Obligations Unaffected    85

19.5Use of Proceeds in Earnings Accounts    85

20.EVENTS OF DEFAULT    86

20.1Events of Default    86

20.2Actions Following an Event of Default    89

20.3Termination of Commitments    89

20.4Acceleration of Loan    89

20.5Multiple Notices; Action Without Notice    90

20.6Notification of Creditor Parties and Security Parties    90

20.7Creditor Party Rights Unimpaired    90

20.8Exclusion of Creditor Party Liability    90

21.FEES AND EXPENSES    90

21.1Arrangement, Commitment and Up-Front Fees    90

21.2Costs of Negotiation, Preparation, etc    91

21.3Costs of Variations, Amendments, Enforcement, etc    91

21.4Documentary Taxes    91

21.5Certification of Amounts    92

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v

22.INDEMNITIES    92

22.1Indemnities Regarding Borrowing and Repayment of Loan    92

22.2Breakage Costs    92

22.3Miscellaneous Indemnities    93

22.4Currency Indemnity    93

22.5Certification of Amounts    94

22.6Sums Deemed Due to a Lender    94

22.7Survival of Indemnities    94

23.NO SET-OFF OR TAX DEDUCTION; TAX INDEMNITY; FATCA    94

23.1No Deductions    94

23.2Grossing-Up for Taxes    94

23.3Evidence of Payment of Taxes    94

23.4Indemnity for Taxes    95

23.5Exclusion from Indemnity and Gross-Up for Taxes    95

23.6Delivery of Tax Forms    95

23.7FATCA Information    96

23.8FATCA Withholding    97

23.9FATCA Mitigation    98

23.10Additional Borrowers and/or Guarantors    98

23.11Tax Credits    99

24.ILLEGALITY, ETC    99

24.1Illegality    99

24.2Notification of Illegality    99

24.3Prepayment; Termination of Commitment    99

24.4Mitigation    100

25.INCREASED COSTS    100

25.1Increased Costs    100

25.2Meaning of “Increased Costs”    101

25.3Notification to Borrower of Claim for Increased Costs    101

25.4Payment of Increased Costs    101

25.5Notice of Prepayment    102

25.6Prepayment; Termination of Commitment    102

25.7Application of Prepayment    102

26.SET-OFF    102

26.1Application of Credit Balances    102

26.2Existing Rights Unaffected    102

26.3Sums Deemed Due to a Lender    103

26.4No Security Interest    103

27.TRANSFERS AND CHANGES IN LENDING OFFICES    103

27.1Transfer by Borrower or Guarantor    103

27.2Transfer by a Lender    103

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vi

27.3Transfer Certificate, Delivery and Notification    104

27.4Effective Date of Transfer Certificate    104

27.5No Transfer Without Transfer Certificate    104

27.6Lender Re-Organization; Waiver of Transfer Certificate    104

27.7Effect of Transfer Certificate    104

27.8Maintenance of Register of Lenders    105

27.9Reliance on Register of Lenders    106

27.10Authorization of Agent to Sign Transfer Certificates    106

27.11Registration Fee    106

27.12Sub-Participation; Subrogation Assignment    106

27.13Disclosure of Information    106

27.14Change of Lending Office    106

27.15Notification    106

27.16Security Over Lenders’ Rights    106

27.17Replacement of Reference Bank    107

28.VARIATIONS AND WAIVERS    107

28.1Variations, Waivers, Etc. by Required Lenders    107

28.2Variations, Waivers, Etc. Requiring Agreement of All Lenders    107

28.3Variations, Waivers, Etc. Relating to the Servicing Banks    108

28.4Exclusion of Other or Implied Variations    108

29.NOTICES    109

29.1General    109

29.2Addresses for Communications    109

29.3Effective Date of Notices    110

29.4Service Outside Business Hours    110

29.5Illegible Notices    110

29.6Valid Notices    111

29.7English Language    111

29.8Meaning of “Notice”    111

30.SUPPLEMENTAL    111

30.1Rights Cumulative, Non-Exclusive    111

30.2Severability of Provisions    111

30.3Counterparts    111

30.4Binding Effect    111

31.THE SERVICING BANKS AND PARALLEL DEBT    111

31.1Appointment and Granting    111

31.2Scope of Duties    113

31.3Reliance    114

31.4Knowledge    114

31.5Security Trustee and Agent as Lenders    115

31.6Indemnification of Security Trustee and Agent    115

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vii

31.7Reliance on Security Trustee or Agent    115

31.8Actions by Security Trustee and Agent    116

31.9Resignation and Removal    116

31.10Release of Collateral    117

31.11Parallel Debt.    117

31.12Instructions to Agent/Security Trustee    118

32.LAW AND JURISDICTION    118

32.1Governing Law    118

32.2Consent to Jurisdiction.    118

32.3Creditor Party Rights Unaffected    119

32.4Meaning of “Proceedings”    119

32.5Waiver of Sovereign Immunity    119

32.6Waiver of Damages    119

33.WAIVER OF JURY TRIAL    120

33.1WAIVER    120

34.PATRIOT ACT NOTICE    120

34.1PATRIOT Act Notice    120

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viii

TABLE OF CONTENTS

Page

EXECUTION PAGE    121

SCHEDULE 1-A INITIAL GUARANTORS    122

SCHEDULE 1-B LENDERS AND COMMITMENTS    123

SCHEDULE 2 POTENTIAL GUARANTORS AND COLLATERAL VESSELS    124

SCHEDULE 3 DRAWDOWN NOTICE    125

SCHEDULE 4 DOCUMENTS REQUIRED AS CONDITIONS PRECEDENT    129

SCHEDULE 5 TRANSFER CERTIFICATE    136

SCHEDULE 6 LIST OF APPROVED BROKERS    140

SCHEDULE 7 PAYMENT DATES AND AMOUNTS    141

SCHEDULE 8 MANDATORY COST FORMULA    143

APPENDIX A FORM OF CHARTER ASSIGNMENT    146

APPENDIX B FORM OF COMPLIANCE CERTIFICATE    147

APPENDIX C FORM OF EARNINGS ACCOUNT PLEDGE    148

APPENDIX D FORM OF EARNINGS ASSIGNMENT    149

APPENDIX E FORM OF GUARANTOR JOINDER AGREEMENT    150

APPENDIX F FORM OF FIRST PREFERRED SHIP MORTGAGE    151

APPENDIX G FORM OF MANAGER’S UNDERTAKING    152

APPENDIX H FORM OF NOTE    153

APPENDIX I FORM OF SHARES PLEDGE    154

APPENDIX J FORM OF INSURANCE ASSIGNMENT    155

APPENDIX K FORM OF SUPPLEMENT TO SHARES PLEDGE    156

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ii

THIS CREDIT AGREEMENT (this “Agreement”) is made as of January 30, 2015

AMONG

(1) SCORPIO BULKERS INC., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960, as borrower (the “Borrower”);

(2) THE GUARANTORS listed in Schedule 1-A (the “Initial Guarantors”), each a corporation incorporated and existing under the laws of the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960, as joint and several guarantors (together with any other person that becomes a guarantor pursuant to a Guarantor Joinder Agreement (as defined below), the “Guarantors”);

(3) THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1-B, as lenders (the “Lenders”, which expression includes their respective successors, transferees and assigns);

(4) DEUTSCHE BANK AG, FILIALE DEUTSCHLANDGESCHÄFT, as lead arranger (the “Lead Arranger”, which expression includes its successors, transferees and assigns) acting in such capacity through its office at Adolphsplatz 7, 20457 Hamburg, Germany;

(5) DEUTSCHE BANK AG FILIALE DEUTSCHLANDGESCHÄFT, as administrative agent for the Lenders (in such capacity, the “Agent”, which expression includes its successors, transferees and assigns), acting in such capacity through its office at Adolphsplatz 7, 20457 Hamburg, Germany;

(6) DEUTSCHE BANK AG FILIALE DEUTSCHLANDGESCHÄFT, as security trustee for the Lenders (in such capacity, the “Security Trustee”, which expression includes its successors, transferees and assigns), acting in such capacity through its office at Adolphsplatz 7, 20457 Hamburg, Germany; and

(7) DEUTSCHE BANK AG FILIALE DEUTSCHLANDGESCHÄFT, as account bank acting in such capacity through its principal office at Adolphsplatz 7, 20457 Hamburg, Germany.

BACKGROUND

The Lenders have agreed to make available to the Borrower a credit facility of up to $42,000,000 for the purpose of financing part of the acquisition cost of each of the Collateral Vessels.

IT IS AGREED as follows:

Confidential

1. INTERPRETATION

1.1 Definitions. Subject to Clause 1.5, in this Agreement:

“Account Bank” means DEUTSCHE BANK AG FILIALE DEUTSCHLANDGESCHÄFT, acting through its office at Adolphsplatz 7, 20457 Hamburg, Germany or ABN AMRO Bank N.V.;

“Account Pledges” means the Earnings Account Pledges and “Account Pledge” means either of such pledge agreements;

“Advance” means each borrowing of a portion of the Total Commitment by the Borrower or (as the context may require) the outstanding principal amount of such borrowing at any relevant time;

“Affiliate” means, as to any person, any other person that, directly or indirectly, controls, is controlled by or is under common control with such person or is a director or officer of such person, and for purposes of this definition, the term “control” (including the terms “controlling”, “controlled by” and “under common control with”) of a person means the possession, direct or indirect, of the power to vote 20% or more of the Voting Stock of such person or to direct or cause direction of the management and policies of such person, whether through the ownership of Voting Stock, by contract or otherwise;

“Agreed Form” means in relation to any document, that document in the form reasonably acceptable to the Agent with the consent of all Lenders (such consent not to be unreasonably withheld or delayed), or as otherwise reasonably approved in accordance with any other approval procedure specified in any relevant provision of any Finance Document;

“Approved Broker” means any of the companies listed on Schedule 6 or such other company proposed by the Borrower which the Agent may, with the consent of all Lenders (such consent not to be unreasonably withheld or delayed), approve from time to time for the purpose of valuing the Collateral Vessels who shall act as an expert and not as arbitrator and whose valuation shall be conclusive and binding on all parties to this Agreement;

“Approved Commercial Management Agreement” means, in relation to a Collateral Vessel in respect of its commercial management, a management agreement between the relevant Guarantor and an Approved Commercial Manager which shall be on the BIMCO Shipman 2009 form or such other form of management agreement, in each case which the Agent may reasonably approve on behalf of all Lenders;

“Approved Commercial Manager” means SCM, Scorpio Services Holdings Ltd or any affiliates of such entities, or any other reputable commercial management company proposed by the Borrower which the Agent, with the consent of all Lenders, may reasonably approve from time to time as the commercial manager of a Collateral Vessel;

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2

“Approved Flag” means the Bahamian, Hong Kong, Liberian, Panamanian, Singaporean or Marshall Islands flag or such other flag as the Agent may, with the consent of all Lenders (such consent not to be unreasonably withheld, conditioned or delayed), approve from time to time in writing as the flag on which a Collateral Vessel shall be registered;

“Approved Management Agreement” means either an Approved Commercial Management Agreement or an Approved Technical Management Agreement as the context requires;

“Approved Manager” means either an Approved Commercial Manager or an Approved Technical Manager, as the context requires;

“Approved Technical Management Agreement” means, in relation to a Collateral Vessel in respect of its technical management, a management agreement between the relevant Guarantor and an Approved Technical Manager which shall be on the BIMCO Shipman 2009 form or such other form of management agreement which the Agent may reasonably approve;

“Approved Technical Manager” means SSM, Zenith A.S. or any other reputable technical manager proposed by the Borrower which the Agent, with the consent of the Required Lenders may reasonably approve from time to time as technical manager of a Collateral Vessel;

“Availability Period” means the period commencing on the Effective Date and ending on the earlier of:

(a) (i) with respect to the SBI SAMBA, the date falling thirty (30) days after the date of delivery of such Collateral Vessel by the Builder to the relevant Guarantor but in any event not later than September 30, 2015 (or such later date as the Agent may, with the consent of all Lenders, agree with the Borrower); and (ii) with respect to the SBI RUMBA, the date falling thirty (30) days after the date of delivery of such Collateral Vessel by the Builder to the relevant Guarantor but in any event not later than February 29, 2016 (or such later date as the Agent may, with the consent of all Lenders, agree with the Borrower); or

(b) the date on which the Total Commitment is fully borrowed, cancelled or terminated;

“Available Commitments” means amounts readily available for drawing by the Borrower under committed revolving credit facilities with a maturity date in excess of twelve (12) months and which remain undrawn and could be drawn for general working capital or other general corporate purposes and provided that no event of default has occurred and is continuing under any such revolving credit facility and the Borrower is entitled to borrow under such committed revolving credit facility;

“Bank Secrecy Act” means the United States Bank Secrecy Act of 1970, as amended;

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“Base Prepayment Amount” means $2,000,000;

“Basel III” means any of the changes designed to strengthen any capital standards or introduce minimum liquidity or other requirements referenced in the publication of the Groups of Governors and Heads of Supervision of the Basel Committee on Banking Supervision (the “Basel Committee”) dated December 16, 2010, or any subsequent paper or document published by the Basel Committee on any of those requirements;

“Builder” means Imabari Shipbuilding Co., Ltd.;

“Builder’s Bank” has the meaning given in Clause 9.2(b)(ii);

“Business Day” means a day on which banks are open in Frankfurt, Germany; Hamburg, Germany; London, England; and New York, New York, U.S.A.;

“Capitalized Lease” means, as applied to any person, any lease of any property (whether real, personal or mixed) of which the discounted present value of the rental obligations of such person, as lessee, in conformity with US GAAP, is required to be capitalized on the balance sheet of such person; and “Capitalized Lease Obligation” is defined to mean the rental obligations, as aforesaid, under a Capitalized Lease;

“Cash Equivalents” means:

(a) securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof);

(b) time deposits, certificates of deposit or deposits held with any commercial bank of recognized standing organized under the laws of the United States of America, any state thereof or any foreign jurisdiction having capital and surplus in excess of $500,000,000;

(c) time deposits, certificates of deposit or deposits held with any Lender; and

(d) such other securities or instruments as the Required Lenders shall agree in writing;

and in respect of both (a) and (b) above, with a Rating Category of at least “A+” by S&P and “A” by Moody’s (or the equivalent used by another Rating Agency) in each case having maturities of not more than ninety (90) days from the date of acquisition;

“Change of Control” means:

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(a) in respect of a Guarantor, the occurrence of any act, event or circumstance that without prior written consent of all Lenders results in the Borrower owning directly or indirectly less than 100% of the issued and outstanding Equity Interests in such Guarantor; provided that any sale of a Guarantor shall be permitted subject to compliance with Clause 8.9; and

(b) in respect of the Borrower, means:

(i) a “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act as in effect on the Effective Date), other than any holders of the Borrower’s Equity Interests as of the Effective Date, becomes the ultimate “beneficial owner” (as defined in Rule 13d-3 and 13d-5 under the Exchange Act and including by reason of any change in the ultimate “beneficial ownership” of the Equity Interests of the Borrower) of more than 35% of the total voting power of the Voting Stock of the Borrower (calculated on a fully diluted basis); or

(ii) individuals who at the beginning of any period of two consecutive calendar years constituted the Board of Directors or equivalent governing body of the Borrower (together with any new directors (or equivalent) whose election by such Board of Directors or equivalent governing body or whose nomination for election was approved by a vote of at least two-thirds of the members of such Board of Directors or equivalent governing body then still in office who either were members of such Board of Directors or equivalent governing body at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute at least 35% of the members of such Board of Directors or equivalent governing body then in office;

“Charter” means, in relation to a Collateral Vessel, any time or consecutive voyage charter or other contract for the employment in respect of such Collateral Vessel, including, but not limited to, a contract of affreightment, for a term which exceeds, or which by virtue of any optional extensions may exceed, 12 months (other than any charter relating to the contribution of a Collateral Vessel to a pool);

“Charter Assignment” means, in relation to a Collateral Vessel, an assignment of the relevant Charter in the form set out in Appendix A;

“CISADA” means the United States Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010;

“Classification Society” means, in relation to a Collateral Vessel, American Bureau of Shipping, Det Norske Veritas, Lloyd's Register or such other vessel classification society that is a member of IACS that the Agent may approve from time to time;

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“Code” means the United States Internal Revenue Code of 1986, as amended, and the regulations promulgated and rulings issued thereunder;

“Collateral” means all property (including, without limitation, any proceeds thereof) referred to in the Finance Documents that is subject to any Security Interest in favor of the Security Trustee, for the benefit of the Lenders, securing the Secured Liabilities;

“Collateral Vessel” means each of the vessels identified as a proposed collateral vessel in Schedule 2 once such proposed collateral vessel becomes owned by a Guarantor and “Collateral Vessels” means any or all of the Collateral Vessels;

“Commission” or “SEC” means the United States Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act;

“Commitment” means, in relation to a Lender, the amount set forth opposite its name in Schedule 1-B, or, as the case may require, the amount specified in the relevant Transfer Certificate, as that amount may be reduced, cancelled or terminated in accordance with this Agreement (and “Total Commitments” means the aggregate of the Commitments of all the Lenders);

“Compliance Certificate” means a certificate executed by the Chief Financial Officer of the Borrower in the form set out in Appendix B;

“Consolidated EBITDA” means, for any accounting period, the consolidated net income of the Borrower for that accounting period:

(a) plus, to the extent deducted in computing the net income of the Borrower for that accounting period, the sum, without duplication, of:

(i) all federal, state, local and foreign income taxes and tax distributions;

(ii) Consolidated Net Interest Expense;

(iii) depreciation, depletion, amortization of intangibles, restricted stock, and other non-cash charges or non-cash losses (including non-cash transaction expenses and the amortization of debt discounts) and any extraordinary losses not incurred in the ordinary course of business;

(iv) expenses incurred in connection with a special or intermediate survey (including any underwater survey done in lieu thereof) of a Collateral Vessel during such period; and

(v) any dry-docking expenses;

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(b) minus, to the extent added in computing the consolidated net income of the Borrower for that accounting period, (i) any non-cash income or losses, non-cash gains or losses and (ii) any extraordinary gains or losses on asset sales not in the ordinary course of business;

“Consolidated Funded Debt” means, for any accounting period, the sum of the following for the Borrower determined (without duplication) on a consolidated basis for such period and in accordance with US GAAP consistently applied:

(a) all Financial Indebtedness; and

(b) all obligations to pay a specific purchase price for goods or services whether or not delivered or accepted (including take-or-pay and similar obligations which in accordance with US GAAP would be shown on the liability side of a balance sheet);

provided that balance sheet accruals for future dry-dock expenses shall not be classified as Consolidated Funded Debt;

“Consolidated Liquidity” means, on a consolidated basis at any time, the sum of (a) cash, (b) Cash Equivalents, in each case held by the Borrower on a freely available and unencumbered basis, and (c) Available Commitments; provided, however, that 66 2/3% of Consolidated Liquidity shall at all times consist of cash;

“Consolidated Net Interest Expense” means the aggregate of all interest, commissions, discounts and other costs, charges or expenses accruing that are due from the Borrower and all of its subsidiaries during the relevant accounting period less (i) commitment fees, (ii) interest income received and (iii) amortization of deferred charges and arrangement fees, determined on a consolidated basis in accordance with US GAAP and as shown in the consolidated statements of income for the Borrower;

“Consolidated Tangible Net Worth” means, on a consolidated basis, the total shareholders’ equity (including retained earnings) of the Borrower, minus goodwill;

“Consolidated Total Capitalization” means Consolidated Tangible Net Worth plus Consolidated Funded Debt;

“Contractual Currency” has the meaning given in Clause 22.4;

“Contribution” means, in relation to a Lender, the part of the Loan which is owing to that Lender;

“Creditor Party” means the Agent, the Lead Arranger, the Security Trustee or any Lender, whether as at the date of this Agreement or at any later time;

“Delivery Date” has the meaning given in Clause 9.2(b)(i);

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“Disbursement Authorization” has the meaning given in Clause 9.2(b)(ii);

“Dollars” and “$” means the lawful currency for the time being of the United States of America;

“Drawdown Date” means, in relation to an Advance, the date on which such Advance is actually made;

“Drawdown Notice” means a notice in the form set out in Schedule 3 (or in any other form which the Agent approves or reasonably requires);

“Earnings” means, in relation to a Collateral Vessel, all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Guarantor owning such Collateral Vessel or the Security Trustee and which arise out of the use or operation of that Collateral Vessel, including (but not limited to):

(a) except to the extent that they fall within paragraph (b):

(i) all freight, hire and passage moneys;

(ii) compensation payable to such Guarantor or the Security Trustee in the event of requisition of that Collateral Vessel for hire;

(iii) remuneration for salvage and towage services;

(iv) demurrage and detention moneys;

(v) damages for breach (or payments for variation or termination) of any charter party or other contract for the employment of that Collateral Vessel; and

(vi) all moneys which are at any time payable under Insurances in respect of loss of hire; and

(b) if and whenever that Collateral Vessel is employed on terms whereby any moneys falling within paragraphs (a)(i) to (vi) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to that Collateral Vessel together with any and all other distributions of moneys made by such pool or sharing entity to or for the account or benefit of that Collateral Vessel or the Guarantor owing such Collateral Vessel including, but not limited to, returns of working capital, deposit or retention moneys and any other moneys of any nature whatsoever that is retained by such pool or sharing entity for the account of such Collateral Vessel or such Guarantor that is the owner thereof;

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“Earnings Account” means (i) an account in the name of the Guarantor owning the relevant Collateral Vessel with the Account Bank designated as the “Earnings Account” for such Collateral Vessel or (ii) any other account which is designated by the Agent as an “Earnings Account” for the purpose of this Agreement;

“Earnings Account Pledge” means the pledge of each Earnings Account in such form as shall be required by the Security Trustee;

“Earnings Assignment” means with respect to any Collateral Vessel an assignment of the Earnings and Requisition Compensation of such Collateral Vessel, in the form set out in Appendix D;

“EDGAR” means the Electronic Data Gathering, Analysis, and Retrieval system maintained by the SEC;

“Effective Date” means the date on which this Agreement is executed and delivered by the parties hereto;

“Environmental Claim” means:

(a) any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or

(b) any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident,

and “claim” means a claim for damages, compensation, indemnification, contribution, fines, penalties or any other payment of any kind whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset;

“Environmental Incident” means:

(a) any release of Environmentally Sensitive Material from a Collateral Vessel; or

(b) any incident in which Environmentally Sensitive Material is released and which involves a collision or allision between a Collateral Vessel and another vessel or object, or some other incident of navigation or operation, in any case, in connection with which such Collateral Vessel is actually liable to be arrested, attached, detained or injuncted and/or such Collateral Vessel and/or the Guarantor owning such Collateral Vessel and/or any operator or manager of such Collateral Vessel is at fault or otherwise liable to any legal or administrative action; or

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(c) any other incident in which Environmentally Sensitive Material is released otherwise than from a Collateral Vessel and in connection with which such Collateral Vessel is actually or potentially liable to be arrested and/or where the Guarantor owning such Collateral Vessel and/or any operator or manager of such Collateral Vessel is at fault or otherwise liable to any legal or administrative action;

“Environmental Law” means any law or regulation relating to pollution or protection of the environment, to the carriage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material;

“Environmental Permit” means any permit, approval, identification number, license, exemption or other authorization required under any applicable Environmental Law;

“Environmentally Sensitive Material” means oil, oil products and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous;

“Equity Interests” of any person means:

(a) any and all shares and other equity interests (including common stock, preferred stock, limited liability company interests and partnership interests) in such person; and

(b) all rights to purchase, warrants or options or convertible debt (whether or not currently exercisable), participations or other equivalents of or interests in (however designated) such shares or other interests in such person;

“Equity Proceeds” means the net cash proceeds from the issuance of common or preferred stock of the Borrower (excluding the issuance of restricted stock);

“ERISA” means the United States Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated and rulings issued thereunder;

“ERISA Affiliate” means any affiliate or subsidiary that, together with the Borrower, would be deemed to be a single employer under Section 414 of the Code;

“ERISA Funding Event” means:

(a) any failure by any Plan to satisfy the minimum funding standards (for purposes of Section 412 of the Code or Section 302 of ERISA), whether or not waived;

(b) the filing pursuant to Section 412 of the Code or Section 303 of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan;

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(c) the failure by the Borrower or any ERISA Affiliate to make any required contribution to a Multiemployer Plan;

(d) a determination that any Plan is, or is expected to be, in “at risk” status (within the meaning of Section 430(i) of the Code);

(e) the incurrence by the Borrower or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or

(f) a determination that a Multiemployer Plan is, or is expected to be, in endangered status within the meaning of Section 432 of the Code or Section 305 of ERISA;

“ERISA Termination Event” means:

(a) the imposition of any lien in favor of the PBGC of any Plan or Multiemployer Plan;

(b) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Multiemployer Plan or to appoint a trustee to administer any Plan or Multiemployer Plan under Section 4042 of ERISA;

(c) the receipt by the Borrower or any ERISA Affiliate of any notice that a Multiemployer Plan is in critical status within the meaning of Section 432 of the Code or Section 305 of ERISA; or

(d) the filing of a notice of intent to terminate a Plan under Section 4041 of ERISA;

“Estate” has the meaning assigned such term in Clause 31.1(b)(ii);

“Event of Default” means any of the events or circumstances described in Clause 20.1;

“Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and any successor act thereto, and (unless the context otherwise requires) includes the rules and regulations of the Commission promulgated thereunder;

“Executive Order” means an executive order issued by the President of the United States of America;

“Fair Market Value” means, in relation to a Collateral Vessel, the market value of such Collateral Vessel at any date that is shown by the average of two (2) valuations each prepared for the Borrower and addressed to the Agent at the sole cost of the Borrower:

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(a) as at a date not more than 30 days prior to the date such valuation is delivered to the Agent;

(b) by Approved Brokers selected by the Borrower;

(c) with or without physical inspection of such Collateral Vessel (as the Agent may require); and

(d) on the basis of a sale for prompt delivery for cash on normal arm’s length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment (and with no value to be given to any pooling arrangements);

provided that (A) if a range of market values is provided in a particular appraisal, then the market value in such appraisal shall be deemed to be the mid-point within such range and (B) if an additional appraisal is obtained as provided in Clause 11.1(h), the market value of the Collateral Vessel shall be the average of the three appraisals obtained; and provided further that if consented to by the Borrower, the Agent shall have the option to have the market value of a Collateral Vessel determined by a single Approved Broker selected by the Required Lenders;

“FATCA” means Section 1471 through 1474 of the Code as of the date of this Agreement and any amended or successor version that is substantively comparable and not materially more onerous to comply with and any current or future Treasury regulations or other official administrative guidance (including any Revenue Ruling, Revenue Procedure, Notice or similar guidance issued by the Internal Revenue Service) promulgated thereunder or any intergovernmental agreement to implement FATCA;

“FATCA Deduction” means a deduction or withholding from a payment under any Finance Document required by or under FATCA;

“FATCAExempt Party” means a FATCA Relevant Party who is entitled under FATCA to receive payments free from any FATCA Deduction;

“FATCA Non-Exempt Lender” means any Lender who is a FATCA Non-Exempt Party;

“FATCA Non-Exempt Party” means a FATCA Relevant Party who is not a FATCA Exempt Party;

“FATCA Relevant Party” means each Creditor Party and each Security Party;

“Finance Documents” means:

(a) this Agreement;

(b) all Charter Assignments;

(c) all Account Pledges;

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(d) all Earnings Assignments;

(e) all Insurance Assignments;

(f) all Mortgages;

(g) the Note;

(h) the Shares Pledge and all Shares Pledge Supplements;

(i) each Guarantor Joinder Agreement; and

(j) any other document (whether creating a Security Interest or not) which is executed at any time by any person as security for, or to establish any form of subordination or priorities arrangement in relation to, any amount payable to the Lenders under this Agreement or any of the other documents referred to in this definition (other than a Manager’s Undertaking);

“Financial Indebtedness” means, with respect to any person (the “Debtor”) at any date of determination (without duplication):

(a) all obligations of the Debtor for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the Debtor;

(b) all obligations of the Debtor evidenced by bonds, debentures, notes or other similar instruments;

(c) all obligations of the Debtor in respect of any acceptance credit, guarantee or letter of credit facility or equivalent made available to the Debtor (including reimbursement obligations with respect thereto);

(d) all obligations of the Debtor to pay the deferred purchase price of property or services, which purchase price is due more than six months after the date of placing such property in service or taking delivery thereto or the completion of such services, except trade payables;

(e) all Capitalized Lease Obligations of the Debtor as lessee;

(f) all Financial Indebtedness of persons other than the Debtor secured by a Security Interest on any asset of the Debtor, whether or not such Financial Indebtedness is assumed by the Debtor, provided that the amount of such Financial Indebtedness shall be the lesser of (i) the fair market value of such asset at such date of determination and (ii) the amount of such Financial Indebtedness; and

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(g) all Financial Indebtedness of persons other than the Debtor under any guarantee, indemnity or similar obligation entered into by the Debtor to the extent such Financial Indebtedness is guaranteed, indemnified, etc. by the Debtor.

The amount of Financial Indebtedness of any Debtor at any date shall be the outstanding balance at such date of all unconditional obligations as described above and, with respect to contingent obligations described in (f) and (g) above, the maximum liability upon the occurrence of the contingency giving rise to the obligation, provided that (i) the amount outstanding at any time of any Financial Indebtedness issued with an original issue discount is the face amount of such Financial Indebtedness less the remaining unamortized portion of such original issue discount of such Financial Indebtedness at such time, and (ii) Financial Indebtedness shall not include any liability for taxes;

“First Repayment Date” has the meaning given in Clause 8.2;

“Fiscal Year” means, in relation to any person, each period of one (1) year commencing on January 1 of each year and ending on December 31 of such year in respect of which its accounts are or ought to be prepared;

“Foreign Pension Plan” means any plan, fund (including without limitation, any superannuation fund) or other similar program established or maintained outside the United States of America by the Borrower or any of the Guarantors or any one or more of their respective subsidiaries primarily for the benefit of employees of such Security Party or such subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and which plan is not subject to ERISA or the Code;

“Guaranteed Obligations” has the meaning given in Clause 16.1;

“Guarantor Joinder Agreement” means an agreement providing for the joinder of a person to this Agreement as a Guarantor in the form set out in Appendix E;

“IACS” means the International Association of Classification Societies;

“Insurances” means in relation to a Collateral Vessel:

(a) all policies and contracts of insurance, including entries of such Collateral Vessel in any protection and indemnity or war risks association, effected in respect of such Collateral Vessel, the Earnings or otherwise in relation to such Collateral Vessel; and

(b) all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium;

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“Insurance Assignment” means in relation to a Collateral Vessel, an Assignment of Insurances in the form set out in Appendix J;

“Interest Period” means a period determined in accordance with Clause 6;

“ISM Code” means the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organization, as the same may be amended or supplemented from time to time (and the terms “safety management system”, “Safety Management Certificate” and “Document of Compliance” have the same meanings as are given to them in the ISM Code);

“ISM Code Documentation” includes, in respect of a Collateral Vessel:

(a) the Document of Compliance and Safety Management Certificate issued pursuant to the ISM Code in relation to such Collateral Vessel within the periods specified by the ISM Code;

(b) all other documents and data which are relevant to the safety management system and its implementation and verification which the Agent may reasonably require; and

(c) any other documents which are prepared or which are otherwise relevant to establish and maintain such Collateral Vessel’s compliance or the compliance of the Guarantor owning such Collateral Vessel or the relevant Approved Manager with the ISM Code which the Agent may require;

“ISPS Code” means the International Ship and Port Facility Security Code as adopted by the International Maritime Organization, as the same may be amended or supplemented from time to time;

“ISPS Code Documentation” includes:

(a) the ISSC; and

(b) all other documents and data which are relevant to the ISPS Code and its implementation and verification which the Agent may require;

“ISSC” means a valid and current International Ship Security Certificate issued under the ISPS Code;

“Lending Office” means, with respect to any Lender, the office of such Lender specified as its “Lending Office” under its name on Schedule 1 or in the relevant Transfer Certificate pursuant to which it became a Lender, or such other office of such Lender as such Lender may from time to time specify to the Borrower and the Agent;

“LIBOR” means, in relation to any period for which an interest rate is to be determined under any provision of a Finance Document, the rate per annum equal to the offered quotation

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for deposits in Dollars for a period equal to, or as near as possible equal to, such period which appears on Reuters Page LIBOR01 at or about 11:00 a.m. (London time) on the Quotation Date for the relevant period (and, for the purposes of this Agreement, “Reuters Page LIBOR01” means the display designated as “Page LIBOR01” on the Reuters Service or such other page as may replace Page LIBOR01 on that service for the purpose of displaying rates comparable to that rate or such other service as may be nominated by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) as the information vendor for the purpose of displaying ICE Benchmark Administration Limited’s Interest Settlement Rates for Dollars in the London interbank market) and if LIBOR falls below zero, such rate is deemed to be zero;

“Loan” means the principal amount from time to time outstanding under this Agreement;

“Major Casualty” means, in relation to a Collateral Vessel, any casualty to such Collateral Vessel in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $2,500,000 or the equivalent in any other currency;

“Manager’s Undertaking” means, in relation to a Collateral Vessel, the letter executed and delivered by an Approved Manager party to an Approved Management Agreement with a Guarantor, in the form set out in Appendix G or any other manager’s undertaking required by the Security Trustee with respect to a sub-manager appointed by an Approved Manager that shall be substantially in the form set out in Appendix G with such changes as are reasonably required by the Security Trustee;

“Mandatory Cost” means the percentage rate per annum calculated by the Agent in accordance with Schedule 8;

“Margin” means 2.80% per annum;

“Margin Stock” has the meaning specified in Regulation U of the Board of Governors of the United States Federal Reserve System and any successor regulations thereto, as in effect from time to time;

“Material Adverse Effect” means the existence of one or more events and/or conditions that have had, or could reasonably be expected by the Lenders to have, (i) a material adverse effect on the business, operations, properties, assets, liabilities or condition (financial or otherwise) of the Borrower and/or the Guarantors taken as a whole, or (ii) a material adverse effect on the validity or enforceability of, or a material impairment of the rights, remedies or benefits available to any Creditor Party under any of the Finance Documents or (iii) a material adverse effect on the ability of any Security Party to perform any of its material obligations under any of the Finance Documents;

“Maturity Date” means for each Advance, the earlier of the sixth (6^th) anniversary of the Drawdown Date for such Advance and the date on which the Loan is accelerated pursuant to Clause 20.4;

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“Moody’s” means Moody’s Investors Service, Inc., a subsidiary of Moody’s Corporation, and its successors;

“Mortgage” means in relation to a Collateral Vessel, the first preferred or first priority ship mortgage on such Collateral Vessel, in Agreed Form; provided that a mortgage in respect of a Collateral Vessel registered under the Marshall Islands flag shall be in the form set out in Appendix F;

“Multiemployer Plan” means, at any time, a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate has any liability or obligation to contribute or has within any of the six preceding plan years had any liability or obligation to contribute;

“Net Debt” means Financial Indebtedness less cash and Cash Equivalents;

“Non-indemnified Tax” means (a) any tax on the net income of a Creditor Party (but not a tax on gross income or individual items of income), whether collected by deduction or withholding or otherwise, which is levied by a taxing jurisdiction which:

(i) is located in the country under whose laws such entity is formed (or in the case of a natural person is a country of which such person is a citizen); or

(ii) with respect to any Lender, is located in the country of its Lending Office; or

(iii) with respect to any Creditor Party other than a Lender, is located in the country from which such party has originated its participation in this transaction; or

(b)    any FATCA Deduction made on account of a payment to a FATCA Non-Exempt Party;

“Note” means a promissory note of the Borrower, payable to the order of the Agent, evidencing the aggregate indebtedness of the Borrower under this Agreement, in the form set out in Appendix H;

“Notifying Lender” has the meaning given in Clause 24.1 or Clause 25.1 as the context requires;

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury;

“Parallel Debt” has the meaning given in Clause 31.11(a);

“pari passu”, when used with respect to the ranking of any Financial Indebtedness of any person in relation to other Financial Indebtedness of such person, means that each such Financial Indebtedness:

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(a) either (i) is not subordinated in right of payment to any other Financial Indebtedness of such person or (ii) is subordinate in right of payment to the same Financial Indebtedness of such person as is the other and is so subordinate to the same extent; and

(b) is not subordinate in right of payment to the other or to any Financial Indebtedness of such person as to which the other is not so subordinate;

“PATRIOT Act” means the United States Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Improvement and Reauthorization Act of 2005 (H.R. 3199);

“Payment Currency” has the meaning given in Clause 22.4;

“PBGC” means the Pension Benefit Guarantee Corporation and its successors;

“Permitted Security Interests” means:

(a) Security Interests created by the Finance Documents;

(b) pledges of certificates of deposit or other cash collateral securing any Guarantor’s reimbursement obligations in connection with letters of credit now or hereafter issued for the account of such Guarantor in connection with the establishment of the financial responsibility of such Guarantor under 33 C.F.R. Part 130 or 46 C.F.R. Part 540, as the case may be, as the same may be amended or replaced;

(c) Security Interests to secure obligations under workmen’s compensation laws or similar legislation, deposits to secure public or statutory obligations, warehousemen’s or other like liens, or deposits to obtain the release of such liens and deposits to secure surety, appeal or customs bonds on which any of the Guarantors is the principal, as to all of the foregoing, only to the extent arising and continuing in the ordinary course of business;

(d) Security Interests for loss, damage or expense which are fully covered by insurance, subject to applicable deductibles;

(e) Security Interests for unpaid master’s and crew’s wages in accordance with usual maritime practice that are not more than thirty (30) days past due;

(f) Security Interests for salvage;

(g) Security Interests arising by operation of law for not more than two (2) months’ prepaid hire under any charter or other contract of employment in

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relation to a Collateral Vessel not otherwise prohibited by this Agreement or any other Finance Document;

(h) Security Interests for master’s disbursements incurred in the ordinary course of trading of a Collateral Vessel and any other Security Interests arising by operation of law or otherwise in the ordinary course of such Collateral Vessel’s business, provided such Security Interests do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the relevant Guarantor in good faith by appropriate steps) and subject, in the case of Security Interests for repair or maintenance, to Clause 14.13(h);

(i) any Security Interest created in favor of a plaintiff or defendant in any proceedings or arbitration as security for costs and expenses where the relevant Guarantor is actively prosecuting or defending such proceedings or arbitration in good faith and such Security Interest does not (and is not likely to) result in any sale, forfeiture or loss of the relevant Collateral Vessel;

(j) Security Interests arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made; and

(k) Security Interests incidental to the conduct of the business of each Security Party or the ownership of such Security Party’s property and assets, which Security Interests do not in the aggregate materially detract from the value of each such Security Party’s property or assets or materially impair the use thereof in the operation of its business;

“Pertinent Document” means:

(a) any Finance Document;

(b) any policy or contract of insurance contemplated by or referred to in Clause 13 or any other provision of this Agreement or another Finance Document;

(c) any other document contemplated by or referred to in any Finance Document; and

(d) any document which has been or is at any time sent by or to a Servicing Bank in contemplation of or in connection with any Finance Document or any policy, contract or document falling within paragraphs (b) or (c);

“Pertinent Jurisdiction”, in relation to a company, means:

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(a) the jurisdiction under the laws of which the company is incorporated or formed;

(b) a jurisdiction in which the company has the center of its main interests or in which the company’s central management and control is or has recently been exercised;

(c) a jurisdiction in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;

(d) a jurisdiction in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a branch or permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; or

(e) a jurisdiction the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company whether as a main or territorial or ancillary proceedings or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (a) or (b) above;

“Pertinent Matter” means:

(a) any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or

(b) any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a),

and covers any such transaction, matter or statement, whether entered into, arising or made at any time before the signing of this Agreement or on or at any time after that signing;

“Plan” means any employee benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect to which a Security Party or ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA;

“Principal Obligations” mean, in relation to the Borrower or a Guarantor all monetary obligations (other than its Parallel Debt) which now or at any time hereafter may be or become due, owing or incurred by the Borrower or such Guarantor to any Creditor Party, whether due or not, whether contingent or not and whether alone or jointly with others, as principal, surety or otherwise, under or in connection with or pursuant to the Finance Documents, as such obligations may be extended, restated, prolonged, amended, renewed or novated from time to time;

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“Quarterly Payment Date” means March 15^th, June 15^th, September 15^th and December 15^th of each year during the term of the Loan;

“Quotation Date” means, in relation to any period for which an interest rate is to be determined under any provision of a Finance Document, the day which is two (2) Business Days before the first day of that period, unless market practice differs in the London interbank market for a currency, in which case the Quotation Date will be determined by the Agent in accordance with market practice in the London interbank market (and if quotations would normally be given by leading banks in the London interbank market on more than one day, the Quotation Date will be the last of those days);

“Rating Agencies” means:

(a) S&P and Moody’s; or

(b) if S&P or Moody’s or both of them are not making ratings of securities publicly available, a nationally recognized United States rating agency or agencies, as the case may be, selected by the Agent with the consent of the Required Lenders, which will be substituted for S&P or Moody’s or both, as the case may be;

“Rating Category” means:

(a) with respect to S&P, any of the following categories (any of which may include a “+” or “-”): AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent successor categories);

(b) with respect to Moody’s, any of the following categories: Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent successor categories); and

(c) the equivalent of any such categories of S&P or Moody’s used by another Rating Agency, if applicable;

“Reference Bank” means the Agent;

“Registry” means in respect of a Collateral Vessel, such registrar, commissioner or representative of the relevant Approved Flag who is duly authorized to register such Collateral Vessel, the relevant Guarantor’s title to such Collateral Vessel and the relevant Mortgage over such Collateral Vessel under the laws of such Approved Flag;

“Repayment Date” means a date on which a repayment is required to be made under Clause 8;

“Required Lenders” means: (a) before the Loan has been made, Lenders whose Commitments total 66 2/3% or more of the Total Commitments; and (b) after the Loan has been made, Lenders whose Contributions total 66 2/3% or more of the Loan;

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“Requisition Compensation” includes all compensation or other moneys payable by reason of any act or event such as is referred to in paragraph (b) of the definition of “Total Loss”;

“Restricted Party” means a person that is: (a) listed on, owned or controlled by a person listed on any Sanctions List; (b) located in, incorporated under the laws of, or owned or controlled by, or acting on behalf of, a person located in or organized under the laws of a country or territory which is a subject of country or territory-wide Sanctions; or (c) otherwise a target of Sanctions;

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies Inc., and its successors;

“Sanctions” means any trade, economic or financial sanctions, laws, regulations, embargoes or restrictive measures (a) enacted, enforced or imposed by the United States Government (including CISADA), the United Nations Security Council, the European Union or its Member States (including, without limitation, the United Kingdom and France), or the respective governmental institutions and agencies of any of the foregoing, including without limitation; OFAC, the United States Department of State, and Her Majesty’s Treasury (“HMT”) (together, the “Sanctions Authorities”); (b) imposed by the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (as amended through the date hereof and as may be amended in the future); or (c) otherwise imposed by any law or regulation binding on a Security Party;

“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 and made public by the United Nations Security Council or any of the Sanctions Authorities;

“SCM” means Scorpio Commercial Management S.A.M., a Monaco company, an Approved Commercial Manager of the Collateral Vessels;

“Secured Liabilities” means all liabilities which the Security Parties or any of them have, at the date of this Agreement or at any later time or times, under or in connection with any Finance Document or any judgment relating to any Finance Documents and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country;

“Security Interest” means:

(a) a mortgage, encumbrance, charge (whether fixed or floating) or pledge, any maritime or other lien or privilege or any other security interest of any kind;

(b) the security rights of a plaintiff under an action in rem; and

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(c) any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution;

“Security Maintenance Cover Ratio” has the meaning given in Clause 15.2;

“Security Party” means each of the Borrower, each of the Guarantors and any other person (except a Creditor Party and an Approved Manager) who, as a surety, guarantor, mortgagor, assignor or pledgor, as a party to any subordination or priorities arrangement, or in any similar capacity, executes a Finance Document;

“Security Period” means the period commencing on the Effective Date and ending on the date on which the Agent notifies the Borrower (such notice not to be unreasonably withheld or delayed) that:

(a) all amounts which have become due for payment by the Borrower or any other Security Party under the Finance Documents have been paid in full;

(b) no amount is owing or has accrued (without yet having become due for payment) under any Finance Document; and

(c) neither the Borrower nor any other Security Party has any liability under Clause 21, 22 or 23 or any other provision of this Agreement or another Finance Document;

“Servicing Bank” means the Agent or the Security Trustee;

“Shares Pledge” means a pledge by the Borrower of the Equity Interests of each of the Guarantors, in the form set out in Appendix I and includes any and all Shares Pledge Supplements;

“Shares Pledge Supplement” means any supplement to the Shares Pledge in the form set out in Appendix K that is executed and delivered by the Borrower with respect to the Equity Interest of any Guarantor that becomes a party to this Agreement through the execution and delivery to the Agent of a Guarantor Joinder Agreement after the Effective Date;

“SSM” means Scorpio Ship Management S.A.M., a Monaco company, an Approved Technical Manager of the Collateral Vessels;

“Total Loss” means in relation to a Collateral Vessel:

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

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(b) any expropriation, confiscation, requisition or acquisition of such Collateral Vessel, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority (excluding a requisition for hire for a fixed period not exceeding one (1) year without any right to an extension), unless it is within three (3) months redelivered to the full control of the Guarantor that is the owner thereof; or

(c) any arrest, capture, seizure or detention of such Collateral Vessel (including any hijacking or theft) unless it is within three (3) months redelivered to the full control of the Guarantor that is the owner thereof;

“Total Loss Date” means in relation to a Collateral Vessel:

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

(b) in the case of a constructive, compromised, agreed or arranged total loss of such Collateral Vessel, the earliest of:

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

(ii) the date of any compromise, arrangement or agreement made by or on behalf of the Guarantor owning such Collateral Vessel with such Collateral Vessel’s insurers in which the insurers agree to treat such Collateral Vessel as a total loss; and

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

“Transfer Certificate” has the meaning given in Clause 27.2;

“Transferee Lender” has the meaning given in Clause 27.2;

“Transferor Lender” has the meaning given in Clause 27.2;

“UCC” means the Uniform Commercial Code of the State of New York;

“US GAAP” means generally accepted accounting principles in the United States of America as in effect from time to time;

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“Voting Stock” of any person as of any date means the Equity Interests of such person that are at the time entitled to vote in the election of the board of directors or similar governing body of such person; and

“Withholding” has the meaning given in Clause 23.5.

1.2 Construction of certain terms. In this Agreement:

“approved” means, for the purposes of Clause 13, approved in writing by the Agent;

“asset” includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment;

“company” includes any corporation, limited liability company, partnership, joint venture, unincorporated association, joint stock company and trust;

“consent” includes an authorization, consent, approval, resolution, license, exemption, filing, registration, notarization and legalization;

“contingent liability” means a liability which is not certain to arise and/or the amount of which remains unascertained;

“continuing” means with respect to an Event of Default that it has not been (i) waived; or (ii) cured during the applicable grace period;

“document” includes a deed; also a letter, email or fax;

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

“expense” means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value added or other tax;

“law” includes any order or decree, any form of delegated legislation, any treaty or international convention and any statute, regulation or resolution of the United States of America, any state thereof, the Council of the European Union, the European Commission, the United Nations or its Security Council or any other Pertinent Jurisdiction;

“legal or administrative action” means any legal proceeding or arbitration and any administrative or regulatory action or investigation;

“liability” includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or otherwise;

“months” shall be construed in accordance with Clause 1.3;

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“obligatory insurances” means, in relation to a Collateral Vessel, all insurances effected, or which the Guarantor owning such Collateral Vessel is obliged to effect, under Clause 13 or any other provision of this Agreement or another Finance Document;

“parent company” has the meaning given in Clause 1.4;

“person” includes natural persons; any company; any state, political sub-division of a state and local or municipal authority; and any international organization;

“policy”, in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;

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

“regulation” includes any regulation, rule, official directive, request or guideline whether or not having the force of law, of any governmental body, intergovernmental or supranational agency, department or regulatory, self-regulatory or other authority or organization;

“subsidiary” has the meaning given in Clause 1.4;

“successor” includes any person who is entitled (by assignment, novation, merger or otherwise) to any other person’s rights under this Agreement or any other Finance Document (or any interest in those rights) or who, as administrator, liquidator or otherwise, is entitled to exercise those rights; and in particular references to a successor include a person to whom those rights (or any interest in those rights) are transferred or pass as a result of a merger, division, reconstruction or other reorganization of it or any other person;

“tax” includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any political sub-division of a state or any local or municipal authority or any other governmental authority authorized to levy such tax (including any such imposed in connection with exchange controls), and any related penalties, interest or fines; and

“war risks” includes the risk of mines and all risks excluded by clause 29 of the Institute Hull Clauses (1/11/02 or 1/11/03) or clause 24 of the Institute Time clauses (Hulls) (1/11/1995) or clause 23 of the Institute Time Clauses (Hulls) (1/10/83).

1.3 Meaning of “month”. A period of one or more “months” ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started (“the numerically corresponding day”), but:

(a) on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later

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Business Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or

(b) on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day,

and “month” and “monthly” shall be construed accordingly.

1.4 Meaning of “subsidiary”. A company (S) is a subsidiary of another company (P) if:

(a) a majority of the issued Equity Interests in S (or a majority of the issued Equity Interests in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or

(b) P has direct or indirect control over a majority of the voting rights attaching to the issued Equity Interests of S; or

(c) P has the direct or indirect power to appoint or remove a majority of the directors (or equivalent) of S; or

(d) P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P;

and any company of which S is a subsidiary is a parent company of S.

1.5 General interpretation. In this Agreement:

(a) references to, or to a provision of, a Finance Document or any other document are references to it as amended, supplemented and/or restated, whether before the date of this Agreement or otherwise;

(b) references in Clause 1.1 to a document being in the form of a particular Appendix include references to that form with any modifications to that form which the Agent approves or reasonably requires and which are acceptable to the Borrower;

(c) references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Agreement or otherwise;

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

(e) Clauses 1.1 to 1.5 apply unless the contrary intention appears.

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1.6 Headings. In interpreting a Finance Document or any provision of a Finance Document, all clause, sub-clause and other headings in that and any other Finance Document shall be entirely disregarded.

1.7 Accounting Terms. Unless otherwise specified herein, all accounting terms used in this Agreement and in the other Finance Documents shall be interpreted, and all financial statements and certificates and reports as to financial matters required to be delivered to any Creditor Party under this Agreement shall be prepared, in accordance with US GAAP.

1.8 Inferences Regarding Materiality. To the extent that any representation, warranty, covenant or other undertaking of a Security Party in this Agreement or any other Finance Document is qualified by reference to those matters which are not reasonably expected to result in a Material Adverse Effect or language of similar import, no inference shall be drawn therefrom that any Creditor Party has knowledge or approves of any noncompliance by such Security Party with any law or regulation.

2. FACILITY

2.1 Amount of Facility. Subject to the other provisions of this Agreement, the Lenders severally agree to make available to the Borrower a credit facility in the principal amount of up to $42,000,000 in up to two (2) Advances, one in respect of each Collateral Vessel. The amount of each Advance shall not exceed the lesser of (a) $21,000,000 or (b) sixty percent (60%) of the Fair Market Value of the relevant Collateral Vessel determined no earlier than thirty (30) days prior to the Drawdown Date for the relevant Advance. The aggregate amount of all Advances shall not exceed $42,000,000 or such lesser amount as provided in this Agreement.

2.2 Lenders’ participations in Advance. Subject to the other provisions of this Agreement, each Lender shall participate in an Advance in the proportion which its Commitment bears to the Total Commitments.

2.3 Purpose of Advance. The Borrower undertakes with each Creditor Party to use each Advance only to (a) finance or (b) reimburse the Borrower for part of the acquisition cost of the Collateral Vessel to which such Advance relates. No Creditor Party shall have any responsibility for the application of any Advance by the Borrower.

2.4 Reduction and Cancellation of Total Commitments.

(a) Upon not less than fifteen (15) Business Days written notice to the Agent, the Borrower may, without premium or penalty, irrevocably reduce any unused Commitment in whole or in part.

(b) Any portion of the Total Commitments not disbursed to the Borrower shall be cancelled and terminated automatically on the expiration of the Availability Period.

(c) Any partial cancellation shall be applied against Commitments of each Lender pro rata to reduce future scheduled repayments and the

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commitment fee referred to in Clause 21.1(b) on such cancelled portion of the Commitments shall cease to accrue.

3. POSITION OF THE LENDERS

3.1 Interests Several. The rights of the Lenders under this Agreement are several.

3.2 Individual Right of Action. Each Lender shall be entitled to sue for any amount which has become due and payable by a Security Party to it under this Agreement without joining the Agent, the Security Trustee or any other Lender as additional parties in the proceedings.

3.3 Proceedings Requiring Required Lender Consent. Except as provided in Clause 3.2, no Lender may commence proceedings against any Security Party in connection with a Finance Document without the prior consent of the Required Lenders.

3.4 Obligations Several. The obligations of the Lenders under this Agreement are several; and a failure of a Lender to perform its obligations under this Agreement shall not result in:

(a) the obligations of the other Lenders being increased; nor

(b) the Borrower, any other Security Party or any other Lender being discharged (in whole or in part) from its obligations under any Finance Document,

and in no circumstances shall a Lender have any responsibility for a failure of another Lender to perform its obligations under this Agreement.

3.5 Replacement of a Lender.

(a) If at any time during the term of the Loan when there are two or more Lenders:

(i) any Lender becomes a Non-Consenting Lender (as defined in paragraph (c) below);

(ii) the Borrower or any other Security Party becomes obliged in the absence of an Event of Default to repay any amount in accordance with Clause 24 or to pay additional amounts pursuant to Clause 23 or Clause 25 to any Lender in excess of amounts payable to other Lenders generally; or

(iii) any Lender fails to make its portion of an Advance available pursuant to the terms of Clause 2.2,

then the Borrower may, on 30 Business Days’ prior written notice to the Agent and such Lender, replace such Lender by requiring such Lender to (and such Lender shall) transfer pursuant to Clause 27 on the last day of an Interest Period all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank or financial institution (a “Replacement Lender”) selected by the Borrower, which is acceptable to the Agent, which confirms its willingness to assume and by its execution of a Transfer Certificate does assume all the obligations of the transferring Lender (including the assumption of the transferring Lender’s participations on the same basis as the transferring Lender) for a purchase price in cash payable at the time of transfer equal to the outstanding principal amount of such Lender’s participation in the outstanding Advances and all accrued interest and/or other quantifiable customary and actual breakage costs, for which reasonable evidence of calculation has been provided to the Borrower, and amounts payable in relation thereto under the Finance Documents.

(b) The replacement of a Lender pursuant to this Clause 3.5 shall be subject to the following conditions:

(i) the Borrower shall have no right to replace the Agent or the Security Trustee in such capacities;

(ii) neither the Agent nor any Lender shall have any obligation to the Borrower to find a Replacement Lender but nothing contained herein shall preclude them from doing so;

(iii) in the event of a replacement of a Non-Consenting Lender such replacement must take place no later than 30 Business Days after the date the Borrower notifies the Non-Consenting Lender and the Agent of its intent to replace the Non-Consenting Lender pursuant to Clause 3.5(a); and

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

(c) For purposes of this Clause 3.5, in the event that:

(i) the Borrower or the Agent has requested the Lenders to give a consent in relation to or to agree to a waiver or amendment of any provisions of the Finance Documents;

(ii) the consent, waiver or amendment in question requires the approval of all Lenders; and

(iii) Lenders whose Commitments aggregate more than 50.00% percent of the Total Commitments have consented to or agreed to such waiver or amendment,

then any Lender who does not and continues not to consent or agree to such waiver or amendment shall be deemed a “Non-Consenting Lender”.

4. DRAWDOWN

4.1 Request for Advance. Subject to the following conditions, the Borrower may request an Advance to be made by delivering to the Agent a completed Drawdown Notice for such Advance not later than 11:00 a.m. (Hamburg time) three (3) Business Days prior to the intended Drawdown Date for such Advance.

4.2 Availability. The conditions referred to in Clause 4.1 are that:

(f) the Drawdown Date must be a Business Day during the Availability Period;

(g) the owner of the Collateral Vessel to which the Advance relates shall be a Guarantor under this Agreement or the Borrower shall have caused such owner to deliver to the Agent a duly completed Guarantor Joinder Agreement on or before delivery of the Drawdown Notice;

(h) there shall be no more than one Advance in respect of a Collateral Vessel;

(i) the amount of the requested Advance shall not exceed the lesser of (i) $21,000,000 or (ii) sixty percent (60%) of the Fair Market Value of the

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Collateral Vessel determined no earlier than thirty (30) days prior to the Drawdown Date for such Advance; and

(j) the applicable conditions precedent stated in Clause 9 hereof shall have been satisfied or waived as provided therein.

4.3 Notification to Lenders of Receipt of a Drawdown Notice. The Agent shall promptly notify the Lenders that it has received a Drawdown Notice and shall inform each Lender of:

(c) the amount of the Advance and the Drawdown Date;

(d) the amount of that Lender’s participation in the Advance; and

(e) the duration of the first Interest Period.

4.4 Drawdown Notice Irrevocable. A Drawdown Notice must be signed by an officer or a duly authorized attorney-in-fact of the Borrower and once served, a Drawdown Notice cannot be revoked without the prior consent of the Agent, acting on the authority of the Required Lenders.

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4.5 Lenders to Make Available Contributions. Subject to the provisions of this Agreement, each Lender shall, before 10:00 a.m. (Hamburg time) on and with value on the Drawdown Date, make available to the Agent for the account of the Borrower the amount due from that Lender under Clause 2.2.

4.6 Disbursement of Advance. Subject to the provisions of this Agreement, the Agent shall on the Drawdown Date pay to the Borrower the amounts which the Agent receives from the Lenders under Clause 4.5 and that payment to the Borrower shall be made:

(a) to the account which the Borrower specifies in the Drawdown Notice; and

(b) in the like funds as the Agent received the payments from the Lenders.

4.7 Disbursement of Advance to Third Party. The payment by the Agent under Clause 4.6 to the account of a third party designated by the Borrower in a Drawdown Notice shall constitute the making of the Advance and the Borrower shall at that time become indebted, as principal and direct obligor, to each Lender in an amount equal to that Lender’s Contribution.

4.8 Promissory Note.

(a) The obligation of the Borrower to pay the principal of, and interest on, the Loan shall be evidenced by the Note, which shall be dated the Effective Date.

(b) Each Advance made by the Lenders to the Borrower may be evidenced by a notation of the same made by the Agent on the grid attached to the Note, which notation, absent manifest error, shall be prima facie evidence of the amount of the relevant Advance.

(c) Each Lender shall record on its internal records the amount of its participation in the relevant Advance and each payment in respect thereof, and the unpaid balance of such participation in such Advance shall, absent manifest error and to the extent not inconsistent with the notations made by the Agent on the grid attached to the Note, be as so recorded.

(d) The failure of the Agent or any Lender to make any such notation shall not affect the obligation of the Borrower in respect of any Advance or the Loan nor affect the validity of any transfer by the Agent of the Note.

(e) On receipt of satisfactory evidence that the Note has been lost, mutilated or destroyed and on surrender of the remnants thereof, if any, the Borrower shall promptly replace the Note, without charge to the Creditor Parties, with a similar Note. If such replacement Note replaces a lost Note it shall bear an endorsement to that effect. Any lost Note subsequently

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found shall be surrendered to the Borrower and cancelled. The Agent shall indemnify the Borrower from any losses, claims or damages resulting from the loss of such Note.

5. INTEREST

5.1 Normal Rate of Interest. Subject to the provisions of this Agreement, the rate of interest on each Advance of the Loan in respect of an Interest Period shall be the percentage rate per annum which is the aggregate of the Margin, LIBOR and Mandatory Costs, if any, for that Interest Period.

5.2 Payment of Normal Interest. Subject to the provisions of this Agreement, interest on the Loan in respect of each Interest Period shall be paid by the Borrower on the last day of that Interest Period.

5.3 Payment of Accrued Interest. In the case of an Interest Period longer than three (3) months, accrued interest shall be paid every three (3) months during that Interest Period and on the last day of that Interest Period.

5.4 Notification of Interest Periods and Rates of Normal Interest. The Agent shall notify the Borrower and each Lender of:

(a) each rate of interest; and

(b) the duration of each Interest Period (as determined under Clause 6.2), as soon as reasonably practicable after each is determined (but in all cases, not later than three (3) Business Days before the start of each Interest Period.

5.5 Notice of Prepayment. If the Borrower does not agree with an interest rate notified by the Agent under Clause 5.4, the Borrower may give the Agent not less than ten (10) Business Days’ notice of its intention to prepay (without premium or penalty) the Loan at the end of the interest period set by the Agent.

5.6 Prepayment; Termination of Commitments. A notice under Clause 5.5 shall be irrevocable; the Agent shall promptly notify the Lenders of the Borrower’s notice of intended prepayment and:

(a) on the date on which the Agent serves that notice, the Total Commitments shall be cancelled; and

(b) the Borrower shall prepay (without premium or penalty) the Loan, together with accrued interest thereon plus any sums payable pursuant to Clause 22.1(b) at the end of the Interest Period set by the Agent.

5.7 Application of Prepayment. The provisions of Clause 8 shall apply in relation to the prepayment.

5.8 Market Disruption.

(a) If with respect to any Interest Period the Agent determines that LIBOR is not available for such Interest Period, the Agent shall promptly notify the Borrower and each of the Lenders stating the circumstances falling within this Clause 5.8(a) which have caused its notice to be given and shall provide the Borrower with reasonably available details in connection with such circumstances;

(b) After the Agent’s notice under clause 5.8(a) is served the Borrower, the Agent or the Lenders shall use reasonable commercial efforts in good faith and fair dealing, to agree, within the thirty (30) days after the date on which the Agent serves its notice under clause 5.8(a) (the “Negotiation Period”), an alternative interest rate or (as the case may be) an alternative basis for the Lenders to fund or continue to fund their or its Contribution during the Interest Period concerned.

(c) Any alternative interest rate or an alternative basis which is agreed during the Negotiation Period shall take effect in accordance with the terms agreed.

(d) If an alternative interest rate or alternative basis is not agreed within the Negotiation Period, and the relevant circumstances are continuing at the end of the Negotiation Period, then the Agent shall, with the agreement of each Lender for each one month period, set an interest rate representing the actual cost of funding of the Lenders in Dollars of their or its Contribution plus the Margin and Mandatory Costs (if any). Such alternative pricing agreed upon pursuant to this Clause 5.8(d) shall be binding on all parties hereto. The procedure provided for by this Clause 5.8 shall be repeated if the relevant circumstances are continuing at the end of each one month period.

(e) If the Borrower does not agree with the interest rate set by the Agent under this Clause 5.8, the Borrower may give the Agent not less than seven (7) Business Days’ notice of its intention to prepay the Loan.

(f) A notice by the Borrower under Clause 5.8(e) shall be irrevocable; the Agent shall promptly notify the Lenders of the Borrower’s notice of intended prepayment; and

(i) on the date on which the Agent serves the notice, the Total Commitments shall be cancelled; and

(ii) the Borrower shall prepay (without premium or penalty) the Loan together with accrued interest thereon plus any sums payable pursuant to Clause 22.1(b) on the last Business Day of the Interest Period set by the Agent.

6. INTEREST PERIODS

6.1 Commencement of Interest Periods. The first Interest Period applicable to an Advance shall commence on the Drawdown Date of such Advance and shall end on the First Repayment Date for such Advance. Each subsequent Interest Period for such Advance shall commence on the expiry of the preceding Interest Period.

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6.2 Duration of Normal Interest Periods. Subject to Clauses 6.3 and 6.4, except with respect to the first Interest Period of each Advance provided for in Clause 6.1, each Interest Period shall be:

(d) three (3) months; or

(e) such other period as the Agent may, with the authorization of all Lenders, agree with the Borrower; and

(f) on the date of expiry of the preceding Interest Period, all previous Advances not previously consolidated shall be consolidated for the purpose of setting future Interest Periods.

6.3 Duration of Interest Periods for Repayment Installments. In respect of an amount due to be repaid under Clause 8 on a particular Repayment Date, an Interest Period shall end on that Repayment Date.

6.4 Non-availability of Matching Deposits for Interest Period Selected. If, after the Borrower has selected and the Lenders have agreed an Interest Period longer than three (3) months, any Lender notifies the Agent by 11:00 a.m. (Hamburg time) on the Business Day following the Business Day on which the Agent provided notification pursuant to Clause 5.4 that it is not satisfied that deposits in Dollars for a period equal to the Interest Period will be available to it in the London interbank market when the Interest Period commences, the Interest Period shall be three (3) months.

7. DEFAULT INTEREST

7.1 Payment of Default Interest on Overdue Amounts. A Security Party shall pay interest in accordance with the following provisions of this Clause 7 on any amount payable by such Security Party under any Finance Document which the Agent, the Security Trustee or any other designated payee does not receive on or before the relevant date, that is:

(g) the date on which the Finance Documents provide that such amount is due for payment; or

(h) if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or

(i) if such amount has become immediately due and payable under Clause 20.4, the date on which it became immediately due and payable.

7.2 Default Rate of Interest. Interest shall accrue on an overdue amount from (and including) the relevant date until the date of actual payment (as well after as before judgment) at the rate per annum determined by the Agent to be two percent (2%) above:

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(c) in the case of an overdue amount of principal, the higher of the rates set out at Clauses 7.3(a) and (b); or

(d) in the case of any other overdue amount, the rate set out at Clause 7.3(b).

7.3 Calculation of default rate of interest. The rates referred to in Clause 7.2 are:

(c) the rate applicable to the overdue principal amount immediately prior to the relevant date (but only for any unexpired part of any then current Interest Period); and

(d) the Margin plus, in respect of successive periods of any duration (including at call) up to three (3) months which the Agent may, with the consent of the Required Lenders, select from time to time:

(i) LIBOR; or

(ii) if the Agent determines that Dollar deposits for any such period are not being made available by leading banks in the London interbank market in the ordinary course of business, a rate from time to time determined by the Agent by reference to the actual cost of funds to the Lenders from such other sources as the Agent may from time to time reasonably determine.

7.4 Notification of Interest Periods and Default Rates. The Agent shall promptly notify the Lenders and each relevant Security Party of each interest rate determined by the Agent under Clause 7.3 and of each period selected by the Agent for the purposes of paragraph (b) of that Clause; but this shall not be taken to imply that such Security Party is liable to pay such interest only with effect from the date of the Agent’s notification.

7.5 Payment of Accrued Default Interest. Subject to the other provisions of this Agreement, any interest due under this Clause shall be paid on the last day of the period by reference to which it was determined; and the payment shall be made to the Agent for the account of the Creditor Party to which the overdue amount is due.

8. REPAYMENT AND PREPAYMENT

8.1 Amount of Repayment Installments. Subject to the provisions of Clause 8.9, the Borrower shall repay each Advance of the Loan by consecutive quarterly installments equal to 1/59.2^th (one fifty ninth point two) of the original amount of such Advance, together with a balloon payment in the amount of the outstanding principal balance of such Advance (the “Balloon Installment”) payable concurrently with the last repayment installment on the Maturity Date.

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8.2 Repayment Dates. The first repayment installment for an Advance shall be paid on the Quarterly Payment Date immediately following the Drawdown Date of such Advance (in relation to each Advance, a “First Repayment Date”). Each subsequent installment for such Advance shall be paid on each subsequent Quarterly Payment Date, and the last installment together with the Balloon Installment shall be paid on the Maturity Date for such Advance all as set forth in Schedule 7.

8.3 Maturity Date. On the Maturity Date for an Advance, the Borrower shall additionally pay to the Agent for the account of the Creditor Parties all other sums then accrued or owing under any Finance Document with respect to such Advance and on the Maturity Date for the last Advance to be repaid, the Borrower shall additionally pay to the Agent for the account of the Creditor Parties all other sums then accrued or owing under any Finance Document.

8.4 Voluntary Prepayment. Subject to the following conditions, the Borrower may prepay the whole or any part of an Advance of the Loan at any time without premium or penalty, provided that in the event that such prepayment occurs at any time other than on the last day of an Interest Period applicable thereto, it will be subject to payment by the Borrower of breakage costs.

8.5 Conditions for Voluntary Prepayment. The conditions referred to in Clause 8.4 are that:

(g) a partial prepayment shall be at least equal to the Base Prepayment Amount or such higher amount which shall be equal to the Base Prepayment Amount plus an integral multiple of $1,000,000 (or such lesser amount acceptable to the Agent);

(h) the Agent has received from the Borrower at least fifteen (15) Business Days’ prior written notice specifying the amount to be prepaid for such Advance and the date on which the prepayment is to be made; and

(i) the Borrower has complied with Clause 8.12 on or prior to the date of prepayment.

8.6 Effect of Notice of Prepayment. A prepayment notice may not be withdrawn or amended without the consent of the Agent, given with the authorization of the Required Lenders, and the amount specified in the prepayment notice shall become due and payable by the Borrower on the date for prepayment specified in the prepayment notice.

8.7 Notification of Notice of Prepayment. The Agent shall notify the Lenders promptly upon receiving a prepayment notice, and shall provide any Lender which so requests with a copy of any document delivered by the Borrower under Clause 8.5(b).

8.8 Application of Partial Prepayment. Each partial prepayment shall be applied pro rata against the repayment installments for the relevant Advances.

8.9 Mandatory Prepayment. If a Collateral Vessel is sold or refinanced, if a Collateral Vessel becomes a Total Loss or if a Change of Control shall occur, the Borrower shall prepay in full the Advance related to such Collateral Vessel or prepay in full the Loan in the case of a Change of Control:

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

(b) in the case of a refinancing, on or before the date on which the refinancing is completed;

(c) in the case of a Total Loss, on the earlier of the Maturity Date, the date falling 180 days after the Total Loss Date and the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss; or

(d) in the case of a Change of Control, on or before the date falling 60 days from the earlier of (i) the date the Borrower becomes aware of the Change of Control or (ii) the date on which through reasonable diligence the Borrower should have become aware of the Change of Control.

8.10 Amounts Payable on Prepayment. A voluntary prepayment under Clause 8.4 and a mandatory prepayment under Clause 8.9 shall be made together with:

(a) accrued interest (and any other amount payable under Clause 22 or otherwise) in respect of the amount prepaid; and

(b) if the prepayment is not made on the last day of an Interest Period, any sums payable under Clause 22.1(b), but without premium or penalty.

8.11 No Reborrowing. No amount prepaid may be reborrowed.

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8.12 Release of Borrower and/or Collateral Vessel Owning Guarantor. Upon the full prepayment or repayment of an Advance or the voluntary cancellation of all Commitments relating to an Advance pursuant to the terms of this Agreement, the Creditor Parties agree, at the expense of the Borrower, to execute all such documents as Borrower may reasonably require to discharge the Finance Documents relating to (i) the Borrower but only to the extent of such Advance; and (ii) the Guarantor and its Collateral Vessel to which such Advance relates and such Guarantor shall be released as a Guarantor from under this Agreement and from its obligations under any other Finance Documents to which it is a party.

9. CONDITIONS PRECEDENT

9.1 Documents, Fees and No Default. Each Lender’s obligation to contribute to an Advance is subject to the following conditions precedent:

(e) on or before the Effective Date, the Agent shall have received or is satisfied it will receive the documents described in Part A of Schedule 4 in form and substance satisfactory to the Agent;

(f) that, on or prior to the Drawdown Date of an Advance for a Collateral Vessel but prior to the making of such Advance, (i) the Agent shall have received or is satisfied that it will receive on the making of such Advance the documents described in Part B of Schedule 4 in form and substance satisfactory to it and (ii) the Agent shall have confirmed that the amount of the Advance requested complies with the requirements of Clause 2.1;

(g) that, on or before the service of the first Drawdown Notice, the Agent shall have received any accrued commitment fee payable pursuant to Clause 21.1and has received payment of the expenses referred to in Clause 21.2; and

(h) that both at the date of each Drawdown Notice and at each Drawdown Date:

(i) no Event of Default or event or circumstances which, with the giving of notice and/or lapse of time would constitute an Event of Default has occurred and is continuing or would result from the borrowing of such Advance;

(ii) the representations and warranties in Clause 10 and those of the Borrower or any other Security Party which are set out in the other Finance Documents (other than those relating to a specific date) would be true and not misleading if repeated on each of those dates with reference to the circumstances then existing, provided that the requirements of this Clause 9.1(d)(ii) shall apply in respect of the representations and warranties in Clause 10.23 only as of the date of the Drawdown Notice and the Drawdown Date of the relevant Collateral Vessel;

(iii) none of the circumstances contemplated by Clause 5.8 has occurred and is continuing, unless the Agent is satisfied that an alternate rate of interest can be set pursuant to Clause 5.8;

(iv) there has been no material adverse change in the consolidated financial condition, operations or business prospects of the Borrower since December 31, 2013;

(v) there has been no Change of Control; and

(vi) there is no judgment, order, injunction or other restraint issued in connection with any legal or administration action prohibiting or imposing any material adverse conditions with respect to the performance by any party of its obligation under any of the Finance Documents or the transactions provided for in the Finance Documents.

(i) that, on the date of the Drawdown Notice for each Advance after the initial Advance if the Security Maintenance Cover Ratio were applied immediately following the making of such Advance, the Borrower would not be required to provide additional Collateral or prepay part of the Loan under Clause 15; and

(j) that the Agent has received, and found to be reasonably acceptable to it and in full force and effect, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the authorization of all of the Lenders, reasonably request by notice to the Borrower prior to the Drawdown Date.

9.2 Waiver of Conditions Precedent. Notwithstanding anything in Clause 9.1 to the contrary:

(a) if the Agent, with the consent of all Lenders, permits an Advance to be borrowed before certain of the conditions referred to in Clause 9.1 are satisfied, the Borrower shall ensure that such conditions are satisfied within ten (10) Business Days after such Drawdown Date (or such longer period as the Agent may specify).

(b) each Advance may be borrowed before the applicable conditions set forth in Clause 9.1 are satisfied and:

(i) each Lender agrees to fund its Contribution on the Drawdown Date requested by the Borrower, which day shall not be more than three (3) Business Days prior to the date of the scheduled acquisition and delivery of such Collateral Vessel (such date, the “Delivery Date”); and

(ii) the Agent shall on the date on which such Advance is funded (or as soon thereafter as practicable) (A) preposition an amount equal to the aggregate principal amount of such Advance at the bank or financial institution designated by the builder in the relevant Contract (“Builder’s Bank”), which funds shall be held at Builder’s Bank in the name and under the sole control of the Agent or one of its Affiliates and (B) issue a SWIFT MT 199 or other similar communication (each such communication, a “Disbursement Authorization”) authorizing the release of such funds by the Builder’s Bank on the relevant Delivery Date upon receipt of a protocol of delivery and acceptance in respect of such Collateral Vessel duly executed by the builder and the relevant Guarantor and countersigned by a representative of the Agent;

provided, that if delivery of such Collateral Vessel does not occur within five (5) Business Days after the scheduled Delivery Date, the funds held at the Builder’s Bank shall be released to the Agent for further disbursement to the Lenders.

For the avoidance of doubt, the parties hereto acknowledge and agree that:

(1)    the date on which the Lenders fund such Advance constitutes the Drawdown Date in respect of such Advance and all interest and fees thereon shall accrue from such date;

(2)    the Agent and the Lenders suspend fulfillment of the conditions precedent set forth in Schedule 4, Part B, Paragraphs 4 (except subclause (c)), 6, 8 (only with respect to the Mortgage as all other Finance Documents referred to in Paragraph 8 shall be executed, undated and delivered to Security Trustee), 9, 10, 11 and 16 solely for the period on and between such Drawdown Date and the relevant Delivery Date);

(3)    from the date the proceeds of the Advance are deposited at the Builder’s Bank to the Delivery Date (or, if delivery of such Collateral Vessel does not occur within the time prescribed in the Disbursement Authorization, the date on which the funds are returned to the Agent for further distribution to the Lenders), the Borrower shall be entitled to interest on such Advance at the applicable rate, if any, paid by the Builder’s Bank for such deposited funds;

(4)    if such Collateral Vessel is not delivered within the time prescribed in the Disbursement Authorization and the proceeds of such Advance are returned to the Agent and distributed to the Lenders, (i) the Borrower shall pay all accrued interest and fees in respect of such returned proceeds on the date such proceeds are returned to the Agent and (ii) the relevant available Commitment will be increased by an amount equal to the aggregate principal amount of the Loan proceeds so returned; and

(5)    if such Collateral Vessel is not delivered within the time prescribed in the Disbursement Authorization and the proceeds of such Advance are returned to the Agent, the Borrower shall pay breakage cost in accordance with Clause 22.1(b) on the returned proceeds of such Advance.

10. REPRESENTATIONS AND WARRANTIES

10.1 General. The Borrower and each of the Guarantors jointly and severally represent and warrant to each Creditor Party as of the Effective Date and each Drawdown Date as follows.

10.2 Status. Each Security Party is:

(f) duly incorporated or formed and validly existing and in good standing under the law of its jurisdiction of incorporation or formation; and

(g) duly qualified and in good standing as a foreign company in each other jurisdiction in which it owns or leases property or in which the conduct of its business requires it to so qualify or be licensed except where, in each case, the failure to so qualify or be licensed and be in good standing could not reasonably be expected to have a material adverse effect on its business, assets or financial condition or which may affect the legality, validity, binding effect or enforceability of the Finance Documents, and there are no proceedings or actions pending or contemplated by any Security Party, or to the knowledge of the Borrower or any of the Guarantors contemplated by any third party, seeking to adjudicate it as bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property.

10.3 Company Power; Consents. Each Security Party has the capacity and has taken all action, and no consent of any person is required, for:

(j) it to own or lease and operate its properties and to carry on its business as now conducted and as proposed to be conducted;

(k) it to execute each Finance Document to which it is or is to become a party;

(l) it to purchase and pay for the Collateral Vessel to be acquired by it and register such Collateral Vessel in its name under an Approved Flag;

(m) it to comply with its obligations under each Finance Document to which it is or is to become a party;

(n) it to grant the Security Interests granted or to be granted by it pursuant to the Finance Documents to which it is or is to become a party;

(o) the perfection or maintenance of the Security Interests created by the Finance Documents (including the first priority nature thereof); and

(p) the exercise by any Creditor Party of their rights under any of the Finance Documents or the remedies in respect of the Collateral pursuant to the Finance Documents to which it is or is to become a party,

except, in each case, for consents which have been duly obtained, taken, given or made and are in full force and effect.

10.4 Consents in Force. All the consents referred to in Clause 10.3 remain in force and nothing has occurred which makes any of them liable to revocation.

10.5 Title.

(a) Each Security Party owns in the case of owned personal property, good and valid title to, or, in the case of leased personal property, valid and enforceable leasehold interests in, all of its properties and assets, tangible and intangible, of any nature whatsoever, free and clear in each case of all Security Interests or claims, except for Permitted Security Interests.

(b) Each Security Party has not created nor is it contractually bound to create any Security Interest on or with respect to any of its assets, properties, rights or revenues, except for Permitted Security Interests, and except as provided in this Agreement each Guarantor is not restricted by contract, applicable law or regulation or otherwise from creating Security Interests on any of its assets, properties, rights or revenues.

(c) Each Guarantor has received (or will receive on the date it takes delivery of the Collateral Vessel to be owned by it) all deeds, assignments, waivers, consents, non-disturbance and attornment or similar agreements, bills of sale and other documents, and has duly effected (or will duly effect on the date it takes delivery of the Collateral Vessel to be owned by it) all recordings, filings and other actions necessary to establish, protect and perfect such Guarantor’s right, title and interest in and to the Collateral Vessel owned or to be owned by it and other properties and assets (or arrangements, for such recordings, filings and other actions shall have been made).

10.6 Legal Validity; Effective Security Interests. Subject to any relevant insolvency laws affecting creditors’ rights generally:

(a) the Finance Documents to which each Security Party is a party, constitute or, as the case may be, will constitute upon execution and delivery (and, where applicable, registration as provided for in the Finance Documents), such Security Party’s legal, valid and binding obligations enforceable against it in accordance with their respective terms; and

(b) the Finance Documents to which each Security Party is a party, create or, as the case may be, will create upon execution and delivery (and, where applicable, registration as provided for in the Finance Documents), legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate.

10.7 No Third Party Security Interests. Without limiting the generality of Clauses 10.5 and 10.6, at the time of the execution and delivery of each Finance Document:

(e) the relevant Security Party will have the right to create all the Security Interests which that Finance Document purports to create; and

(f) no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms, relates.

10.8 No Conflicts. The execution of each Finance Document, the borrowing of each Advance, and compliance with each Finance Document, will not involve or lead to a contravention of:

(c) any present law or regulation applicable to the relevant Security Party;

(d) the constitutional documents of any Security Party; or

(e) any contractual or other obligation or restriction which is binding on any Security Party or any of its assets.

10.9 Taxes.

(a) All payments which a Security Party is liable to make under the Finance Documents to which it is a party can properly be made without deduction or withholding for or on account of any tax payable under any law of any Pertinent Jurisdiction.

(b) Each Security Party has timely filed or has caused to be filed all tax returns and other reports that it is required by law or regulation to file in any Pertinent Jurisdiction, and has paid or caused to be paid all taxes, assessments and other similar charges that are due and payable in any Pertinent Jurisdiction, other than taxes and charges:

(i) which (A) are not yet due and payable or (B) are being contested in good faith by appropriate proceedings and for which adequate reserves have been established and as to which such failure to have paid such tax does not create any risk of sale, forfeiture, loss, confiscation or seizure of the Collateral Vessel or of criminal liability; or

(ii) the non-payment of which could not reasonably be expected to have a material adverse effect on the financial condition of such Security Party.

The charges, accruals, and reserves on the books of each Security Party respecting taxes are adequate in accordance with US GAAP.

(c) No material claim for any tax has been asserted in writing against a Security Party by any Pertinent Jurisdiction or other taxing authority other than claims that are included in the liabilities for taxes in the most recent balance sheet of such person or disclosed in the notes thereto, if any.

(d) The execution, delivery, filing and registration or recording (if applicable) of the Finance Documents and the consummation of the transactions contemplated thereby will not cause any of the Creditor Parties to be required to make any registration with, give any notice to, obtain any license, permit or other authorization from, or file any declaration, return, report or other document with any governmental authority in any Pertinent Jurisdiction.

(e) No taxes are required by any governmental authority in any Pertinent Jurisdiction to be paid with respect to or in connection with the execution, delivery, filing, recording, performance or enforcement of any Finance Document.

(f) The execution, delivery, filing, registration, recording, performance and enforcement of the Finance Documents by any of the Creditor Parties will not cause such Creditor Party to be deemed to be resident, domiciled or carrying on business in any Pertinent Jurisdiction of any Security Party or subject to taxation under any law or regulation of any governmental authority in any Pertinent Jurisdiction of any Security Party.

(g) Other than the recording of the Mortgages in accordance with the laws of the Approved Flag and such filings as may be required in a Pertinent Jurisdiction in respect of certain of the Finance Documents, and the payment of fees consequent thereto, it is not necessary for the legality, validity, enforceability or admissibility into evidence of this Agreement or any other Finance Document that any of them or any document relating thereto be registered, filed recorded or enrolled with any court or authority in any relevant jurisdiction or that any stamp, registration or similar taxes be paid on or in relation to this Agreement or any of the other Finance Documents.

10.10 No Default. No Event of Default or event or circumstances which, with the giving of notice and/or lapse of time would constitute an Event of Default has occurred or would result from the borrowing of the Advance and no other circumstances exist which constitute or (with the giving of notice, lapse of time, determination of materiality or the fulfillment of any other applicable condition or any combination of the foregoing) would constitute a default under any document which is binding on a Security Party or any of its assets and which may have a Material Adverse Effect on the ability of a Security Party to perform its obligations under the Finance Documents to which it is or is to be a party.

10.11 Information. All financial statements, information and other data furnished by or on behalf of a Security Party to any of the Creditor Parties:

(a) was true, accurate and complete in all material respects at the time it was given;

(b) such financial statements, if any, have been prepared in accordance with US GAAP and accurately and fairly represent the financial condition of such Security Party as of the date or respective dates thereof and the results of operations of such Security Party for the period or respective periods covered by such financial statements;

(c) there are no other facts or matters the omission of which would have made or make any such information false or misleading;

(d) there has been no material adverse change in the financial condition, operations or business prospects of any Security Party since the date on which such information was provided other than as previously disclosed to the Agent in writing which might reasonably be expected to have a Material Adverse Effect; and

(e) none of the Security Parties has any contingent obligations, liabilities for taxes or other outstanding financial obligations which are material in the aggregate except as disclosed in such statements, information and data.

10.12 No Litigation. No legal or administrative action involving a Security Party (including any action relating to any alleged or actual breach of the ISM Code, the ISPS Code or any Environmental Law) has been commenced or taken by any person, or, to the Borrower’s or any Guarantor’s knowledge, has been threatened which, in either case, if adversely determined, would be reasonably expected to have a material adverse effect on the business, assets or financial condition of a Security Party or which may affect the legality, validity, binding effect or enforceability of the Finance Documents.

10.13 ISM Code and ISPS Code Compliance. The relevant Guarantor has obtained or will obtain or will cause to be obtained all necessary ISM Code Documentation and ISPS Code Documentation in connection with the Collateral Vessel to be owned by it and its operation and will be or will cause such Collateral Vessel and the Approved Manager to be in full compliance with the ISM Code and the ISPS Code to the extent applicable.

10.14 No Rebates, etc. There is no agreement or understanding to allow or pay any rebate, premium, commission, discount or other benefit or payment (howsoever described) to any Borrower, Guarantor, any Affiliate of the Borrower, or any third party in connection with the acquisition of any of the Collateral Vessels except as disclosed in the public filings of the Borrower or as otherwise disclosed to the Agent in writing.

10.15 Compliance with Law; Environmentally Sensitive Material. Except to the extent the following could not reasonably be expected to have a material adverse effect on the business, assets or financial condition of any Security Party, or affect the legality, validity, binding effect or enforceability of the Finance Documents:

(a) the operations and properties of each Security Party complies with all applicable laws and regulations, including without limitation Environmental Laws, all necessary Environmental Permits have been obtained and are in effect for the operations and properties of such Security Party and each Security Party is in compliance in all material respects with all such Environmental Permits; and

(b) none of the Security Parties has been notified in writing by any person that it or any of its subsidiaries or Affiliates is potentially liable for the remedial or other costs with respect to treatment, storage, disposal, release, arrangement for disposal or transportation of any Environmentally Sensitive Material, except for costs incurred in the ordinary course of business with respect to treatment, storage, disposal or transportation of such Environmentally Sensitive Material.

10.16 Ownership Structure.

(a) Each of the Guarantors has no subsidiaries.

(b) 100% of the Equity Interests of each of the Guarantors have been validly issued, is fully paid, non-assessable and free and clear of all Security Interests other than Permitted Security Interests and are owned beneficially and directly of record by the Borrower.

(c) None of the Equity Interests of any of the Guarantors is subject to any existing option, warrant, call, right, commitment or other agreement of any character to which such Guarantor is a party requiring, and there are no Equity Interests of such Guarantor outstanding which upon conversion or exchange would require, the issuance, sale or transfer of any additional Equity Interests of such Guarantor or other Equity Interests convertible into, exchangeable for or evidencing the right to subscribe for or purchase Equity Interests of such Guarantor.

10.17 Pension Plans.

(a) On the Effective Date, no Security Party is a party to any Plan or Multiemployer Plan or Foreign Pension Plan.

(b) The execution and delivery of this Agreement and the consummation of the transaction hereunder will not constitute a non-exempt “prohibited transaction” for the purpose of Section 406 of ERISA or Section 4975 of the Code.

(c) No ERISA Termination Event has occurred.

(d) No ERISA Funding Event exists or has occurred.

10.18 Margin Stock. None of the Borrower and the Guarantors is engaged in the business of extending credit for the purpose of purchasing or carrying Margin Stock and no proceeds of any Advance will be used to buy or carry any Margin Stock or to extend credit to others for the purpose of buying or carrying any Margin Stock.

10.19 Investment Company, Public Utility, etc. The Borrower and each of the Guarantors is not:

(a) an “investment company,” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended; or

(b) a “public utility” within the meaning of the United States Federal Power Act of 1920, as amended.

10.20 Asset Control.

(a) Neither the Borrower nor any of the Guarantors (nor any of their subsidiaries, directors, officers, or, to the best of their knowledge, any of their affiliates or employees) (a) is a “national” of any “designated foreign country”, within the meaning of the Foreign Assets Control Regulations or the Cuban Asset Control Regulations of the United States Department of the Treasury, 31 C.F.R., Subtitle B, Chapter V, as amended , (b) is a Restricted Party, (c) is owned or controlled by, or acting directly or indirectly on behalf of or for the benefit of, a Restricted Party, (d) owns or controls a Restricted Party, (e) is subject to any claim, proceedings, formal notice or investigation with respect to Sanctions or (f) has taken any action resulting in a violation by such person of Sanctions.

(b) Neither the making of an Advance nor the use of the proceeds thereof nor the performance by the Borrower or any of the Guarantors of its obligations under any of the Finance Documents to which it is a party violates any law, regulation or Executive Order restricting loans to, investments in, or the export of assets to, foreign countries or entities doing business there.

(c) Neither the making of an Advance nor the use of the proceeds thereof nor the performance by the Borrower or any of the Guarantors of its obligations under any of the Finance Documents to which it is a party violates any Sanctions, or shall be made available, directly or indirectly, to or for the benefit of a Restricted Party or otherwise shall be, directly or indirectly, applied in a manner or for a purpose prohibited by Sanctions.

10.21 No Money Laundering. Without prejudice to the generality of Clause 2.3, in relation to the borrowing by the Borrower of an Advance, the performance and discharge of its obligations and liabilities under the Finance Documents, and the transactions and other arrangements affected or contemplated by the Finance Documents to which the Borrower is a party, the Borrower confirms that:

(a) it is acting for its own account;

(b) it will use the proceeds of an Advance for its own benefit, under its full responsibility and exclusively for the purposes specified in this Agreement; and

(c) the foregoing will not involve or lead to a contravention of any law, official requirement or other regulatory measure or procedure implemented to combat “money laundering” (as defined in Article 1 of Directive 2005/60/EC of the European Parliament and of the Council) and comparable United States federal and state laws, including without limitation the PATRIOT Act and the Bank Secrecy Act, or comparable United Nations or European Union legislation.

10.22 Anti-bribery, anti-corruption and anti-money laundering. Neither the Borrower nor any of the Guarantors (nor any of their subsidiaries, directors, officers, or, to the best of their knowledge, any of their affiliates or employees) has engaged in any activity or conduct which would violate any applicable anti-bribery, anti-corruption or anti-money laundering laws or regulations in any applicable jurisdiction and the Borrower and the Guarantors have instituted and maintain policies and procedures designated to prevent violation of such laws, regulations and rules.

10.23 Collateral Vessels. As of the Delivery Date of the relevant Collateral Vessel, such Collateral Vessel will be:

(a) in the sole and absolute ownership of the relevant Guarantor and duly registered in such Guarantor’s name under the law of an Approved Flag, and unencumbered save and except for the Mortgage thereon in favor of the Security Trustee recorded or to be recorded against it and as permitted thereby;

(b) seaworthy for hull and machinery insurance warranty purposes and in every way fit for its intended service; and

(c) insured in accordance with the provisions of this Agreement and the requirements hereof in respect of such Insurances will have been complied with.

10.24 Place of Business. For purposes of the UCC, each Security Party has only one place of business located at, or, if it has more than one place of business, the chief executive office from which it manages the main part of its business operations and conducts its affairs is located at:

9, Boulevard Charles III
Monaco 98000

None of the Security Parties has a place of business in the United States of America, the District of Columbia, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States of America, other than its representative office at:

150 East 58th Street
New York, New York 10155

10.25 Solvency. In the case of the Borrower and each of the Guarantors:

(a) the sum of its assets, at a fair valuation, does and will exceed its liabilities, including, to the extent they are reportable as such in accordance with US GAAP, contingent liabilities;

(b) the present fair market saleable value of its assets is not and shall not be less than the amount that will be required to pay its probable liability on its then existing debts, including, to the extent they are reportable as such in accordance with US GAAP, contingent liabilities, as they mature;

(c) it does not and will not have unreasonably small working capital with which to continue its business; and

(d) it has not incurred, does not intend to incur and does not believe it will incur, debts beyond its ability to pay such debts as they mature.

10.26 Borrower’s Business; Guarantors’ Business. From the date of its incorporation until the date hereof, neither the Borrower nor any of the Guarantors have conducted any business other than in connection with, or for the purpose of, owning, managing, chartering and/or operating the Collateral Vessels and other vessels owned or chartered by the Borrower’s subsidiaries and, in the case of the Borrower, owning the Equity Interest in the Guarantors and its other subsidiaries.

10.27 Immunity; Enforcement; Submission to Jurisdiction; Choice of Law.

(a) Each Security Party is subject to civil and commercial law with respect to its obligations under the Finance Documents, and the execution, delivery and performance by each Security Party of the Finance Documents to which it is a party constitute private and commercial acts rather than public or governmental acts.

(b) No Security Party or any of its properties has any immunity from suit, court jurisdiction, attachment prior to judgment, attachment in aid of execution of a judgment, set-off, execution of a judgment or from any other legal process in relation to any Finance Document.

(c) It is not necessary under the laws of any Security Party’s jurisdiction of incorporation or formation, in order to enable any Creditor Party to enforce its rights under any Finance Document or by reason of the execution of any Finance Document or the performance by the any Security Party of its obligations under any Finance Document, that such Creditor Party should be licensed, qualified or otherwise entitled to carry on business in such Security Party’s jurisdiction of incorporation or formation.

(d) None of the Creditor Parties will be deemed to be resident, domiciled or carrying on business in any Security Party’s jurisdiction of incorporation or formation by reason only of the execution, performance and/or enforcement of any Finance Document.

(e) Under the law of each Security Party’s jurisdiction of incorporation or formation, the choice of the law of New York to govern this Agreement and the other Finance Documents to which New York law is applicable is valid and binding.

(f) The submission by the Security Parties to the jurisdiction of the courts of New York State and the U.S. Federal court sitting in New York County pursuant to Clause 32.2(a) is valid and binding and not subject to revocation, and service of process effected in the manner set forth in Clause 32.2(d) will be effective to confer personal jurisdiction over the Security Parties in such courts.

10.28 Status of Secured Liabilities. The Secured Liabilities constitute direct, unconditional and general obligations of each Security Party and rank (a) senior to all subordinated Financial Indebtedness and (b) not less than pari passu (as to priority of payment and as to security) with all other Financial Indebtedness of each Security Party except for obligations mandatorily preferred by law.

11. GENERAL AFFIRMATIVE AND NEGATIVE COVENANTS

11.1 Affirmative Covenants. From the Effective Date until the Total Commitments have terminated and all amounts payable hereunder have been paid in full, the Borrower and each of the Guarantors, as the case may be, undertakes with each Creditor Party to comply or cause compliance with the following provisions of this Clause 11.1, except as the Agent, with the consent of the Required Lenders, may approve from time to time in writing such consent not to be unreasonably withheld, conditioned or delayed, provided, however, that such consent and approval shall be subject always to Clauses 28.1 and 28.2 of this Agreement:

(h) Performance of Obligations. Each Security Party shall duly observe and perform its obligations under each Charter and each Finance Document to which it is or is to become a party.

(i) Notification of Defaults (etc.). The Borrower and each of the Guarantors shall promptly notify the Agent, upon becoming aware of the same, of:

(iii) the occurrence of an Event of Default or event or circumstances which, with the giving of notice and/or lapse of time would constitute an Event of Default or any other event (including any litigation) which is reasonably likely to have a Material Adverse Effect together with the steps, if any, being taken by the Borrower and the relevant Guarantor; if any, to remedy such occurrence;

(iv) any material breach by any party to a Charter; and

(v) any damage or injury caused by or to a Collateral Vessel requiring repairs the cost of which exceeds $2,500,000.

(j) Confirmation of No Default. The Borrower will, within two (2) Business Days after service by the Agent of a written request, serve on the Agent a notice which is signed by an officer of the Borrower and which states that:

(i) no Event of Default or event or circumstances which, with the giving of notice and/or lapse of time would constitute an Event of Default has occurred and is continuing; or

(ii) no Event of Default has occurred and is continuing, except for a specified event or matter, of which all material details are given.

The Agent may serve requests under this Clause 11.1(c) from time to time but only if asked to do so by a Lender or Lenders having Contributions exceeding 33% of the Loan or (if no Advances have been made) Commitments exceeding 33% of the Total Commitments, and this Clause 11.1(c) does not affect the Borrower’s obligations under Clause 11.1(b).

(k) Notification of Litigation. The Borrower will provide the Agent with relevant details of any legal or administrative action involving the Borrower, any other Security Party or any Collateral Vessel, the Earnings or the Insurances as soon as the Borrower becomes aware that such action is instituted, unless it is likely that the legal or administrative action cannot be considered material in the context of any Finance Document.

(l) Provision of Further Information. The Borrower will, as soon as practicable after receiving the request, provide the Agent with any additional financial or other information relating to:

(i) the Borrower or any of the Guarantors or any of their respective subsidiaries; or

(ii) any other matter relevant to, or to any provision of, a Finance Document, which may be requested by the Agent.

(m) Books of Record and Account. The Borrower and each of the Guarantors shall keep proper books of record and account, in which full and materially correct entries shall be made of all financial transactions and the assets and business of each of the Borrower and the Guarantors in accordance with US GAAP, and the Agent shall have the right to examine the books and records of the Borrower and each of the Guarantors wherever the same may be kept from time to time as it sees fit, in its sole reasonable discretion, or to cause an examination to be made by a firm of accountants selected by it, provided that any examination shall be done without undue interference with the day to day business of the Borrower or any of the Guarantors, as the case may be.

(n) Financial Reports.

The Borrower shall furnish to the Agent:

(i)    as soon as reasonably practicable and in any event within 60 days after the end of each of the first three fiscal quarters in each Fiscal Year and within 90 days after the end of the final fiscal quarter in each Fiscal Year, quarterly reports on Form 6-K (or any successor form) containing unaudited consolidated financial statements (including a balance sheet and statement of income, changes in stockholders’ equity and cash flow) for and as of the end of such fiscal quarter (with comparable financial statements for the corresponding fiscal quarter of the immediately preceding Fiscal Year) together with a Compliance Certificate;

(ii)    as soon as reasonably practicable and in any event within 120 days after the end of each Fiscal Year, an annual report on Form 20-F (or any successor form) containing the audited consolidated financial and other information required to be contained therein for such Fiscal Year together with a Compliance Certificate;

(iii)    at or prior to such times as would be required to be filed or furnished to the SEC all such other reports and information that the Borrower is required to file or furnish to the SEC under Sections 13(a) or 15(d) of the Exchange Act;

(iv)    as soon as reasonably practicable and in any event within 90 days after the end of each Fiscal Year, cash flow projections (including a statement of profit and loss, balance sheet and statement of cash flows for the Borrower and its subsidiaries (on a consolidated basis) for the following four calendar years; and

(v)    such other financial statements (including without limitation details of all off-balance sheet and time charter hire commitments), annual budgets, statements of profit and loss, balance sheets, statements of cash flows, projections and compliance certificates together with quarterly reports and cash flow projections as may be reasonably requested by the Agent for the Borrower and/or any of its subsidiaries (including any Guarantor), each to be in such form as the Agent may reasonably request,

provided that to the extent that the Borrower ceases to qualify as a “foreign private issuer” within the meaning of the Exchange Act, the Borrower will furnish to the Agent all reports and other information that it would be required to file with (or furnish to) the Commission pursuant Sections 13(a) or 15(d) of the Exchange Act if it were required to file such documents under the Exchange Act as follows:

(1) if the Borrower is then subject to Sections 13(a) or 15(d) of the Exchange Act, within 30 days of the respective dates on which the Borrower is required to file such documents pursuant to the Exchange Act; or

(2) if the Borrower is not then subject to Sections 13(a) or 15(d) under the Exchange Act, the applicable time periods described above with respect to quarterly, annual and other reports and information.

Notwithstanding the foregoing, the Borrower will be deemed to have furnished to the Agent such reports and information referred to above if the Borrower has filed such reports and information with the Commission via the EDGAR system (or any successor system) and such reports and information are publicly available.

(o) Appraisals of Fair Market Value. The Borrower shall procure and deliver to the Agent two written appraisal reports setting forth the Fair Market Value of each of the Collateral Vessels as follows:

(i) at the Borrower’s expense, for inclusion with each Compliance Certificate required to be delivered together with the second quarterly and annual financial statements that the Borrower delivers under Clause 11.1(g)(ii)(A) and (B); and

(ii) at the Lenders’ expense, at all other times upon the request of the Agent or the Required Lenders, unless an Event of Default has occurred and is continuing, in which case the Borrower shall procure it at its expense as often as requested.

provided that, if the two appraisals differs by more than 10% of the higher appraisal, the Agent shall appoint a third Approved Broker to submit an appraisal report at Borrower’s cost and the Fair Market Value shall then be the arithmetic mean of the valuations obtained from the three Approved Brokers.

(p) Taxes. Each Security Party shall prepare and timely file all tax returns required to be filed by it and pay and discharge all taxes imposed upon it or in respect of any of its property and assets before the same shall become in default, as well as all lawful claims (including, without limitation, claims for labor, materials and supplies) which, if unpaid, might become a Security Interest upon the Collateral or any part thereof, except in each case, for any such taxes (i) as are being contested in good faith by appropriate proceedings, (ii) as to which such failure to have paid does not create any risk of sale, forfeiture, loss, confiscation or seizure of a Collateral Vessel or criminal liability, or (iii) the failure of which to pay or discharge would not be likely to have a material adverse effect on the business, assets or financial condition of any of the Borrower or any other Security Party or to affect the legality, validity, binding effect or enforceability of the Finance Documents.

(q) Consents. Each Security Party shall obtain or cause to be obtained, maintain in full force and effect and comply with the conditions and restrictions (if any) imposed in connection with, every consent and do all other acts and things which may from time to time be necessary or required for the continued due performance of all of its obligations under any Charter and each Finance Document to which it is or is to become a party, and shall deliver a copy of all such consents to the Agent promptly upon its request.

(r) Compliance with Applicable Law. Each Security Party shall comply in all material respects with all applicable federal, state, local and foreign laws, ordinances, rules, orders and regulations now in force or hereafter enacted, including, without limitation, all Environmental Laws and regulations relating thereto, the failure to comply with which would be likely to have a material adverse effect on the financial condition of such Security Party or affect the legality, validity, binding effect or enforceability of any Charter and each Finance Document to which it is or is to become a party.

(s) Existence. Each Security Party shall do or cause to be done all things necessary to preserve and keep in full force and effect its existence in good standing under the laws of its jurisdiction of incorporation or formation.

(t) Borrower and Guarantors’ Business.

(i) The Borrower shall conduct business in connection with, or for the purpose of, managing, chartering and operating the Collateral Vessels and other vessels and directly or indirectly owning the Equity Interest of each of the Guarantors and other vessel owning companies, provided, however, that the business of the Borrower and its subsidiaries shall be limited to maritime and/or logistics; and

(ii) Each Guarantor shall conduct business only in connection with, or for the purpose of, owning, managing, chartering and operating the Collateral Vessel owned by it in the dry bulk shipping business.

(u) Properties. Except to the extent the failure to do so could not reasonably be expected to have a material adverse effect on the business, assets or financial condition of a Security Party or affect the legality, validity, binding effect or enforceability of the Finance Documents, each Security Party shall maintain and preserve all of its properties that are used or useful in the conduct of its business in good working order and condition, ordinary wear and tear excepted.

(v) Loan Proceeds. The Borrower shall use the proceeds of each Advance solely to partially finance the payment of the acquisition cost for a Collateral Vessel.

(w) Change of Place of Business. Each Security Party shall notify promptly the Agent of any change in the location of the place of business where it or any other Security Party conducts its affairs and keeps its records.

(x) Pollution Liability. Each Security Party shall take, or cause to be taken, such actions as may be reasonably required to mitigate potential liability to it arising out of pollution incidents or as may be reasonably required to protect the interests of the Creditor Parties with respect thereto.

(y) Subordination of Loans. Each Security Party shall cause all loans made to it by any Affiliate, parent or subsidiary and all sums and other obligations (financial or otherwise) owed by it to any Affiliate, parent or subsidiary to be fully and unconditionally subordinated to all Secured Liabilities.

(z) OFAC; Money Laundering; CISADA. Each Security Party shall to the best of its knowledge and ability:

(i) ensure that no person who owns a controlling interest in or otherwise controls the Borrower, the Guarantors or any parent or subsidiary thereof is a Restricted Party;

(ii) comply, and cause each of their subsidiaries to comply, with any applicable law, official requirement or other regulatory measure or procedure implemented to combat “money laundering” (as defined in Article 1 of Directive 2005/60/EC of the European Parliament and of the Council) and comparable United States federal and state laws, including without limitation the PATRIOT Act and the Bank Secrecy Act, or comparable United Nations or European Union legislation;

(iii) not use or permit the use of the proceeds of any Advance to violate any Sanctions, or be made available, directly or indirectly, to or for the benefit of a Restricted Party or otherwise shall be, directly or indirectly, applied in a manner or for a purpose prohibited by Sanctions; and

(iv) not knowingly permit or authorize and shall to the best of its abilities prevent any of the Collateral Vessels being used directly or indirectly by or for the benefit of any Restricted Party and/or in any trade which will expose any of the Collateral Vessels, any Security Party or the insurers of any of the Collateral Vessels to enforcement proceedings or any other consequences whatsoever arising from Sanctions.

provided, however, to the extent a Creditor Party resident in Germany (“Inländer”) within the meaning of Section 2, Paragraph 15 of the German foreign trade and payments act referred to as Auβenwirtschaftsgesetz (“AWG”) and therefore subject to Section 7 of the German foreign trade ordinance (Auβenwirtschaftsverordnung “AWV”) would not be permitted to make a representation or grant an undertaking that is made or is to be made or granted or is to be granted by a Security Party with respect to OFAC, CISADA or any other sanctions contemplated in this Agreement, then such Creditor Party shall not, in the event of a breach by such Security Party of any such representation or undertaking, be entitled to invoke or declare an Event of Default under this Agreement or vote in favor of a cancellation of the Total Commitment and immediate repayment of the Loan in accordance with Clause 24.3; and provided, further, that the representations made by any Security Party in Clause 10.20 of this Agreement and the undertakings made by any Security Party in this Clause 11.1(s) to any Inländer within the meaning of Section 2, Paragraph 15 of the AWG are made or granted, as the case may be, only to the extent such Creditor Party itself would be permitted to make such representations or undertakings pursuant to Section 7 of the AWV.

(aa) ERISA. Promptly upon becoming aware of:

(i) the occurrence of any ERISA Termination Event; or

(ii) the occurrence or existence of any ERISA Funding Event;

the Borrower shall furnish or cause to be furnished to the Agent written notice thereof and the action, if any, which the Borrower has taken and proposes to take with respect thereto.

(bb) Information Provided to be Accurate. All financial and other information which is provided in writing by or on behalf of any Security Party under or in connection with any Finance Document will be true and not misleading and will not omit any material fact or consideration.

(cc) Shareholder and Creditor Notices. The Borrower and each of the Guarantors will send the Agent, at the same time as they are dispatched, copies of all communications which are dispatched to their (i) shareholders or any class of them or (ii) their creditors generally.

(dd) Maintenance of Security Interests. The Borrower and each of the Guarantors will:

(i) at its own cost, do all that it reasonably can to ensure that any Finance Document validly creates the obligations and the Security Interests which it purports to create; and

(ii) without limiting the generality of paragraph (i), at its own cost, promptly register, file, record or enroll any Finance Document with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in respect of any Finance Document, give any notice or take any other step which, in the opinion of the Required Lenders, is or has become reasonably necessary or desirable for any Finance Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.

(ee) “Know your customer” checks. If:

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

(ii) any change in the status of any Security Party after the date of this Agreement; or

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

obliges the Agent or any Lender (or, in the case of paragraph (iii), 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, the Borrower and each of the Guarantors shall promptly upon the reasonable request of the Agent or the Lender concerned supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or the Lender concerned (for itself or, in the case of the event described in paragraph (iii), on behalf of any prospective new Lender) in order for the Agent, the Lender concerned or, in the case of the event described in paragraph (iii), any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

(ff) Copies of Charters; Charter Assignment. Provided that all approvals necessary under Clause 14.13 have been previously obtained, the Borrower shall:

(i) furnish promptly to the Agent a true and complete copy of any Charter for any Collateral Vessel and a true and complete copy of each material amendment thereof; and

(ii) in respect of any such Charter, (a) execute and deliver to the Agent a Charter Assignment and (b) use reasonable commercial efforts to cause the charterer to execute and deliver to the Security Trustee a consent and acknowledgement to such Charter Assignment in the form required thereby.

(gg) Further Assurances. From time to time, at its expense, the Borrower and each of the Guarantors shall duly execute and deliver to the Agent such further documents and assurances as the Agent may reasonably request to effectuate the purposes of this Agreement, the other Finance Documents or obtain the full benefit of any of the Collateral.

11.2 Negative Covenants. From the Effective Date until the Total Commitments have terminated and all amounts payable hereunder have been paid in full, the Borrower and each of the Guarantors, as the case may be, undertakes with each Creditor Party to comply or cause compliance with the following provisions of this Clause 11.2, except as the Agent, with the consent of the Required Lenders, may approve from time to time in writing such consent not to be unreasonably withheld, conditioned or delayed, provided, however, that such consent and approval shall be subject always to Clauses 28.1 and 28.2 of this Agreement:

(q) Security Interests. Each of the Guarantors will not create, assume or permit to exist any Security Interest whatsoever upon any of its properties or assets, whether now owned or hereafter acquired, except for Permitted Security Interests and the Borrower will not create, assume or permit to exist any Security Interest on the shares of each of the Guarantors, other than those in favor of the Security Trustee.

(r) Sale of Assets; Merger. Each of the Borrower and the Guarantors shall not sell, transfer or lease (other than in connection with a Charter) all or substantially all of its properties and assets, or enter into any transaction of merger or consolidation or liquidate, windup or dissolve itself (or suffer any liquidation or dissolution), provided that any Guarantor may sell its respective Collateral Vessel pursuant to the terms and conditions of this Agreement.

(s) Affiliate Transactions. No Security Party will enter into any transaction or series of related transactions, whether or not in the ordinary course of business, with any Affiliate, parent or subsidiary, other than on terms and conditions substantially as favorable to such person as would be obtainable by such person at the time in a comparable arm’s-length transaction with a person other than an Affiliate, parent or subsidiary.

(t) Change of Business. Each of the Guarantors will not change the nature of its business or commence any business other than in connection with, or for the purpose of, owning, managing, chartering and operating the Collateral Vessel to be owned by it. The Borrower will not change the nature of its business or commence any business other than in connection with, or for the purpose of, owning, managing, chartering and operating vessels and directly or indirectly owning the Equity Interests of each of the Guarantors and other subsidiaries.

(u) Change of Control; Negative Pledge. The Borrower and each of the Guarantors will not permit any act, event or circumstance that would result in a Change of Control, and each of the Guarantors will not permit any pledge or assignment of its Equity Interests except in favor of the Security Trustee to secure the Secured Liabilities.

(v) Increases in Capital. None of the Guarantors will increase its capital by way of the issuance of any class or series of Equity Interests or create any new class of Equity Interests that is not subject to a Security Interest to secure the Secured Liabilities.

(w) Financial Indebtedness. None of the Guarantors shall incur any Financial Indebtedness other than (i) the Loan, (ii) Financial Indebtedness incurred in the ordinary course of business provided that such indebtedness does not give to rise to any Security Interests other than Permitted Security Interests, (iii) existing indebtedness outstanding on the date of this Agreement which is disclosed to, and acceptable to, the Required Lenders and (iv) intercompany loans and advances (which at all times shall be fully and unconditionally subordinated to all Secured Liabilities).

(x) Dividends. So long as an Event of Default has occurred and is continuing, or if an Event of Default would result therefrom, or if the Borrower is not in compliance with any of Clauses 12.2 through and including 12.5, the Borrower and each of the Guarantors shall not declare or pay any dividends or return any capital to its equity holders or authorize or make any other distribution, payment or delivery of property or cash to its equity holders, or redeem, retire, purchase or otherwise acquire, directly or indirectly, for value, any interest of any class or series of its Equity Interests (or acquire any rights, options or warrants relating thereto but not including convertible debt) now or hereafter outstanding, or repay any subordinated loans to equity holders or set aside any funds for any of the foregoing purposes.

(y) No Amendment to the Charters. Each of the Guarantors will not agree to any material amendment or supplement to, or waive or fail to enforce a Charter or any of its material provisions without the prior consent of the Agent acting on behalf of the Required Lenders.

(z) No Employees; VAT group; Ordinary Course of Business.

(iii) Each of the Guarantors shall not have any employees other than the master, the officers and the crew of the Collateral Vessel to be owned by it.

(iv) The Guarantors shall not be or become a member of any VAT (value added tax) group.

(v) The Guarantors shall not enter into any transaction or series of related transactions other than in the ordinary course of business.

(aa) Loans and Investments. Except for any capital expenditures or investments related to ordinary upgrades or maintenance work of the Collateral Vessels, the Guarantors shall not make any loan or advance to, make any investment in, or enter into any working capital maintenance or similar agreement with respect to any person, whether by acquisition of Equity Interests or indebtedness, by loan, guarantee or otherwise unless (i) after giving effect to any such investment, the Guarantors are in pro forma compliance with the financial covenants in Clause 12 and (ii) no event or circumstances which, with the giving of notice and/or lapse of time would constitute an Event of Default or Event of Default exists at the time of incurrence thereof or would result therefrom.

(bb) Acquisition of Capital Assets. The Guarantors shall not acquire any capital assets (including any vessel other than a Collateral Vessel) by purchase, charter or otherwise, provided that for the avoidance of doubt nothing in this Clause 11.2(l) shall prevent or be deemed to prevent capital improvements being made to a Collateral Vessel.

(cc) Changes to Fiscal Year and Accounting Policies. The Borrower and each of the Guarantors shall not (i) change its Fiscal Year without the prior written consent of the Required Lenders or (ii) make or permit any change in accounting policies affecting (a) the presentation of financial statements or (b) reporting practices, except in either case in accordance with US GAAP or pursuant to the requirements of applicable laws or regulations.

(dd) Jurisdiction of Incorporation or Formation; Amendment of Constitutional Documents. No Security Party shall change the jurisdiction of its incorporation or formation or materially amend its constitutional documents without the prior written consent of all Lenders.

(ee) Sale of Collateral Vessel. None of the Guarantors will consummate the sale of its Collateral Vessel without paying or causing to be paid all amounts due and owing under this Agreement or in connection therewith and the other Finance Documents prior to or simultaneously with the consummation of such sale.

(ff) Change of Location. No Security Party shall change the location of its chief executive office or the office where its corporate records are kept or open any new office for the conduct of its business on less than thirty (30) days prior written notice to the Agent.

(gg) Money Laundering. The Borrower and each of the Guarantors shall not contravene any law, official requirement or other regulatory measure or procedure implemented to combat “money laundering” (as defined in Article 1 of Directive 2005/60/EC of the European Parliament and of the Council and comparable United States federal and state laws, including without limitation the Bank Secrecy Act and the PATRIOT Act.

(hh) Location of bank accounts. No Guarantor shall open or maintain a bank account with a bank or other financial institution other than the Account Bank.

12. FINANCIAL COVENANTS

12.1 General. From the Effective Date until the Total Commitments have terminated and all amounts payable hereunder have been paid in full, the Borrower undertakes with each Creditor Party to comply or cause compliance with the following provisions of this Clause 12 except as the Agent, with the consent of the Required Lenders, may approve from time to time in writing, such approval not to be unreasonably withheld, conditioned or delayed, provided, however, that such consent and approval shall be subject always to Clauses 28.1 and 28.2 of this Agreement.

12.2 Maximum Leverage. The Borrower shall maintain a ratio of Net Debt to Consolidated Total Capitalization of not more than 0.60 to 1.00, to be tested on the last day of each fiscal quarter.

12.3 Minimum Tangible Net Worth. The Borrower shall maintain a Consolidated Tangible Net Worth of not less than $500,000,000 plus (a) 25% of the Borrower’s cumulative, positive consolidated net income for each fiscal quarter commencing on or after December 31, 2013 and (b) 50% of the value of the Equity Proceeds realized from any issuance of Equity Interest in the Borrower occurring on or after December 31, 2013.

12.4 Minimum Interest Coverage. The Borrower shall maintain a ratio of Consolidated EBITDA to Consolidated Net Interest Expense of greater than 1.00 to 1.00 for the quarter ending September 30, 2015 until and including the quarter ending December 31, 2016, greater than 2.00 to 1.00 for the quarter ending March 31, 2017 until and including the quarter ending December 31, 2017, and thereafter greater than 2.50 to 1.00. Such ratio shall be calculated quarterly on a trailing four quarter basis.

12.5 Free Liquidity. From and after the Effective Date, the Borrower shall maintain Consolidated Liquidity of not less than the greater of (i) $50,000,000, or (ii) $850,000 per vessel owned by the Borrower or any subsidiary of the Borrower. For the avoidance of doubt, Consolidated Liquidity shall include all amounts held in the Earnings Account or in any other accounts of the Borrower or its subsidiaries with any of the Lenders.

13. MARINE INSURANCE COVENANTS

13.1 General. From the first Drawdown Date of an Advance until the Total Commitments have terminated and all amounts payable hereunder have been paid in full, each of the Guarantors undertakes with each Creditor Party to comply or cause compliance with the following provisions of this Clause 13 except as the Agent, with the consent of the Required Lenders, may approve from time to time in writing, such approval not to be unreasonably withheld, conditioned or delayed.

13.2 Maintenance of Obligatory Insurances. Each of the Guarantors shall keep the Collateral Vessel owned by it insured at its expense against:

(d) fire and usual marine risks (including hull and machinery and excess risks);

(e) war risks (including without limitation terrorism and piracy and war risk P&I and London blocking and trapping addendum);

(f) protection and indemnity risks (including FD&D coverage for all periods that such Collateral Vessel operates on a time charter);

(g) any other risks against which the Security Trustee considers, having regard to practices and other circumstances prevailing at the relevant time, it would be reasonable in the opinion of the Security Trustee for that Guarantor to insure and which are specified by the Security Trustee by notice to the Borrower and the Guarantors.

13.3 Terms of Obligatory Insurances. The relevant Guarantor shall effect such insurances in respect of its Collateral Vessel:

(c) in Dollars;

(d) in the case of fire and usual marine risks and war risks, in an amount on an agreed value basis at least the greater of:

(i) 110% of the Advance of the Loan applicable to such Collateral Vessel; and

(ii) the Fair Market Value of the Collateral Vessel owned by it;

provided that not less than 80% of the insured value established pursuant to (i) or (ii) above shall be on a hull and machinery basis.

(e) in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry and in the international marine insurance market (currently 1 billion US dollars);

(f) in relation to protection and indemnity risks in respect of the full tonnage of the Collateral Vessel owned by it;

(g) on approved terms; and

(h) through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity

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risks, in approved war risks and protection and indemnity risks associations that are members of the International Group of P&I Clubs.

13.4 Further Protections for the Creditor Parties. In addition to the terms set out in Clause 13.3, each Guarantor shall procure that the obligatory Insurances effected by it shall:

(g) subject always to paragraph (b), name such Guarantor and Approved Manager as the only named assureds unless the interest of every other named assured is limited:

(iii) in respect of any obligatory Insurances for hull and machinery and war risks;

(A) to any provable out-of-pocket expenses that it has incurred and which form part of any recoverable claim on underwriters; and

(B) to any third party liability claims where cover for such claims is provided by the policy (and then only in respect of discharge of any claims made against it); and

(iv) in respect of any obligatory Insurances for protection and indemnity risks, to any recoveries it is entitled to make by way of reimbursement following discharge of any third party liability claims made specifically against it;

and, where requested in writing by the Security Trustee, every other named assured has undertaken in writing to the Security Trustee (in such form as it reasonably required or, in the case of any sub-manager appointed by an Approved Manager, in a Manager’s Undertaking) that any deductible shall be apportioned between the relevant Guarantor and every other named assured in proportion to the aggregate claims made or paid by each of them and that it shall do all things necessary and provide all documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances;

(h) name the Security Trustee as loss payee with such directions for payment as the Security Trustee may specify;

(i) to the extent permitted by the terms of the Insurances, provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set-off, counterclaim or deductions or condition whatsoever save for the deduction of unpaid

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premiums or other amounts applicable to the relevant Guarantors and the Collateral Vessels and not applicable to any other vessel or person;

(j) provide that such obligatory insurances shall be primary without right of contribution from other Insurances which may be carried by the Security Trustee or any other Creditor Party; and

(k) provide that the Security Trustee may make proof of loss if the relevant Guarantor fails to do so.

13.5 Renewal of Obligatory Insurances. Each of the Guarantors shall:

(f) at least 14 days before the expiry of any obligatory Insurance:

(v) notify the Security Trustee of the brokers (or other insurers) and any protection and indemnity or war risks association through or with whom the relevant Guarantors propose to renew that obligatory Insurance and of the proposed terms of renewal; and

(vi) obtain the Security Trustee’s approval to the matters referred to in paragraph (i);

(g) at least 7 days before the expiry of any obligatory Insurance, renew that obligatory Insurance in accordance with the Security Trustee’s approval pursuant to paragraph (a); and

(h) procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall promptly after the renewal notify the Security Trustee in writing of the terms and conditions of the renewal.

13.6 Copies of Policies; Letters of Undertaking. The Guarantors shall ensure that all approved brokers provide the Security Trustee with statements detailing the intended cover of all policies relating to the obligatory Insurances which they are to effect or renew and of a letter or letters or undertaking in a form required by the Security Trustee and including undertakings by the approved brokers that:

(h) they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment in accordance with the Insurance Assignment;

(i) they will hold such policies, and the benefit of such insurances, to the order of the Security Trustee in accordance with the said loss payable clause;

(j) they will advise the Security Trustee immediately of any material change to the terms of the obligatory Insurances or if they cease to act as brokers;

(k) they will notify the Security Trustee, not less than 14 days before the expiry of the obligatory Insurances, in the event of their not having received notice of renewal instructions from the relevant Security Party or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Security Trustee of the terms of the instructions; and

(l) in each case to the extent permitted by the terms of the Insurances, they will not set off against any sum recoverable in respect of a claim relating to the Collateral Vessel owned by such Guarantor under such obligatory Insurances any premiums or other amounts due to them or any other person in respect of any vessel other than the Collateral Vessel, to which the claim refers, they waive any lien on the policies, or any sums received under them, which they might have in respect of such premiums or other amounts related to vessels other than the Collateral Vessels or persons other than the Borrower, and they will not cancel such obligatory Insurances by reason of non-payment of such premiums or other amounts related to vessels other than the Collateral Vessels or persons other than the Guarantors, and will arrange for a separate policy to be issued in respect of the relevant Collateral Vessels forthwith upon being so requested by the Security Trustee.

13.7 Copies of Certificates of Entry. The relevant Guarantor shall ensure that any protection and indemnity and/or war risks associations in which the Collateral Vessel owned by it is entered provides the Security Trustee with:

(a) a certified copy of the certificate of entry for the Collateral Vessel;

(b) a letter or letters of undertaking in such form as may be required by the Security Trustee;

(c) where required to be issued under the terms of insurance/indemnity provided by the protection and indemnity association, but only if and when so requested by the Agent, a certified copy of each United States of America voyage quarterly declaration (or other similar document or documents) made by such Guarantor in relation to that Collateral Vessel in accordance with the requirements of such protection and indemnity association; and

(d) a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to that Collateral Vessel.

13.8 Deposit of Original Policies. The relevant Guarantor shall ensure that all policies relating to obligatory Insurances are deposited with the approved brokers through which the Insurances are effected or renewed.

13.9 Payment of Premiums. The relevant Guarantor shall punctually pay all premiums or other sums payable in respect of the obligatory insurances and produce all relevant receipts when so required by the Security Trustee; provided, however, that should the relevant Guarantor fail to pay such premiums or other sums, the Security Trustee shall have the right but not the obligation to pay such premiums or other sums as it deems advisable in its sole discretion.

13.10 Guarantees. The relevant Guarantor shall ensure that any guarantees required by a protection and indemnity or war risks association are promptly issued and remain in full force and effect.

13.11 Compliance with Terms of Insurances. The relevant Guarantor shall neither do nor omit to do (nor permit to be done or not to be done) any act or thing which would or might render any obligatory Insurance invalid, void, voidable or unenforceable or render any sum payable under an obligatory Insurance repayable in whole or in part; and, in particular:

(a) the relevant Guarantor shall take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory Insurances, and (without limiting the obligation contained in Clause 13.6(c)) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Security Trustee has not given its prior approval;

(b) the relevant Guarantor shall not make any changes relating to the classification or classification society or manager or operator of the Collateral Vessel owned by it unless approved by the underwriters of the obligatory Insurances;

(c) the relevant Guarantor shall make (and promptly supply copies to the Agent of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Collateral Vessel owned by it is entered to maintain cover for trading to the United States of America’s Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and

(d) the relevant Guarantor shall not employ the Collateral Vessel owned by it, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory Insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.

13.12 Alteration to Terms of Insurances. The relevant Guarantor shall neither make nor agree to any alteration to the terms of any obligatory Insurance nor waive any right relating to any obligatory Insurance without the prior written consent of the Required Lenders (which consent shall not be unreasonably withheld, conditioned or delayed).

13.13 Settlement of Claims. The relevant Guarantor shall not settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty, and shall do all things necessary and provide all documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory Insurances.

13.14 Provision of Copies of Communications. The relevant Guarantor shall provide the Security Trustee, at the time of each such communication, copies of all written communications between such Security Party and:

(b) the approved insurance brokers;

(c) the approved protection and indemnity and/or war risks associations; and

(d) the approved insurance companies and/or underwriters, which relate directly or indirectly to:

(i) such Guarantor’s obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and

(ii) any credit arrangements made between such Guarantor and any of the persons referred to in paragraphs (a) or (b) relating wholly or partly to the effecting or maintenance of the obligatory insurances.

13.15 Provision of Information. In addition, the relevant Guarantor shall promptly provide the Security Trustee (or any persons which it may designate) with any information which the Security Trustee (or any such designated person) reasonably requests for the purpose of:

(a) obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or

(b) effecting, maintaining or renewing any such insurances as are referred to in Clause 13.16 or dealing with or considering any matters relating to any such Insurances; and the relevant Guarantor shall, forthwith upon demand, indemnify the Security Trustee in respect of all fees and other expenses incurred by or for the account of the Security Trustee in connection with any such report as is referred to in paragraph (a).

13.16 Mortgagee’s Interest, Additional Perils and Political Risk Insurances. The Security Trustee shall be entitled from time to time to effect, maintain and renew a mortgagee’s interest additional perils insurance, a mortgagee’s political risks insurance and a mortgagee’s interest marine insurance in such amounts (not to exceed 110% of the Loan), on such terms, through such insurers and generally in such manner as the Security Trustee may from time to time consider appropriate and the Borrower and each of the Guarantors shall upon demand fully indemnify the Security Trustee in respect of all premiums and other expenses which are incurred in connection with or with a view to effecting, maintaining or renewing any such insurance or dealing with, or considering, any matter arising out of any such insurance.

13.17 Review of Insurance Requirements. The Security Trustee may and, on instruction of the Required Lenders, shall review, at the expense of the Borrower and each of the Guarantors, the requirements of this Clause 13 from time to time in order to take account of any changes in circumstances after the date of this Agreement which are, in the reasonable opinion of the Agent or the Required Lenders significant and capable of affecting the relevant Guarantor or a Collateral Vessel and its insurance (including, without limitation, changes in the availability or the cost of insurance coverage or the risks to which the relevant Guarantor may be subject.)

13.18 Modification of Insurance Requirements. The Security Trustee shall notify the Borrower and each of the Guarantors of any proposed modification under Clause 13.17 to the requirements of this Clause 13 which the Security Trustee may or, on instruction of the Required Lenders, shall reasonably consider necessary and appropriate in the circumstances and such modification shall take effect on and from the date it is notified in writing to the Borrower as an amendment to this Clause 13 and shall bind the Borrower and each of the Guarantors accordingly.

13.19 Compliance with Instructions. The Security Trustee shall be entitled (without prejudice to or limitation of any other rights which it may have or acquire under any Finance Document) to require a Collateral Vessel to remain at any safe port or to proceed to and remain at any safe port designated by the Security Trustee until the relevant Guarantor implements any amendments to the terms of the obligatory insurances and any operational changes required as a result of a notice served under Clause 13.18.

14. COLLATERAL VESSEL COVENANTS

14.1 General. From the first Drawdown Date until the Total Commitments have terminated and all amounts payable hereunder have been paid in full, the Borrower and each of the Guarantors, as the case may be, undertakes with each Creditor Party to comply or cause compliance with the following provisions of this Clause 14, except as the Agent, with the consent of the Required Lenders, may approve from time to time in writing such consent not to be unreasonably withheld, conditioned or delayed, provided, however, that such consent and approval shall be subject always to Clauses 28.1 and 28.2 of this Agreement.

14.2 Collateral Vessel’s Name and Registration. Each Guarantor shall:

(i) keep the Collateral Vessel owned by it registered in its name under the law of an Approved Flag;

(j) not do, omit to do or allow to be done anything as a result of which such registration might be cancelled or imperiled; and

(k) not change the name or port of registry on which its Collateral Vessel was registered when it became subject to a Mortgage.

14.3 Repair and Classification. Each Guarantor shall keep the Collateral Vessel owned by it in class with the Classification Society and in a good and safe condition and state of repair:

(l) consistent with first-class ship ownership and management practice;

(m) so as to maintain the highest class for such Collateral Vessel with the Classification Society, free of any overdue recommendations and conditions affecting such Collateral Vessel’s class; and

(n) so as to comply with all laws and regulations applicable to vessels registered under the law of the Approved Flag on which such Collateral Vessel is registered or to vessels trading to any jurisdiction to which such Collateral Vessel may trade from time to time, including but not limited to the ISM Code and the ISPS Code, to the extent applicable in the discretion of the Agent.

14.4 Classification Society Instructions. The relevant Guarantor shall instruct the Classification Society referred to in Clause 14.3(b):

(i) to send to the Agent, following receipt of a written request from the Agent, copies of all original class records held by the Classification Society in relation to its Collateral Vessel;

(j) to allow the Security Trustee (or its agents), at any time and from time to time, to inspect the original class and related records of that Guarantor and its Collateral Vessel either (i) electronically (through the Classification Society directly or by way of indirect access via the Guarantor’s account manager and designating the Security Trustee as a user or administrator of the system under its account) or (ii) in person at the offices of the Classification Society, and to take copies of them electronically or otherwise;

(k) following receipt of a written request from the Security Trustee:

(i) to confirm that that Guarantor is not in default of any of its contractual obligations or liabilities to the Classification Society and, without limiting the foregoing, that it has paid in full all fees or other charges due and payable to the Classification Society; or

(ii) if that Guarantor is in default of any of its contractual obligations or liabilities to the Classification Society, to specify to the Security Trustee in reasonable detail the facts and circumstances of such default, the consequences of such default, and any remedy period agreed or allowed by the Classification Society.

14.5 Modification. No Guarantor shall make any modification or repairs to, or replacement of, the Collateral Vessel owned by it or equipment installed on such Collateral Vessel which would or is reasonably likely to materially negatively alter the structure, type or performance characteristics of such Collateral Vessel or materially reduce its value.

14.6 Removal of Parts. The relevant Guarantor shall not remove any material part owned by it from the Collateral Vessel owned by it, or any item of equipment owned by it installed on, that Collateral Vessel unless the part or item so removed has become obsolete or is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Security Interest or any right in favor of any person other than the Security Trustee and becomes on installation on that Collateral Vessel, the property of that Security Party and subject to the security constituted by the Mortgage, provided that the relevant Guarantor may install and remove equipment owned by a third party if the equipment can be removed without material damage to the Collateral Vessel owned by it.

14.7 Surveys. The relevant Guarantor shall submit the Collateral Vessel owned by it, at its sole expense, regularly to all periodical or other surveys which may be required for classification purposes and, if so required by the Security Trustee provide the Security Trustee, at such Guarantor’s expense, with copies of all survey reports.

14.8 Inspection. The relevant Guarantor shall permit the Security Trustee (by surveyors or other persons appointed by it for that purpose at the cost of such Guarantor) to board the Collateral Vessel owned by it up to once per year to inspect its condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections provided, however, that the Security Trustee shall be entitled to inspect the Ship owned by such Guarantor at any time following a Major Casualty (a “Post Casualty Inspection”) until the Collateral Vessel is repaired and such Post Casualty Inspection shall not constitute an annual inspection as provided herein and provided, further, that the first Post Casualty Inspection for such Collateral Vessel shall be at the cost of the relevant Guarantor and any subsequent Post Casualty Inspections related to such Major Casualty conducted by the Security Trustee shall be at its cost. The Security Trustee shall use reasonable endeavors to ensure that the operation of such Collateral Vessel is not adversely affected as a result of such inspections. Notwithstanding the foregoing, at any time after an Event of Default has occurred and is continuing the Security Trustee (by surveyors or other persons appointed by it at the cost of the Borrower and the relevant Guarantor) shall have the right to board the relevant Collateral Vessel at any time or place for any purpose.

14.9 Prevention of and Release from Arrest. The relevant Guarantor shall promptly discharge:

(a) all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against the Collateral Vessel owned by it, the Earnings or the Insurances;

(b) all taxes, dues and other amounts charged in respect of such Collateral Vessel, the Earnings or the Insurances; and

(c) all other accounts payable whatsoever in respect of such Collateral Vessel, the Earnings or the Insurances,

and, forthwith upon (and in any event, not more than 30 days after) receiving notice of the arrest of the Collateral Vessel owned by it, or of its detention in exercise or purported exercise of any lien or claim, the relevant Guarantor shall procure its release by providing bail or otherwise as the circumstances may require.

14.10 Compliance with Laws etc. The relevant Guarantor shall:

(e) comply, or procure compliance with the ISM Code, the ISPS Code, all Environmental Laws and all other applicable laws or regulations relating to the Collateral Vessel owned by it, its ownership, operation and management or to the business of such Guarantor;

(f) not employ the Collateral Vessel nor allow its employment in any manner contrary to any applicable law or regulation in any relevant jurisdiction including but not limited to the ISM Code and the ISPS Code; and

(g) in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit that Collateral Vessel to enter or trade to any zone which is declared a war zone by that Collateral Vessel’s war risks insurers unless the relevant Guarantor has (at its expense) effected any special, additional or modified insurance cover which its war risks insurers may require.

14.11 Provision of Information. The relevant Guarantor shall promptly provide the Security Trustee with any information which it requests regarding:

(c) the Collateral Vessel owned by it, its employment, position and engagements;

(d) the Earnings and payments and amounts due to such Collateral Vessel’s master and crew;

(e) any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of such Collateral Vessel and any payments made in respect of such Collateral Vessel;

(f) any towages and salvages;

(g) the relevant Guarantor’s, the Approved Manager’s or the Collateral Vessel’s compliance with the ISM Code and the ISPS Code; and

(h) the latest technical reports on such Collateral Vessel from the Approved Manager, and, upon the Security Trustee’s request, provide copies of any current charter and charter guarantee relating to the Collateral Vessel, and copies of the Guarantor’s or the Approved Manager’s Document of Compliance.

14.12 Notification of Certain Events. The relevant Guarantor shall immediately notify the Security Trustee by fax or email, confirmed forthwith by letter, of:

(d) any casualty which is or is likely to be or to become a Major Casualty;

(e) any occurrence as a result of which the Collateral Vessel owned by it has become or is, by the passing of time or otherwise, likely to become a Total Loss;

(f) any requirement or condition made by any insurer, Classification Society or by any competent authority which is not immediately complied with;

(g) any facts or matters that such Guarantor has knowledge of or becomes aware of which may result in or have resulted in a change, suspension, discontinuance, withdrawal, or expiry of such Collateral Vessel’s class under the rules or terms and conditions of such Guarantor’s or such Collateral Vessel’s membership in the Classification Society;

(h) any arrest or detention of the Collateral Vessel owned by it, any exercise or purported exercise of any Security Interest on that Collateral Vessel or the Earnings or any requisition of the Collateral Vessel for hire;

(i) any intended dry docking of the Collateral Vessel owned by it;

(j) any Environmental Claim in excess of $2,500,000 made against the relevant Guarantor or in connection with the Collateral Vessel owned by it, or any Environmental Incident in excess of $2,500,000;

(k) any claim for breach of the ISM Code or the ISPS Code being made against the Guarantor, the Approved Manager or otherwise in connection with the Collateral Vessel; or

(l) any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or the ISPS Code not being complied with;

and the relevant Guarantor shall keep the Security Trustee advised in writing on a regular basis and in such detail as the Security Trustee shall require of that Guarantor’s, the Approved Manager’s or any other person’s response to any of those events or matters.

14.13 Restrictions on Chartering, Appointment of Managers etc. The relevant Guarantor shall not unless consented to by the Agent or in the case of any Charter, the Required Lenders (such consent not to be unreasonably withheld, conditioned or delayed):

(e) let the Collateral Vessel owned by it on demise charter for any period;

(f) let the Collateral Vessel owned by it on any time or consecutive voyage charter for a term which exceeds, or which by virtue of any optional extension may exceed, 18 months;

(g) enter into any charter in relation to such Collateral Vessel under which more than two (2) months’ hire (or the equivalent) is payable in advance;

(h) charter such Collateral Vessel otherwise than on bona fide arm’s length terms at the time when the Collateral Vessel is fixed;

(i) appoint a manager of such Collateral Vessel other than the Approved Manager or agree to any material alteration to the material terms of the Approved Management Agreement, provided, however, that any manager so appointed including an Approved Manager appointed after the Effective Date shall enter into a manager’s undertaking in favor of the Security Trustee in form and substance acceptable to the Agent;

(j) de-activate or lay up the Collateral Vessel owned by it;

(k) change the Classification Society other than to another Classification Society; or

(l) put the Collateral Vessel owned by it in to the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $1,000,000 (or the equivalent in any other currency) unless that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any Security Interest on that Collateral Vessel or the Earnings for the cost of such work or for any other reason.

14.14 Notice of Mortgage. The relevant Guarantor shall keep the Mortgage registered against the Collateral Vessel owned by it as a valid first preferred mortgage, carry on board the Collateral Vessel owned by it a certified copy of the Mortgage and place and maintain in a conspicuous place in the navigation room and the Master’s cabin of the Collateral Vessel a framed printed notice stating that the Collateral Vessel is mortgaged by such Guarantor to the Security Trustee.

14.15 ISPS Code. The relevant Guarantor shall comply with the ISPS Code and in particular, without limitation, shall:

(c) procure that the Collateral Vessel owned by it and the company responsible for the Collateral Vessel’s compliance with the ISPS Code comply with the ISPS Code; and

(d) maintain for such Collateral Vessel an ISSC; and

(e) notify the Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC.

15. SECURITY MAINTENANCE COVER RATIO

15.1 General. From the first Drawdown Date of an Advance until the Total Commitments have terminated and all amounts payable hereunder have been paid in full, the Borrower undertakes with each Creditor Party to comply with the following provisions of this Clause 15 except as the Agent, with the consent of all Lenders, may approve from time to time in writing, such approval not to be unreasonably withheld, conditioned or delayed.

15.2 Security Maintenance Cover Ratio. If, at any time, the Agent notifies the Borrower that the ratio of:

(o) the aggregate Fair Market Value of the Collateral Vessels delivered to the Guarantors; plus

(p) the net realizable value of any additional Collateral previously provided under this Clause 15, to:

(q) the Advances of the Loan relating to such Collateral Vessels;

(such ratio being the “Security Maintenance Cover Ratio”) is below the SMC Threshold, the Agent shall require the Borrower to comply with the requirements of Clause 15.3, unless otherwise agreed by all Lenders. For the purpose of this Clause 15.2, the “SMC Threshold” means 140% of the outstanding principal balance of the Loan.

15.3 Provision of Additional Security; Prepayment. When the Agent serves a notice on the Borrower under Clause 15.2, the Borrower shall, within thirty (30) days after the date on which the Agent’s notice is served, either:

(l) provide, or ensure that a third party provides, additional Collateral which, in the reasonable opinion of the Lenders, is in form and substance acceptable to the Lenders and has a net realizable value at least equal to the shortfall and is documented in such terms as may be reasonably satisfactory to the Security Trustee acting with the authorization of all Lenders (it being understood that cash collateral comprised of U.S. Dollars is satisfactory and that it shall be valued at par); or

(m) prepay the Loan in such amount as will eliminate the shortfall.

15.4 Value of Additional Vessel Security. The net realizable value of any additional Collateral which is provided under Clause 15.3 and which consists of a Security Interest over a vessel shall be that shown by a valuation complying with the definition of Fair Market Value.

15.5 Valuations Binding. Any valuation under Clause 15.3 or 15.4 shall be binding and conclusive as regards the Borrower and the Lenders, as shall be any valuation which the Agent makes of any additional security which does not consist of or include a Security Interest.

15.6 Provision of Information. The Borrower shall promptly provide the Agent and any Approved Broker or other expert acting under Clause 15.4 with any information which the Agent or the Approved Broker or other expert may request for the purposes of the valuation; and, if the Borrower fails to provide the information by the date specified in the request, the valuation may be made on any basis and assumptions which the Approved Broker or the Agent (or the expert appointed by the Agent) consider prudent.

15.7 Payment of Valuation Expenses. Without prejudice to the generality of the Borrower’s obligations under Clauses 21.2, 21.3 and 22.3, the Borrower shall, on demand, pay the Agent the amount of the fees and expenses of any Approved Broker or other expert instructed by the Agent under this Clause 15 and all legal and other expenses incurred by any Creditor Party in connection with any matter arising out of Clause 15.3 or 15.4.

15.8 Application of Prepayment. Clause 8 shall apply in relation to any prepayment pursuant to Clause 15.3(b).

16. GUARANTEE

16.1 Guarantee and Indemnity. In order to induce the Lenders to make the Loan to the Borrower, each of the Guarantors, jointly and severally, irrevocably and unconditionally:

(r) guarantees, as a primary obligor and not merely as a surety, to each Creditor Party, the punctual payment and performance by the Borrower when due, whether at stated maturity, by acceleration or otherwise, of all Secured Liabilities of the Borrower, whether for principal, interest, fees, expenses or otherwise (collectively, the “Guaranteed Obligations”);

(s) undertakes with each Creditor Party that whenever the Borrower does not pay any Guaranteed Obligation when due, the Guarantors shall immediately on demand pay that Guaranteed Obligation as if they were the primary obligors; and

(t) indemnifies each Creditor Party immediately on demand against any cost, loss or liability suffered or incurred by that Creditor Party (i) if any Guaranteed Obligation is or becomes unenforceable, invalid or illegal or (ii) by operation of law as a consequence of the transactions contemplated by the Finance Documents. The amount of the cost, loss or liability shall be equal to the amount which that Creditor Party would otherwise have been entitled to recover.

16.2 Continuing Guarantee. This guarantee:

(n) is a continuing guarantee;

(o) is joint and several with any other guarantee given in respect of the Guaranteed Obligations and shall not in any way be prejudiced by any other guarantee or security now or subsequently held by any Creditor Party in respect of the Guaranteed Obligations;

(p) shall remain in full force and effect until the later of the termination of the Total Commitments and the payment and performance in full of the Guaranteed Obligations and all other amounts payable hereunder regardless of any intermediate payment or discharge in whole or in part;

(q) shall be binding upon the Guarantor, its successors and permitted assigns; and

(r) is a guarantee of payment not collection.

16.3 Performance of Guaranteed Obligations; Obligations pari passu.

(m) Each of the Guarantors agrees that the Guaranteed Obligations will be performed and paid strictly in accordance with the terms of the relevant Finance Document regardless of any law or regulation or order of any court:

(iii) affecting (A) any term of such Finance Document or the rights of any of the Creditor Parties with respect thereto or (B) the Borrower’s ability or obligation to make or render, or right of any Creditor Party to receive, any payments or performance due thereunder; or

(iv) which might otherwise constitute a defense to, or a legal or equitable discharge of, the Borrower.

(n) The obligations of each of the Guarantors under this guarantee shall rank pari passu with all other unsecured obligations of such Guarantor.

16.4 Reinstatement. If any payment of any of the Guaranteed Obligations is rescinded, discharged, avoided or reduced or must otherwise be returned by a Creditor Party or any other person upon the insolvency, bankruptcy or reorganization of the Borrower or any other Security Party or otherwise:

(e) this guarantee shall continue to be effective or be reinstated, and the liability of each of the Guarantors hereunder shall continue or be reinstated, as the case may be, as if the payment, discharge, avoidance or reduction had not occurred; and

(f) each Creditor Party shall be entitled to recover the value or amount of that payment from any of the Guarantors, as if the payment, discharge, avoidance or reduction had not occurred.

16.5 Liability Absolute and Unconditional. The obligations of each of the Guarantors under this Clause 16 shall be irrevocable, absolute and unconditional and shall 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 16, and each of the Guarantors hereby irrevocably waives any defenses it may now have or hereafter acquire in any way relating to, any or all of the following:

(f) any time, waiver or consent granted to, or composition with, any Security Party or other person;

(g) the release of any other Security Party or any other person under the terms of any composition or arrangement with any creditor of any Security Party;

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

(i) any incapacity or lack of power, authority or legal personality of or dissolution or change in the corporate or company structure or status of a Security Party or any other person (including without limitation any change in the holding of such Security Party’s or other person’s Equity Interests);

(j) any amendment to or replacement of a Finance Document or any other document or security;

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

(l) any bankruptcy, insolvency or similar proceedings; or

(m) any other circumstance whatsoever that might otherwise constitute a defense available to, or a legal or equitable discharge of, any Security Party.

16.6 Waiver of Promptness, etc. Each of the Guarantors hereby unconditionally and irrevocably waives promptness, diligence, notice of acceptance, presentment, demand for performance, notice of non-performance, default, acceleration, protest or dishonor and any other notice with respect to any of the Guaranteed Obligations and this guarantee and any requirement that a Creditor Party protect, secure, perfect or insure any Security Interest or any property subject thereto or exhaust any right or take any action against any Security Party or any other person or entity or any Collateral.

16.7 Waiver of Revocation, etc. Each of the Guarantors hereby unconditionally and irrevocably waives any right to revoke this guarantee.

16.8 Waiver of Certain Defenses. Each of the Guarantors hereby unconditionally and irrevocably waives:

(h) any defense arising by reason of any claim or defense based upon an election of remedies by a Creditor Party that in any manner impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement, exoneration, contribution or indemnification rights of such Guarantor or other rights of such Guarantor to proceed against the Borrower, any of the other Security Parties, any other guarantor or any other person or entity or any Collateral; and

(i) any defense based on any right of set-off or counterclaim against or in respect of the obligations of such Guarantor hereunder.

16.9 Waiver of Disclosure, etc. Each of the Guarantors hereby unconditionally and irrevocably waives any duty on the part of any Creditor Party to disclose to such Guarantor any matter, fact or thing relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower, any other Security Party or any of their respective subsidiaries now or hereafter known by any Creditor Party.

16.10 Immediate Recourse. Each of the Guarantors waives any right it may have of first requiring any Creditor Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from such Guarantor under this Clause 16. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

16.11 Acknowledgment of Benefits. Each of the Guarantors acknowledges that it will receive substantial direct and indirect benefits from the financing arrangements contemplated by the Finance Documents and that the waivers set forth in this Clause 16 are knowingly made in contemplation of such benefits.

16.12 Independent Obligations. The obligations of each of the Guarantors under or in respect of this guarantee are independent of the Guaranteed Obligations or any other obligations of the Borrower or any other Security Party under or in respect of the Finance Documents, and a separate action or actions may be brought and prosecuted against each Guarantor to enforce this guarantee irrespective of whether any action is brought against the Borrower or any other Security Party or whether the Borrower or any other Security Party is joined in any such action or actions.

16.13 Deferral of Guarantor’s Rights. Until the Guaranteed Obligations have been irrevocably paid and performed in full and unless the Agent otherwise directs, each of the Guarantors will not exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents:

(f) to be indemnified by another Security Party;

(g) to claim any contribution from any other guarantor of any Security Party’s obligations under the Finance Documents; and/or

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

16.14 Limitation of Liability. Each of the Guarantors and each of the Creditor Parties hereby confirms that it is its intention that the Guaranteed Obligations do not constitute a fraudulent transfer or conveyance for purposes of the United States Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar law. To effectuate the foregoing intention, each of the Guarantors and each of the Creditor Parties hereby irrevocably agrees that the Guaranteed Obligations guaranteed by each of the Guarantors shall be limited to such amount as will, after giving effect to such maximum amount and all other (contingent or otherwise) liabilities of such Guarantor that are relevant under such laws, result in the Guaranteed Obligations of such Guarantor in respect of such maximum amount not constituting a fraudulent transfer or conveyance.

16.15 Reliance of Creditor Parties. Each of the Creditor Parties has entered into this Agreement in reliance upon, among other things, this guarantee.

17. PAYMENTS AND CALCULATIONS

17.1 Currency and Method of Payments. All payments to be made by the Lenders or by the Security Parties under a Finance Document shall be made to the Agent or to the Security Trustee, in the case of an amount payable to it:

(s) by not later than 11:00 a.m. (Hamburg time) on the due date;

(t) in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Agent shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement);

(u) in the case of an amount payable by a Lender to the Agent or by another Security Party to the Agent or any Lender, to the account of the Agent as the Agent may from time to time notify to the Borrower, the other Security Parties and the other Creditor Parties; and

(v) in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Borrower and the other Creditor Parties.

17.2 Payment on Non-Business Day. If any payment by any Security Party under a Finance Document would otherwise fall due on a day which is not a Business Day:

(o) the due date shall be extended to the next succeeding Business Day; or

(p) if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day;

and interest shall be payable during any extension under paragraph (a) at the rate payable on the original due date.

17.3 Basis for Calculation of Periodic Payments. All interest, commitment fee and any other payments under any Finance Document which are of an annual or periodic nature shall accrue from day to day and shall be calculated on the basis of the actual number of days elapsed and a 360 day year.

17.4 Distribution of Payments to Creditor Parties. Subject to Clauses 17.5, 17.6 and 17.7

(n) any amount received by the Agent under a Finance Document for distribution or remittance to a Lender or the Security Trustee shall be made available by the Agent to that Lender or, as the case may be, the Security Trustee by payment, with funds having the same value as the funds received, to such account as the Lender or the Security Trustee may have notified to the Agent not less than five (5) Business Days previously; and

(o) amounts to be applied in satisfying amounts of a particular category which are due to the Lenders generally shall be distributed by the Agent to each Lender pro rata to the amount in that category which is due to it.

17.5 Permitted Deductions by Agent. Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent may, before making an amount available to a Lender, deduct and withhold from that amount any sum which is then due and payable to the Agent from that Lender under any Finance Document or any sum which the Agent is then entitled under any Finance Document to require that Lender to pay on demand.

17.6 Agent Only Obliged to Pay When Monies Received. Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent shall not be obliged to make available to the Borrower or any Lender any sum which the Agent is expecting to receive for remittance or distribution to the Borrower or that Lender until the Agent has satisfied itself that it has received that sum.

17.7 Refund to Agent of Monies Not Received. If and to the extent that the Agent makes available a sum to the Borrower or a Lender, without first having received that sum, the Borrower or (as the case may be) the Lender concerned shall, on demand:

(j) refund the sum in full to the Agent; and

(k) pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the Agent as a result of making the sums available before receiving it.

17.8 Agent May Assume Receipt. Clause 17.7 shall not affect any claim which the Agent has under the law of restitution, and applies irrespective of whether the Agent had any form of notice that it had not received the sum which it made available.

17.9 Creditor Party Accounts. Each Creditor Party shall maintain accounts showing the amounts owing to it by the Borrower and each other Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrower and any other Security Party.

17.10 Agent’s Memorandum Account. The Agent shall maintain a memorandum account showing the amounts advanced by the Lenders and all other sums owing to the Agent, the Security Trustee and each Lender from the Borrower and each other Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrower and any other Security Party.

17.11 Accounts Prima Facie Evidence. If any accounts maintained under Clauses 17.9 and 17.10 show an amount to be owing by the Borrower or any other Security Party to a Creditor Party, those accounts shall be prima facie evidence that that amount is owing to that Creditor Party.

18. APPLICATION OF RECEIPTS

18.1 Normal Order of Application. Except as any Finance Document may otherwise provide, any sums which are received or recovered by any Creditor Party under or by virtue of any Finance Document shall be applied:

(q) FIRST: in or towards satisfaction of any amounts then due and payable under the Finance Documents in the following order and proportions:

(i) first, in or towards satisfaction pro rata of all amounts then due and payable to the Creditor Parties under the Finance Documents other than those amounts referred to at paragraphs (ii) and (iii) (including, but without limitation, all amounts payable by the Borrower under Clauses 21, 22 and 23 of this Agreement or by the Borrower or any other Security Party under any corresponding or similar provision in any other Finance Document);

(ii) second, in or towards satisfaction pro rata of any and all amounts of interest or default interest payable to the Creditor Parties under the Finance Documents; and

(iii) third, in or towards satisfaction pro rata of any and all amounts of principal payable to the Lenders under this Agreement;

(r) SECOND: in retention of an amount equal to any amount not then due and payable under any Finance Document but which the Agent, by notice to the Borrower, the other Security Parties and the other Creditor Parties, states in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of Clause 18.1(a); and

(s) THIRD: any surplus shall be paid to the Borrower or to any other person appearing to be entitled to it.

18.2 Variation of Order of Application. The Agent may, with the authorization of all Lenders, by notice to the Borrower, the other Security Parties and the other Creditor Parties provide for a different manner of application from that set out in Clause 18.1 either as regards a specified sum or sums or as regards to sums in a specified category or categories.

18.3 Notice of Variation of Order of Application. The Agent may give notices under Clause 18.2 from time to time; and such a notice may be stated to apply not only to sums which may be received or recovered in the future, but also to any sum which has been received or recovered on or after the third Business Day before the date on which the notice is served.

18.4 Appropriation Rights Overridden. This Clause 18 and any notice which the Agent gives under Clause 18.2 shall override any right of appropriation possessed, and any appropriation made, by the Borrower or any other Security Party.

18.5 Payments in Excess of Contribution.

(d) If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, counterclaim or otherwise) in excess of its Contribution, such Lender shall forthwith purchase from the other Lenders such participation in their respective Contributions as shall be necessary to share the excess payment ratably with each of them, provided that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each other Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such Lender’s ratable share (according to the proportion of (a) the amount of such Lender’s required repayment to (b) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered.

(e) The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Clause 18.5 may, to the fullest extent permitted by law, exercise all of its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation.

(f) Notwithstanding paragraphs (a) and (b) of this Clause 18.5, any Lender which shall have commenced or joined (as a plaintiff) in an action or proceeding in any court to recover sums due to it under any Finance Document and pursuant to a judgment obtained therein or a settlement or compromise of that action or proceeding shall have received any amount, such Lender shall not be required to share any proportion of that amount with a Lender which has the legal right to, but does not, join such action or proceeding or commence and diligently prosecute a separate action or proceeding to enforce its rights in the same or another court.

(g) Each Lender exercising or contemplating exercising any rights giving rise to a receipt or receiving any payment of the type referred to in this Clause 18.5 or instituting legal proceedings to recover sums owing to it under this Agreement shall, as soon as reasonably practicable thereafter, give notice thereof to the Agent who shall give notice to the other Lenders.

19. APPLICATION OF EARNINGS, SALES PROCEEDS AND INSURANCE PROCEEDS

19.1 General. From the first Drawdown Date until the Total Commitments have terminated and all amounts payable hereunder have been paid in full, the Borrower and each of the Guarantors undertakes with each Creditor Party to comply or cause compliance with the following provisions of this Clause 19 except as the Agent, with the consent of the Required Lenders, may approve from time to time in writing, such approval not to be unreasonably withheld, conditioned or delayed.

19.2 Payment of Earnings. The Borrower and each of the Guarantors undertakes with each Creditor Party to ensure that subject only to the provisions of any Charter Assignment or Earnings Assignment, all of the Earnings of each Collateral Vessel are paid to the relevant Earnings Account.

19.3 Location of Accounts. The Borrower and each of the Guarantors shall promptly:

(a) comply with any requirement of the Agent as to the location or re-location of each Earnings Account; and

(b) execute an Earnings Account Pledge with respect to each Earnings Account and/or any other documents which the Agent specifies to create or maintain in favor of the Security Trustee a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) any of the Earnings Accounts.

19.4 Borrower’s Obligations Unaffected. The provisions of this Clause 19 do not affect:

(h) the liability of the Borrower to make payments of principal and interest on the due dates; or

(i) any other liability or obligation of the Borrower or any other Security Party under any Finance Document.

19.5 Use of Proceeds in Earnings Accounts. Unless and until an Event of Default occurs, the Earnings of each Collateral Vessel shall be freely available to the respective account holder.

20. EVENTS OF DEFAULT

20.1 Events of Default. An Event of Default occurs if:

(p) the Borrower or any other Security Party fails to pay when due any principal or interest payable under a Finance Document or under any document relating to a Finance Document, unless its failure to pay is caused by a technical or administrative error and payment is made within three (3) Business Days of its due date, or, in the case of all other amounts and sums payable on demand, within five (5) Business Days after the date when first demanded; or

(q) any breach occurs of any of Clauses 8.9, 9.2, 10.20, 11.1(l), 11.1(s), 11.2(b), 11.2(p), 13 or 15.3; or

(r) any breach by the Borrower or any other Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a), (b), (e) or (m) of this Clause 20.1) which, in the opinion of the Agent acting on behalf of the Required Lenders, is capable of remedy, and such default continues unremedied 30 days after written notice from the Agent requesting action to remedy the same; or

(s) (subject to any applicable grace period specified in the Finance Document) any breach by the Borrower or any other Security Party occurs of any provision of a Finance Document (other than a breach falling within paragraphs (a), (b), (c) or (e) of this Clause 20.1); or

(t) any representation, warranty or statement made or repeated by, or by an officer or director of, the Borrower or any other Security Party in a Finance Document or in the Drawdown Notice or any other notice or document relating to a Finance Document is untrue or misleading in any material respect when it is made or repeated; or

(u) a material event of default, or an event or circumstance which, with the giving of any notice, the lapse of time or both would constitute an event of default, has occurred on the part of a Security Party under any contract or agreement in excess of $5,000,000 (other than the Finance Documents) to which such Security Party is a party, and such event of default has not been cured within any applicable grace period;

(v) any Financial Indebtedness of a Security Party in excess of $5,000,000 is not paid when due (or if there is an applicable grace period within such applicable grace period) or, only in the case of sums payable on demand, when first demanded, except for any such Financial Indebtedness which is being contested by such Security Party in good faith and through appropriate proceedings and in a manner that does not involve any risk of sale, forfeiture, loss, confiscation or seizure of the Collateral Vessel owned by such Security Party; or

(w) the Borrower or any of the Guarantors shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or

(x) any proceeding shall be instituted by or against the Borrower or any of the Guarantors seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property, and solely in the case of an involuntary proceeding:

(i) such proceeding shall remain undismissed or unstayed for a period of 60 days; or

(ii) any of the actions sought in such involuntary proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantial part of its property) shall occur; or

(y) all or a material part of the undertakings, assets, rights or revenues of, or shares or other ownership interest in, any Security Party are seized, nationalized, expropriated or compulsorily acquired by or under authority of any government provided that, in the reasonable opinion of the Agent (acting with the authorization of the Required Lenders), such occurrence would adversely affect any Security Party’s ability to perform its obligations under the Finance Documents to which it is a party; or

(z) a creditor attaches or takes possession of, or a distress, execution, sequestration or process (each an “action”) is levied or enforced upon or sued out against, a material part of the undertakings, assets, rights or revenues (the “assets”) of any Security Party in relation to a claim by such creditor which, in the reasonable opinion of the Required Lenders, is likely to materially and adversely affect the ability of such Security Party to perform all or any of its material obligations under or otherwise to comply with the terms of any Finance Document to which it is a party and such Security Party does not procure that such action is lifted, released or expunged within 30 Business Days of such action being (i) instituted and (ii) notified to such Security Party; or

(aa) the Borrower or any Guarantor ceases or suspends or threatens to cease or suspend the carrying on of its business, except in the case of a sale or a proposed sale of a Collateral Vessel by a Guarantor that owns such Collateral Vessel; or

(bb) a Collateral Vessel becomes a Total Loss or suffers a Major Casualty and (i) in the case of a Total Loss, insurance proceeds are not collected or received by the Security Trustee from the underwriters or the Borrower has not repaid the Advance relating to the lost Collateral Vessel within 180 days of the Total Loss Date or (ii) in the case of a Major Casualty, such Collateral Vessel has not been otherwise repaired in a proper fashion; or

(cc) it becomes unlawful or impossible:

(i) for any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Required Lenders consider material under a Finance Document;

(ii) for the Agent, the Security Trustee or the Lenders to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or

(dd) any consent necessary to enable any of the Guarantors to own, operate or charter the Collateral Vessel owned by it or to enable the Borrower or any other Security Party to comply with any provision of a Finance Document which the Required Lenders consider material or a Charter is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent is not fulfilled; or

(ee) any material provision of a Finance Document proves to have been or becomes invalid or unenforceable, or a Security Interest created by a Finance Document proves to have been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest;

(ff) an event or series of events occurs which, in the reasonable opinion of the Required Lenders, may have a Material Adverse Effect; or

(gg) an ERISA Funding Event or an ERISA Termination Event has occurred and is continuing which, in the reasonable opinion of the Required Lenders, could reasonably be expected to result in a material adverse effect on the Security Parties’ business, assets or financial conditions or which may affect the legality, validity, binding effect and/or enforceability of any of the Finance Documents; or

(hh) the Borrower and/or any of the Guarantors fails (within ten (10) business days after being obliged to do so) to comply with or pay any sum in an amount exceeding $2,500,000 (or the equivalent in any other currency) due from it under any final judgment or any final order (being one against which there is no right of appeal or if a right of appeal exists the time limit for making such appeal has expired and no appeal has been made or if an appeal has been made such appeal has been dismissed) made or given by any court of competent jurisdiction, provided, however, that such event shall not be deemed to constitute an Event of Default if the Borrower is entitled to insurance cover for the whole of such sum and the relevant insurers have confirmed liability and undertaken to make payment of the whole of such sum in writing to the person(s) entitled to payment and it is likely (in the reasonable opinion of the Required Lenders) that the insurers will be able to make such payment within thirty (30) days.

20.2 Actions Following an Event of Default. On, or at any time after, the occurrence of an Event of Default (after the expiration of any applicable grace periods):

(c) the Agent may, and if so instructed by the Required Lenders, the Agent shall:

(i) serve on the Borrower a notice stating that the Commitments and all other obligations of each Lender to the Borrower under this Agreement are cancelled; and/or

(ii) serve on the Borrower a notice stating that the Loan, all accrued interest and all other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand, provided that in the case of an Event of Default under either of Clauses 20.1(h) or (i), the Loan and all accrued interest and other amounts accrued or owing hereunder shall be deemed immediately due and payable without notice or demand therefor; and/or

(iii) take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii), the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law; and/or

(d) the Security Trustee may, and if so instructed by the Agent, acting with the authorization of the Required Lenders, the Security Trustee shall, take any action which, as a result of the Event of Default or any notice served under paragraph (a) (i) or (ii), the Security Trustee, the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law.

20.3 Termination of Commitments. On the service of a notice under Clause 20.2(a)(i), the Commitments and all other obligations of each Lender to the Borrower under this Agreement shall be cancelled.

20.4 Acceleration of Loan. On the service of a notice under Clause 20.2(a)(ii), the Loan, all accrued interest and all other amounts accrued or owing from the Borrower or any other Security Party under this Agreement and every other Finance Document shall become immediately due and payable or, as the case may be, payable on demand, and the Security Trustee shall forthwith be entitled to enforce the Security Interests created by this Agreement and any other Finance Document in any manner available to it and in such sequence as the Security Trustee may, in its absolute discretion, determine.

20.5 Multiple Notices; Action Without Notice. The Agent may serve notices under Clauses 20.2(a)(i) and (ii) simultaneously or on different dates and it and/or the Security Trustee may take any action referred to in Clause 20.2 if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.

20.6 Notification of Creditor Parties and Security Parties. The Agent shall send to each Lender, the Security Trustee and each Security Party a copy of the text of any notice which the Agent serves on the Borrower under Clause 20.2. Such notice shall become effective when it is served on the Borrower, and no failure or delay by the Agent to send a copy or the text of the notice to any other person shall invalidate the notice or provide the Borrower or any Security Party with any form of claim or defense.

20.7 Creditor Party Rights Unimpaired. Nothing in this Clause shall be taken to impair or restrict the exercise of any right given to individual Lenders under a Finance Document or the general law; and, in particular, this Clause is without prejudice to Clause 3.1.

20.8 Exclusion of Creditor Party Liability. No Creditor Party, and no receiver or manager appointed by the Security Trustee, shall have any liability to any Security Party:

(c) for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or

(d) as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realized from any asset comprised in such a Security Interest or for any reduction (however caused) in the value of such an asset,

provided that nothing in this Clause 20.8 shall exempt a Creditor Party or a receiver or manager from liability for losses shown to have been caused by the gross negligence or the willful misconduct of such Creditor Party’s own officers and employees or (as the case may be) such receiver’s or manager’s own partners or employees.

21. FEES AND EXPENSES

21.1 Arrangement, Commitment and Up-Front Fees. The Borrower shall pay to the Agent:

(e) for the account of the Lead Arranger an upfront arrangement fee in the amount of $567,000 which shall be payable on the Effective Date;

(f) quarterly in arrears during the period from (and including) the Effective Date until the undrawn portion of the Total Commitments is permanently reduced to zero, for the account of the Lenders, a commitment fee at the rate of 1.12% per annum on the amount of the Total Commitments less the amount of the Loan, for distribution among the Lenders pro rata to their Commitments; and

(g) for the account of the Agent an annual agency fee in the amount of $30,000 payable on the Effective Date and thereafter on each anniversary of the Effective Date, provided, however, that such annual agency fee shall be payable only if the Loan is syndicated.

21.2 Costs of Negotiation, Preparation, etc. The Borrower shall pay to the Agent on its demand the amount of all expenses incurred by the Agent or the Security Trustee in connection with the negotiation, preparation, execution or registration of any Finance Document or any related document or with any transaction contemplated by a Finance Document or a related document, including, without limitation, the reasonable fees and disbursements of a Creditor Party’s legal counsel and any local counsel retained by them.

21.3 Costs of Variations, Amendments, Enforcement, etc. The Borrower shall pay to the Agent, on the Agent’s demand, for the account of the Creditor Party concerned, the amount of all expenses incurred by a Creditor Party in connection with:

(l) any amendment or supplement to a Finance Document, or any proposal for such an amendment to be made;

(m) any consent or waiver by the Lenders, the Required Lenders or the Creditor Party concerned under or in connection with a Finance Document, or any request for such a consent or waiver;

(n) the valuation of any Collateral provided or offered under Clause 15 or any other matter relating to such Collateral; or

(o) any step taken by the Security Trustee, a Lender with a view to the protection, exercise or enforcement of any right or Security Interest created by a Finance Document or for any similar purpose.

There shall be recoverable under paragraph (d) the full amount of all reasonable legal expenses, whether or not such as would be allowed under rules of court or any taxation or other procedure carried out under such rules.

21.4 Documentary Taxes. The Borrower shall promptly pay any tax payable on or by reference to any Finance Document, and shall, on the Agent’s demand, fully indemnify each Creditor Party against any claims, expenses, liabilities and losses resulting from any failure or delay by the Borrower to pay such a tax.

21.5 Certification of Amounts. A notice which is signed by an officer of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 21 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.

22. INDEMNITIES

22.1 Indemnities Regarding Borrowing and Repayment of Loan. The Borrower shall fully indemnify the Agent and each Lender on the Agent’s demand and the Security Trustee on its demand in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Creditor Party, or which that Creditor Party reasonably and with due diligence estimates that it will incur, as a result of or in connection with:

(j) the Advance not being borrowed on the date specified in the Drawdown Notice for any reason other than a default by the Lender claiming the indemnity;

(k) the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on the last day of an Interest Period or other relevant period;

(l) any failure (for whatever reason) by the Borrower to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the Borrower on the amount concerned under Clause 7); or

(m) the occurrence of an Event of Default and/or the acceleration of repayment of the Loan under Clause 20.

It is understood that the indemnities provided in this Clause 22.1 shall not apply to any claim cost or expense which is a tax levied by a taxing authority on the indemnified party (which taxes are subject to indemnity solely as provided in Clause 23 below) but shall apply to any other costs associated with any tax which is not a Non-indemnified Tax.

22.2 Breakage Costs. Without limiting its generality, Clause 22.1 covers any quantifiable and customary actual claim, expense, liability or loss incurred by a Lender in liquidating or employing deposits from third parties acquired or arranged to fund or maintain all or any part of its Contribution and/or any overdue amount (or an aggregate amount which includes its Contribution or any overdue amount) for which reasonable evidence of calculations has been provided to the Borrower.

22.3 Miscellaneous Indemnities. The Borrower shall fully indemnify each Creditor Party severally on their respective demands in respect of all claims, expenses, liabilities and losses which may be made or brought against or incurred by a Creditor Party, in any country, as a result of or in connection with:

(i) any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Agent, the Security Trustee or any other Creditor Party or by any receiver appointed under a Finance Document; or

(j) any other Pertinent Matter,

other than claims, expenses, liabilities and losses which are shown to have been caused by the dishonesty or willful misconduct or gross negligence of the officers or employees of the Creditor Party concerned.

Without prejudice to its generality, this Clause 22.3 covers any claims, expenses, liabilities and losses which arise, or are asserted, under or in connection with any law relating to safety at sea, the ISM Code, the ISPS Code or any Environmental Law.

22.4 Currency Indemnity. If any sum due from the Borrower or any other Security Party to a Creditor Party under a Finance Document or under any order or judgment relating to a Finance Document has to be converted from the currency in which the Finance Document provided for the sum to be paid (the “Contractual Currency”) into another currency (the “Payment Currency”) for the purpose of:

(m) making or lodging any claim or proof against the Borrower or any other Security Party, whether in its liquidation, any arrangement involving it or otherwise; or

(n) obtaining an order or judgment from any court or other tribunal; or

(o) enforcing any such order or judgment,

the Borrower shall indemnify the Creditor Party concerned against the loss arising when the amount of the payment actually received by that Creditor Party is converted at the available rate of exchange into the Contractual Currency.

In this Clause 22.4, the “available rate of exchange” means the rate at which the Creditor Party concerned is able at the opening of business (London time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.

This Clause 22.4 creates a separate liability of the Borrower which is distinct from its other liabilities under the Finance Documents and which shall not be merged in any judgment or order relating to those other liabilities.

22.5 Certification of Amounts. A notice which is signed by an officer of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 22 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.

22.6 Sums Deemed Due to a Lender. For the purposes of this Clause 22, a sum payable by the Borrower to the Agent or the Security Trustee for distribution to a Lender shall be treated as a sum due to that Lender.

22.7 Survival of Indemnities. All indemnities provided by the Borrower under this Clause 22 shall survive the termination of this Agreement.

23. NO SET-OFF OR TAX DEDUCTION; TAX INDEMNITY; FATCA

23.1 No Deductions. All amounts due from a Security Party under a Finance Document shall be paid:

(p) without any form of set-off, cross-claim or condition; and

(q) free and clear of any tax deduction except a tax deduction which such Security Party is required by law to make.

23.2 Grossing-Up for Taxes. If a Security Party is required by law to make a tax deduction from any payment:

(k) such Security Party shall notify the Agent as soon as it becomes aware of the requirement;

(l) such Security Party shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises; and

(m) except if the deduction is for collection or payment of a Non-indemnified Tax of a Creditor Party, the amount due in respect of the payment shall be increased by the amount necessary to ensure that each Creditor Party receives and retains (free from any liability relating to the tax deduction) a net amount which, after the tax deduction, is equal to the full amount which it would otherwise have received.

23.3 Evidence of Payment of Taxes. Within one (1) month after making any tax deduction, the relevant Security Party shall deliver to the Agent documentary evidence satisfactory to the Agent that the tax had been paid to the appropriate taxation authority.

23.4 Indemnity for Taxes. The Borrower hereby indemnifies and agree to hold each Creditor Party harmless from and against all taxes other than Non-indemnified Taxes levied on such Creditor Party (including, without limitation, taxes imposed on any amounts payable under this Clause 23.4) paid or payable by such person, whether or not such taxes or other taxes were correctly or legally asserted. Such indemnification shall be paid within 10 days from the date on which such Creditor Party makes written demand therefore specifying in reasonable detail the nature and amount of such taxes or other taxes.

23.5 Exclusion from Indemnity and Gross-Up for Taxes. The Borrower shall not be required to indemnify any Creditor Party for a tax pursuant to Clause 23.4, or to pay any additional amounts to any Creditor Party pursuant to Clause 23.2, to the extent that the tax is collected by withholding on payments (a “Withholding”) and is levied by a Pertinent Jurisdiction of the payer and:

(e) the person claiming such indemnity or additional amounts was not an original party to this agreement and under applicable law (after taking into account relevant treaties and assuming that such person has provided all forms it may legally and truthfully provided) on the date such person became a party to this Agreement a Withholding would have been required on such payment provided that this exclusion shall not apply to the extent such Withholding does not exceed the Withholding that would have been applicable if such payment had been made to the person from whom such person acquired its rights under the Agreement and this exclusion shall not apply to the extent that such Withholding exceeds the amount of Withholding that would have been required under the law in effect on the date such person became a party to this Agreement; or

(f) the person claiming such indemnity or additional amounts is a Lender who has changed its Lending Office and under applicable law (after taking into account relevant treaties and assuming that such Lender has provided all forms it may legally and truthfully provide) on the date such Lender changed its Lending Office Withholding would have been required on such payment provided that this exclusion shall not apply to the extent such Withholding does not exceed the Withholding that would have been applicable to such payment if such Lender had not changed its Lending Office and this exclusion shall not apply to the extent that the Withholding exceeds the amount of Withholding that would have been required under the law in effect immediately after such Lender changed its Lending Office; or

(g) in the case of a Lender, to the extent that Withholding would not have been required on such payment if such Lender has complied with its obligations to deliver certain tax form pursuant to Section 23.6 below.

23.6 Delivery of Tax Forms.

(i) Upon the reasonable request of the Borrower, each Lender or transferee that is organized under the laws of a jurisdiction outside the United States (a “Non-U.S. Lender”) shall deliver to the Agent and the Borrower two properly completed and duly executed copies of either U.S. Internal Revenue Service Form W-8BEN, W-8ECI or W-8IMY or, upon request of the Borrower or the Agent, any subsequent versions thereof or successors thereto, in each case claiming such reduced rate (which may be zero) of U.S. Federal withholding tax with respect to payments of interest hereunder as such Non-U.S. Lender may properly claim.

(j) In addition, in the case of a Non-U.S. Lender claiming exemption from U.S. Federal withholding tax under Section 871(h) or 881(c) of the Code, such Non-U.S. Lender shall, when so requested by the Borrower provide to the Agent and the Borrower to in addition to the W-8BEN required under Section 23.6(a) a certificate representing that such Non-U.S. Lender is not a bank for purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the Borrower and is not a controlled foreign corporation related to the Borrower (within the meaning of Section 864(d)(4) of the Code), and such Non-U.S. Lender agrees that it shall promptly notify the Agent in the event any representation in such certificate is no longer accurate.

(k) Each Non-U.S. Lender shall deliver such forms within 20 days after receipt of a written request therefor from the Agent or Borrower.

(l) Notwithstanding any other provision of this Clause 23.6, a Non-U.S. Lender shall not be required to deliver any form pursuant to this Clause 23.6 that such Non-U.S. Lender is not legally entitled to deliver.

23.7 FATCA Information

(a) Subject to paragraph (c) below, each FATCA Relevant Party confirms to each other FATCA Relevant Party whether it is or is not a FATCA Exempt Party on the date hereof and thereafter within ten (10) Business Days of a reasonable request by another FATCA Relevant Party:

(i) confirm to the other party whether it is a FATCA Exempt Party or is not a FATCA Exempt Party; and

(ii) supply to the requesting party (with a copy to all other FATCA Relevant Parties) such other form or forms ( including IRS Form W-8 or Form W-9 or any successor or substitute form, as applicable) and any other documentation and other information relating to its status under FATCA (including its applicable “passthru percentage” or other information required under FATCA or other official guidance including intergovernmental agreements) as the requesting party reasonably requests for the purpose of determining whether any payment to such party may be subject to any FATCA Deduction.

(b) If a FATCA Relevant Party confirms to any other FATCA Relevant Party that it is a FATCA Exempt Party or provides an IRS Form W-8 or W-9 to show that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that party shall so notify all other FATCA Relevant Parties reasonably promptly.

(c) Nothing in this Clause 23.7 shall obligate any FATCA Relevant Party to do anything which would or, in its reasonable opinion, might constitute a breach of any law or regulation, any policy of that party, any fiduciary duty or any duty of confidentiality, or to disclose any confidential information (including, without limitation, its tax returns and calculations); provided, that nothing in this paragraph shall excuse any FATCA Relevant Party from providing a true, complete and correct IRS Form W-8 or W-9 (or any successor or substitute form where applicable). Any information provided on such IRS Form W-8 or W-9 (or any successor or substitute forms) shall not be treated as confidential information of such party for purposes of this paragraph.

(d) If a FATCA Relevant Party fails to confirm its status or to supply forms, documentation or other information requested in accordance with the provision of this Agreement or the provided information is insufficient under FATCA then:

(i) such party shall be treated as if it were a FATCA Non-Exempt Party; and

(ii) if that party failed to confirm its applicable passthru percentage then such party shall be treated for the purposes of the Finance Documents (and payments made thereunder) as if its applicable passthru percentage is 100%,

until (in each case) such time as the party in question provides sufficient confirmation, forms, documentation or other information to establish the relevant facts.

23.8 FATCA Withholding.

(a) A FATCA Relevant Party making a payment to any FATCA Non-Exempt Party shall make such FATCA Deduction as it determines is required by law and shall render payment to the IRS within the time allowed and in the amount required by FATCA.

(b) If a FATCA deduction is required to be made by any FATCA Relevant Party to a FATCA Non-Exempt Party, the amount of the payment due from such FATCA Relevant Party shall be reduced by the amount of the FATCA Deduction reasonably determined to be required by such FATCA Relevant Party.

(c) Each FATCA Relevant Party shall promptly upon becoming aware that a FATCA Deduction is required with respect to any payment owed to it (or that there is any change in the rate or basis of a FATCA Deduction) notify each other FATCA Relevant Party accordingly.

(d) Within thirty days of making either a FATCA Deduction or any payment required in connection with that FATCA Deduction, the party making such FATCA Deduction shall deliver to the Agent for delivery to the party on account of whom the FATCA Deduction was made evidence reasonably satisfactory to that party that the FATCA Deduction has been made or (as applicable) any appropriate payment paid to the IRS.

(e) A FATCA Relevant Party who becomes aware that it must make a FATCA Deduction in respect of a payment to another FATCA Relevant Party (or that there is any change in the rate or basis of such FATCA Deduction) shall notify that party and the Agent.

(f) The Agent shall promptly upon becoming aware that it must make a FATCA Deduction in respect of a payment to a Lender which relates to a payment by the Borrower (or that there is any change in the rate or the basis of such a FATCA Deduction) notify the Borrower and the relevant Lender.

(g) If a FATCA Deduction is made as a result of any Creditor Party failing to be a FATCA Exempt Party, such party shall indemnify each other Creditor Party against any loss, cost or expense to it resulting from such FATCA Deduction.

23.9 FATCA Mitigation. Notwithstanding any other provision of this Agreement, if a FATCA Deduction is or will be required to be made by any party under Clause 23.8 in respect of a payment to any FATCA Non-Exempt Lender, the FATCA Non-Exempt Lender may either:

(a) transfer its entire interest in the Loan to a U.S. branch or affiliate, or

(b) nominate one or more transferee lenders who upon becoming a Lender would be a FATCA Exempt Party, by notice in writing to the Agent and the Borrower specifying the terms of the proposed transfer, and cause such transferee lender(s) to purchase all of the FATCA Non-Exempt Lender’s interest in the Loan.

23.10 Additional Borrowers and/or Guarantors. Except for the proposed Guarantors set forth in the Schedule 2, no additional borrowers and/or guarantors shall be added as parties to this Agreement without the consent of all Lenders.

23.11 Tax Credits. A Creditor Party which receives for its own account a repayment or credit in respect of tax on account of which the Borrower has made an increased payment under Clause 23.2 shall pay to the Borrower a sum equal to the proportion of the repayment or credit which that Creditor Party allocates to the amount due from the Borrower in respect of which the Borrower made the increased payment, provided that:

(a) the Creditor Party shall not be obliged to allocate to this transaction any part of a tax repayment or credit which is referable to a class or number of transactions;

(b) nothing in this Clause 23.11 shall oblige a Creditor Party to arrange its tax affairs in any particular manner, to claim any type of relief, credit, allowance or deduction instead of, or in priority to, another or to make any such claim within any particular time;

(c) nothing in this Clause 23.11 shall oblige a Creditor Party to make a payment which would leave it in a worse position than it would have been in if the Borrower had not been required to make a tax deduction from a payment; and

(d) any allocation or determination made by a Creditor Party under or in connection with this Clause 23.11 shall be conclusive and binding on the Borrower and the other Creditor Parties.

24. ILLEGALITY, ETC

24.1 Illegality. This Clause 24 applies if a Lender (the “Notifying Lender”) notifies the Agent that it has become, or will with effect from a specified date, become:

(a) unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or

(b) contrary to, or inconsistent with, any regulation,

for the Notifying Lender to maintain or give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement.

24.2 Notification of Illegality. The Agent shall promptly notify the Borrower, the other Security Parties, the Security Trustee and the other Lenders of the notice under Clause 24.1 which the Agent receives from the Notifying Lender.

24.3 Prepayment; Termination of Commitment. On the Agent notifying the Borrower under Clause 24.2, the Notifying Lender’s Commitment shall terminate; and thereupon or, if later, on the date specified in the Notifying Lender’s notice under Clause 24.1 as the date on which the notified event would become effective the Borrower shall prepay the Notifying Lender’s Contribution with accrued interest, but without penalty, premium or breakage cost.

24.4 Mitigation. If circumstances arise which would result in a notification under Clause 24.1 then, without in any way limiting the rights of the Notifying Lender under Clause 24.3, the Notifying Lender shall use reasonable commercial efforts to transfer its obligations, liabilities and rights under this Agreement and the Finance Documents to another office or financial institution not affected by the circumstances but the Notifying Lender shall not be under any obligation to take any such action if, in its opinion, to do would or might:

(a) have an adverse effect on its business, operations or financial condition; or

(b) involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or

(c) involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.

25. INCREASED COSTS

25.1 Increased Costs. This Clause 25 applies if a Lender (the “Notifying Lender”) notifies the Agent that the Notifying Lender considers that as a result of:

(a) the introduction or alteration after the date of this Agreement of a law or an alteration after the date of this Agreement in the manner in which a law is interpreted or applied (disregarding any effect which relates to the application to payments under this Agreement of a Non-Indemnified tax);

(b) complying with any regulation (including any which relates to capital adequacy or liquidity controls or which affects the manner in which the Notifying Lender allocates capital resources to its obligations under this Agreement) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement, the Notifying Lender (or a parent company of it) has incurred or will incur an “increased cost”; or

(c) the implementation or application of or compliance with Basel III or any other law or regulation which implements Basel III (whether such implementation, application or compliance is by a government, regulator, Creditor Party or any of its affiliates).

Notwithstanding anything to the contrary, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and all requests, rules, guidelines and directives promulgated thereunder, are deemed to have been introduced or adopted after the date of this Agreement, regardless of the date enacted or adopted.

25.2 Meaning of “Increased Costs”. In this Clause 25, “increased costs” means, in relation to a Notifying Lender:

(a) an actual additional or increased cost incurred as a result of, or in connection with, the Notifying Lender having entered into, or being a party to, this Agreement or having taken an assignment of rights under this Agreement, of funding or maintaining its Commitment or Contribution or performing its obligations under this Agreement, or of having outstanding all or any part of its Contribution or other unpaid sums;

(b) a reduction in the amount of any payment to the Notifying Lender under this Agreement or in the effective return which such a payment represents to the Notifying Lender or on its capital;

(c) an actual additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Notifying Lender’s Contribution or (as the case may require) the proportion of that cost attributable to the Contribution; or

(d) a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Notifying Lender under this Agreement;

(e) but not an item attributable to a change in the rate of tax on the overall net income of the Notifying Lender (or a parent company of it) or an item covered by the indemnity for tax in Clause 22.1 or by Clause 23 or an item arising directly out of the implementation or application of or compliance with Basel III (whether such implementation, application or compliance is by a government, regulator, Creditor Party or any of its affiliates). For the purposes of this Clause 25.2 the Notifying Lender may in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class of its assets and liabilities) on such basis as it considers appropriate.

In each case, reasonable evidence of such Increased Cost shall be provided to the Borrower.

25.3 Notification to Borrower of Claim for Increased Costs. The Agent shall promptly notify the Borrower and the other Security Parties of the notice which the Agent received from the Notifying Lender under Clause 25.1.

25.4 Payment of Increased Costs. The Borrower shall pay to the Agent, on the Agent’s demand, for the account of the Notifying Lender the amounts which the Agent from time to time notifies the Borrower that the Notifying Lender has specified to be necessary to compensate the Notifying Lender for the increased cost.

25.5 Notice of Prepayment. If the Borrower is not willing to continue to compensate the Notifying Lender for the increased cost under Clause 25.4, the Borrower may give the Agent not less than 14 days’ notice of its intention to prepay the Notifying Lender’s Contribution at the end of an Interest Period.

25.6 Prepayment; Termination of Commitment. A notice under Clause 25.5 shall be irrevocable; the Agent shall promptly notify the Notifying Lender of the Borrower’s notice of intended prepayment; and:

(a) on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled; and

(b) on the date specified in its notice of intended prepayment, the Borrower shall prepay (without premium or penalty) the Notifying Lender’s Contribution, together with accrued interest thereon at the applicable rate plus the Margin.

25.7 Application of Prepayment. Clause 8.8 shall apply in relation to the prepayment.

26. SET-OFF

26.1 Application of Credit Balances. Upon the occurrence and during the continuance of an Event of Default, each Creditor Party may without prior notice:

(f) apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Borrower at any office in any country of that Creditor Party in or towards satisfaction of any sum then due from the Borrower to that Creditor Party under any of the Finance Documents; and

(g) for that purpose:

(i) break, or alter the maturity of, all or any part of a deposit of the Borrower;

(ii) convert or translate all or any part of a deposit or other credit balance into Dollars; and

(iii) enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate.

26.2 Existing Rights Unaffected. No Creditor Party shall be obliged to exercise any of its rights under Clause 26.1; and those rights shall be without prejudice and in addition to any right of set-off, combination of accounts, charge, lien or other right or remedy to which a Creditor Party is entitled (whether under the general law or any document).

26.3 Sums Deemed Due to a Lender. For the purposes of this Clause 26, a sum payable by the Borrower to the Agent or the Security Trustee for distribution to, or for the account of, a Lender shall be treated as a sum due to that Lender; and each Lender’s proportion of a sum so payable for distribution to, or for the account of, the Lenders shall be treated as a sum due to such Lender.

26.4 No Security Interest. This Clause 26 gives the Creditor Parties a contractual right of set-off only, and does not create any Security Interest over any credit balance of the Borrower.

27. TRANSFERS AND CHANGES IN LENDING OFFICES

27.1 Transfer by Borrower or Guarantor. Neither the Borrower nor any of the Guarantors may, without the consent of the Agent, given on the instructions of all Lenders, transfer any of its rights, liabilities or obligations under any Finance Document.

27.2 Transfer by a Lender. Subject to Clause 27.4, a Lender (the “Transferor Lender”) may at any time, after consultation with the Borrower, cause:

(a) its rights in respect of all or part of its Contribution in an amount of not less than $2,000,000; or

(b) its obligations in respect of all or part of its Commitment in an amount of not less than $2,000,000; or

(c) a combination of (a) and (b),

to be (in the case of its rights) transferred to, or (in the case of its obligations) assumed by, another bank or financial institution (subject, if the transfer or the assumption is to be made before the first Drawdown Date, to the consent of the Borrower which shall not be unreasonably withheld or delayed and which shall be deemed to have been given fifteen business days after being sought unless expressly refused within that period and, for the avoidance of doubt no consent of the Borrower shall be required for any transfer occurring on or after the first Drawdown Date) (each, a “Transferee Lender”) which (i) is regularly engaged in or established for the purpose of making, purchasing or investing in asset finance loans or other related products and (ii) is not an Affiliate of the Borrower, by delivering to the Agent a completed certificate in the form set out in Schedule 5 with any modifications approved or required by the Agent (a “Transfer Certificate”) executed by the Transferor Lender and the Transferee Lender, provided, however, that the minimum transfer amounts set forth in Clause 27.2 shall not apply when a Transferor Lender transfers all of its right and obligations in respect of its Commitments and Contributions to a Transferee Lender.

Notwithstanding the foregoing, any rights and obligations of the Transferor Lender in its capacity as Agent or Security Trustee shall be determined in accordance with Clause 31.

27.3 Transfer Certificate, Delivery and Notification. As soon as reasonably practicable after a Transfer Certificate is delivered to the Agent, it shall (unless it has reason to believe that the Transfer Certificate may be defective):

(a) sign the Transfer Certificate on behalf of itself, the Borrower, the other Security Parties, the Security Trustee and each of the other Lenders;

(b) on behalf of the Transferee Lender, send to the Borrower and each other Security Party letters or faxes notifying them of the Transfer Certificate and attaching a copy of it;

(c) send to the Transferee Lender copies of the letters or faxes sent under paragraph (b),

but the Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Transferor Lender and the Transferee Lender once it is satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations to the transfer to that Transferee Lender.

27.4 Effective Date of Transfer Certificate. A Transfer Certificate becomes effective on the date, if any, specified in the Transfer Certificate as its effective date, provided that it is signed by the Agent under Clause 27.3 on or before that date.

27.5 No Transfer Without Transfer Certificate. Except as provided in Clause 27.6, no assignment or transfer of any right or obligation of a Lender under any Finance Document is binding on, or effective in relation to, the Borrower, any other Security Party, the Agent or the Security Trustee unless it is effected, evidenced or perfected by a Transfer Certificate.

27.6 Lender Re-Organization; Waiver of Transfer Certificate. If a Lender enters into any merger, de-merger or other reorganization as a result of which all its rights or obligations vest in a successor, the Agent may, if it sees fit, by notice to the successor and the Borrower and the Security Trustee waive the need for the execution and delivery of a Transfer Certificate and, upon service of the Agent’s notice, the successor shall become a Lender with the same Commitment and Contribution as were held by the predecessor Lender.

27.7 Effect of Transfer Certificate. The effect of a Transfer Certificate is as follows:

(e) to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents are assigned to the Transferee Lender absolutely, free of any defects in the Transferor Lender’s title and of any rights or equities which the Borrower or any other Security Party had against the Transferor Lender;

(f) the Transferor Lender’s Commitment is discharged to the extent specified in the Transfer Certificate;

(g) the Transferee Lender becomes a Lender with the Contribution previously held by the Transferor Lender and a Commitment of an amount specified in the Transfer Certificate;

(h) the Transferee Lender becomes bound by all the provisions of the Finance Documents which are applicable to the Lenders generally, including those about pro-rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them;

(i) any part of the Loan which the Transferee Lender advances after the Transfer Certificate’s effective date ranks in point of priority and security in the same way as it would have ranked had it been advanced by the transferor, assuming that any defects in the transferor’s title and any rights or equities of the Borrower or any other Security Party against the Transferor Lender had not existed;

(j) the Transferee Lender becomes entitled to all the rights under the Finance Documents which are applicable to the Lenders generally, including but not limited to those relating to the Required Lenders and Clause 21, and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and

(k) in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with a Finance Document, the Transferee Lender shall be entitled to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount.

The rights and equities of the Borrower or any other Security Party referred to above include, but are not limited to, any right of set off and any other kind of cross-claim.

27.8 Maintenance of Register of Lenders. During the Security Period the Agent shall maintain a register in which it shall record the name, Commitment, Contribution and administrative details (including the lending office) from time to time of each Lender holding a Transfer Certificate and the effective date (in accordance with Clause 27.4) of the Transfer Certificate; and the Agent shall make the register available for inspection by any Lender, the Security Trustee and the Borrower during normal banking hours, subject to receiving at least three (3) Business Days’ prior notice.

27.9 Reliance on Register of Lenders. The entries on that register shall, in the absence of manifest error, be conclusive in determining the identities of the Lenders and the amounts of their Commitments and Contributions and the effective dates of Transfer Certificates and may be relied upon by the Agent and the other parties to the Finance Documents for all purposes relating to the Finance Documents.

27.10 Authorization of Agent to Sign Transfer Certificates. The Borrower, the Security Trustee and each Lender irrevocably authorizes the Agent to sign Transfer Certificates on its behalf.

27.11 Registration Fee. In respect of any Transfer Certificate, the Agent shall be entitled to recover a registration fee of $5,000 from the Transferor Lender or (at the Agent’s option) the Transferee Lender.

27.12 Sub-Participation; Subrogation Assignment. A Lender may sub-participate all or any part of its rights and/or obligations under or in connection with the Finance Documents with notice to the Agent and the Security Trustee.

27.13 Disclosure of Information. A Lender may disclose to a potential Transferee Lender or sub-participant any information which the Lender has received in relation to the Borrower, any other Security Party or their affairs under or in connection with any Finance Document, unless the information is clearly of a confidential nature.

27.14 Change of Lending Office. A Lender may change its lending office by giving notice to the Agent and the change shall become effective on the later of:

(a) the date on which the Agent receives the notice; and

(b) the date, if any, specified in the notice as the date on which the change will come into effect.

27.15 Notification. On receiving such a notice, the Agent shall notify the Borrower and the Security Trustee; and, until the Agent receives such a notice, it shall be entitled to assume that a Lender is acting through the lending office of which the Agent last had notice.

27.16 Security Over Lenders’ Rights. In addition to the other rights provided to Lenders under this Clause 27, each Lender may without consulting with or obtaining consent from the Borrower or any other Security Party, at any time charge, assign or otherwise create a Security Interest in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:

(a) any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and

(b) in the case of any Lender which is a fund, any charge, assignment or other Security Interest granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities;

except that no such charge, assignment or Security Interest shall:

(iii) release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security Interest for the Lender as a party to any of the Finance Documents; or

(iv) require any payments to be made by the Borrower or any other Security Party or grant to any person any more extensive rights than those required to be made or granted to the relevant Lender under the Finance Documents.

27.17 Replacement of Reference Bank. If any Reference Bank ceases to be a Lender or is unable on a continuing basis to supply quotations for the purposes of Clause 5 then, unless the Borrower, the Agent and the Required Lenders otherwise agree, the Agent, acting on the instructions of the Required Lenders, and after consulting the Borrower, shall appoint another bank (whether or not a Lender) to be a replacement Reference Bank; and, when that appointment comes into effect, the first‑mentioned Reference Bank’s appointment shall cease to be effective.

28. VARIATIONS AND WAIVERS

28.1 Variations, Waivers, Etc. by Required Lenders. Subject to Clause 28.2, a document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or any Creditor Party’s rights or remedies under such a provision or the general law, only if the document is signed, or specifically agreed to by fax, by the Borrower, by the Agent on behalf of the Required Lenders, by the Agent and the Security Trustee in their own rights, and, if the document relates to a Finance Document to which a Security Party is party, by that Security Party.

28.2 Variations, Waivers, Etc. Requiring Agreement of All Lenders. As regards the following, Clause 28.1 applies as if the words “by the Agent on behalf of the Required Lenders” were replaced by the words “by the Agent on behalf of every Lender”:

(d) a reduction in the Margin;

(e) a postponement to the date for, or a reduction in the amount of, any payment of principal, interest, fees or other sum payable under this Agreement or the Note;

(f) an extension of the Availability Period;

(g) an increase in any Lender’s Commitment;

(h) a change to the definition of “Required Lenders”;

(i) a change to Clauses 3, 11.1(o), 11.1 (s), 11.1(x), 11.2(b), 11.2(e), 11.2(o), 11.2(q), 12.5, 14.2(a), 14.2(c), 14.3, 14.5, 14.6, 15.2 or this Clause 28;

(j) any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document;

(k) any other change or matter which this Agreement or another Finance Document expressly provides that each Lender’s consent is required;

(l) the substitution of any Security Party; and

(m) any amendment or waiver if the Agent or a Lender which is a FATCA Non-Exempt Party reasonably believes that it may constitute a “material modification” within the meaning of FATCA that may result (directly or indirectly) in any party to any Finance Document being required to make a FATCA Deduction.

28.3 Variations, Waivers, Etc. Relating to the Servicing Banks. An amendment or waiver that relates to the rights or obligations of the Agent or the Security Trustee under Clause 31 may not be effected without the consent of the Agent or the Security Trustee.

28.4 Exclusion of Other or Implied Variations. Except for a document which satisfies the requirements of Clauses 28.1, 28.2 or 28.3, no document, and no act, course of conduct, failure or neglect to act, delay or acquiescence on the part of the Creditor Parties or any of them (or any person acting on behalf of any of them) shall result in the Creditor Parties or any of them (or any person acting on behalf of any of them) being taken to have varied, waived, suspended or limited, or being precluded (permanently or temporarily) from enforcing, relying on or exercising:

(a) a provision of this Agreement or another Finance Document; or

(b) an Event of Default; or

(c) a breach by the Borrower or another Security Party of an obligation under a Finance Document or the general law; or

(d) any right or remedy conferred by any Finance Document or by the general law,

and there shall not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time.

29. NOTICES

29.1 General. Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by letter, email or fax and references in the Finance Documents to written notices, notices in writing and notices signed by particular persons shall be construed accordingly, provided, however, that if notice is provided by email, such notice shall also be given by confirming letter or fax to constitute effective notice hereunder unless receipt of such email notice is confirmed by return email and, provided, further, that notwithstanding anything in this Agreement to the contrary, all notices must be in writing.

Confidential

38

29.2 Addresses for Communications. A notice by letter or fax shall be sent:

(c) to the Borrower

or a Guarantor: 9, Boulevard Charles III
Monaco 98000
Attention: General Counsel
Facsimile:+377 97 77 8346
Email: legal@scorpiogroup.net

with a copy to: 150 E. 58th Street
New York, New York 10155
Attention: Chief Financial Officer
Facsimile: +212-542-1618
Email: blee@scorpiogroup.net

(d) to a Lender:    At the address below its name in
Schedule 1-B or (as the case may
require) in the relevant Transfer
Certificate.

(e) to the Agent:    Deutsche Bank AG Filiale Deutschlandgeschäft
Adolphsplatz 7
20457 Hamburg, Germany
Attention: Stephan Vetter/
Bastian Duehmert
Facsimile: +49 (40) 3701-4550
Email: stephan.vetter@db.com/

bastian.duehmert@db.com

to the Security Trustee: Deutsche Bank AG Filiale Deutschlandgeschäft
Adolphsplatz 7
20457 Hamburg, Germany
Attention: Stephan Vetter/
Bastian Duehmert
Facsimile: +49 (40) 3701-4550
Email: stephan.vetter@db.com/ bastian.duehmert@db.com

or to such other address as the relevant party may notify the Agent or, if the relevant party is the Agent or the Security Trustee, the Borrower, the Lenders and the Security Parties.

29.3 Effective Date of Notices. Subject to Clauses 29.4 and 29.5:

(e) a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered;

(f) a notice which is sent by fax shall be deemed to be served, and shall take effect, two (2) hours after its transmission is completed; and.

(g) a notice which is sent by electronic mail shall be deemed to be served and shall take effect at the time that (i) the confirming letter or fax is deemed to be served as provided in (a) or (b) above; or (ii) if receipt is confirmed by return email, the time of such return email.

29.4 Service Outside Business Hours. However, if under Clause 29.3 a notice would be deemed to be served:

(a) on a day which is not a business day in the place of receipt; or

(b) on such a business day, but after 5:00 p.m. local time,

the notice shall (subject to Clause 29.5) be deemed to be served, and shall take effect, at 9:00 a.m. on the next day which is such a business day, save that a notice which is given by a Creditor Party following the occurrence of an Event of Default shall be deemed to be served and shall take effect on the same day.

29.5 Illegible Notices. Clauses 29.3 and 29.4 do not apply if the recipient of a notice notifies the sender within one (1) hour after the time at which the notice would otherwise be deemed to be served that the notice has been received in a form which is illegible in a material respect.

29.6 Valid Notices. A notice (other than a notice sent solely by electronic mail without a confirming letter, fax or return email) under or in connection with a Finance Document shall not be invalid by reason that its contents or the manner of serving it do not comply with the requirements of this Agreement or, where appropriate, any other Finance Document under which it is served if:

(a) the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice; or

(b) in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should have been.

29.7 English Language. Any notice under or in connection with a Finance Document shall be in English.

29.8 Meaning of “Notice”. In this Clause 29, “notice” includes any demand, consent, authorization, approval, instruction, waiver or other communication.

30. SUPPLEMENTAL

30.1 Rights Cumulative, Non-Exclusive. The rights and remedies which the Finance Documents give to each Creditor Party are:

(f) cumulative;

(g) may be exercised as often as appears expedient; and

(h) shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.

30.2 Severability of Provisions. If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions of that Finance Document or of the provisions of any other Finance Document.

30.3 Counterparts. A Finance Document may be executed in any number of counterparts.

30.4 Binding Effect. This Agreement shall become effective on the Effective Date and thereafter shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.

31. THE SERVICING BANKS AND PARALLEL DEBT

31.1 Appointment and Granting.

(h) The Agent. Each of the Lenders appoints and authorizes (with a right of revocation) the Agent to act as its agent hereunder and under any of the other Finance Documents with such powers as are specifically delegated to the Agent by the terms of this Agreement and of any of the other Finance Documents, together with such other powers as are reasonably incidental thereto.

(i) The Security Trustee.

(i) Authorization of Security Trustee. Each of the other Creditor Parties appoints and authorizes (with a right of revocation) the Security Trustee to act as security trustee hereunder and under the other Finance Documents (other than the Notes) with such powers as are specifically delegated to the Security Trustee by the terms of this Agreement and such other Finance Documents, together with such other powers as are reasonably incidental thereto.

(ii) Granting Clause. To secure the payment of all sums of money from time to time owing to the Creditor Parties under the Finance Documents plus accrued interest thereon and the performance of the covenants of the Borrower and any other Security Party herein and therein contained, and in consideration of the premises and of the covenants herein contained and of the extensions of credit by the Lenders, the Security Trustee does hereby declare that it will hold as such trustee in trust for the benefit of the other Creditor Parties, from and after the execution and delivery thereof, all of its right, title and interest as mortgagee in, to and under the Mortgages and its right, title and interest as assignee and secured party under the other Finance Documents (the right, title and interest of the Security Trustee in and to the property, rights and privileges described above, from and after the execution and delivery thereof, and all property hereafter specifically subjected to the Security Interest of the indenture created hereby and by the Finance Documents by any amendment hereto or thereto are herein collectively called the “Estate”); TO HAVE AND TO HOLD the Estate unto the Security Trustee and its successors and assigns forever, BUT IN TRUST, NEVERTHELESS, for the equal and proportionate benefit and security of the other Creditor Parties and their respective successors and assigns without any priority of any one over any other, UPON THE CONDITION that, unless and until an Event of Default under this Agreement shall have occurred and be continuing, each of the Guarantors shall be permitted, to the exclusion of the Security Trustee, to possess and use the Collateral Vessel owned by it. IT IS HEREBY COVENANTED, DECLARED AND AGREED that all property subject or to become subject hereto is to be held, subject to the further covenants, conditions, uses and trusts hereinafter set forth, and each Security Party, for itself and its respective successors and assigns, hereby covenants and agrees to and with the Security Trustee and its successors in said trust, for the equal and proportionate benefit and security of the other Creditor Parties as hereinafter set forth.

(iii) Acceptance of Trusts. The Security Trustee hereby accepts the trusts imposed upon it as Security Trustee by this Agreement, and the Security Trustee covenants and agrees to perform the same as herein expressed and agrees to receive and disburse all monies constituting part of the Estate in accordance with the terms hereof.

31.2 Scope of Duties. Neither the Agent nor the Security Trustee (which terms as used in this sentence and in Clause 31.5 hereof shall include reference to their respective affiliates and their own respective and their respective affiliates’ officers, directors, employees, agents and attorneys-in-fact):

(c) shall have any duties or responsibilities except those expressly set forth in this Agreement and in any of the Finance Documents, and shall not by reason of this Agreement or any of the Finance Documents be (except, with respect to the Security Trustee, as specifically stated to the contrary in this Agreement) a trustee for a Lender;

(d) shall be responsible to the Lenders for any recitals, statements, representations or warranties contained in this Agreement or in any of the Finance Documents, or in any certificate or other document referred to or provided for in, or received by any of them under, this Agreement or any of the other Finance Documents, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any of the other Finance Documents or any other document referred to or provided for herein or therein or for any failure by a Security Party or any other person to perform any of its obligations hereunder or thereunder or for the location, condition or value of any property covered by any Security Interest under any of the Finance Documents or for the creation, perfection or priority of any such Security Interest;

(e) shall be required to initiate or conduct any litigation or collection proceedings hereunder or under any of the Finance Documents unless expressly instructed to do so in writing by the Required Lenders; or

(f) shall be responsible for any action taken or omitted to be taken by it hereunder or under any of the Finance Documents or under any other document or instrument referred to or provided for herein or therein or in connection herewith or therewith, except for its own gross negligence or willful misconduct. Each of the Security Trustee and the Agent may employ agents and attorneys-in-fact and neither the Security Trustee nor the Agent shall be responsible for the negligence or misconduct of any such agents or attorneys-in-fact selected by it in good faith. Each of the Security Trustee and the Agent may deem and treat the payee of a Note as the holder thereof for all purposes hereof unless and until a written notice of the assignment or transfer thereof shall have been filed with the Agent together with the written consent of the Borrower to such assignment or transfer, provided, however, that if an Event of Default has occurred and is continuing, no consent of the Borrower shall be required for such assignment or transfer.

31.3 Reliance. Each of the Security Trustee and the Agent shall be entitled to rely upon any certification, notice or other communication (including any thereof by telephone, telex, telefacsimile, telegram or cable) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper person or persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by the Security Trustee or the Agent, as the case may be. As to any matters not expressly provided for by this Agreement or any of the other Finance Documents, each of the Security Trustee and the Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder or thereunder in accordance with instructions signed by the Required Lenders, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders.

31.4 Knowledge. Neither the Security Trustee nor the Agent shall be deemed to have knowledge or notice of the occurrence of an event or circumstances which, with the giving of notice and/or lapse of time would constitute an Event of Default or Event of Default (other than, in the case of the Agent, the non-payment of principal of or interest on the Loan or actual knowledge thereof) unless each of the Security Trustee and the Agent has received notice from a Lender or the Borrower specifying such event or circumstances which, with the giving of notice and/or lapse of time would constitute an Event of Default or Event of Default and stating that such notice is a “Notice of Default”. If the Agent receives such a notice of the occurrence of such event or circumstances which, with the giving of notice and/or lapse of time would constitute an Event of Default or Event of Default, the Agent shall give prompt notice thereof to the Security Trustee and the Lenders (and shall give each Lender prompt notice of each such non-payment). Subject to Clause 31.8 hereof, the Security Trustee and the Agent shall take such action with respect to such event or circumstances which, with the giving of notice and/or lapse of time would constitute an Event of Default or Event of Default or other event as shall be directed by the Required Lenders, except that, unless and until the Security Trustee and the Agent shall have received such directions, each of the Security Trustee and the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such event or circumstances which, with the giving of notice and/or lapse of time would constitute an Event of Default or Event of Default or other event as it shall deem advisable in the best interest of the Lenders.

31.5 Security Trustee and Agent as Lenders. Each of the Security Trustee and the Agent (and any successor acting as Security Trustee or Agent, as the case may be) in its individual capacity as a Lender hereunder shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not acting as the Security Trustee or the Agent, as the case may be, and the term “Lender” or “Lenders” shall, unless the context otherwise indicates, include each of the Security Trustee and the Agent in their respective individual capacities. Each of the Security Trustee and the Agent (and any successor acting as Security Trustee and Agent, as the case may be) and their respective affiliates may (without having to account therefor to a Lender) accept deposits from, lend money to and generally engage in any kind of banking, trust or other business with the Borrower and any of its subsidiaries or affiliates as if it were not acting as the Security Trustee or the Agent, as the case may be, and each of the Security Trustee and the Agent and their respective affiliates may accept fees and other consideration from the Borrower for services in connection with this Agreement or otherwise without having to account for the same to the Lenders.

31.6 Indemnification of Security Trustee and Agent. The Lenders severally agree, ratably in accordance with the aggregate principal amount of each Lender’s Contribution in the Loan, to indemnify each of the Agent and the Security Trustee (to the extent not reimbursed under other provisions of this Agreement, but without limiting the obligations of the Borrower under said other provisions) for any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Security Trustee or the Agent in any way relating to or arising out of this Agreement or any of the other Finance Documents or any other documents contemplated by or referred to herein or therein or the transactions contemplated hereby (including, without limitation, the costs and expenses which the Borrower are to pay hereunder, but excluding, unless an Event of Default has occurred and is continuing, normal administrative costs and expenses incident to the performance of their respective agency duties hereunder) or the enforcement of any of the terms hereof or thereof or of any such other documents, except that no Lender shall be liable for any of the foregoing to the extent they arise from the gross negligence or willful misconduct of the party to be indemnified.

31.7 Reliance on Security Trustee or Agent. Each Lender agrees that it has, independently and without reliance on the Security Trustee, the Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own credit analysis of the Borrower and decision to enter into this Agreement and that it will, independently and without reliance upon the Security Trustee, the Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement or any of the Finance Documents. None of the Security Trustee or the Agent shall be required to keep itself informed as to the performance or observance by the Borrower of this Agreement or any of the Finance Documents or any other document referred to or provided for herein or therein or to inspect the properties or books of the Borrower. Except for notices, reports and other documents and information expressly required to be furnished to the Lenders by the Security Trustee or the Agent hereunder, neither the Security Trustee nor the Agent shall have any duty or responsibility to provide a Lender with any credit or other information concerning the affairs, financial condition or business of the Borrower or any of its parents, subsidiaries or affiliates which may come into the possession of the Security Trustee, the Agent or any of their respective affiliates.

31.8 Actions by Security Trustee and Agent. Except for action expressly required of the Security Trustee or the Agent hereunder and under the other Finance Documents, each of the Security Trustee and the Agent shall in all cases be fully justified in failing or refusing to act hereunder and thereunder unless it shall receive further assurances to its satisfaction from the Lenders of their indemnification obligations under Clause 31.6 against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.

31.9 Resignation and Removal. Subject to the appointment and acceptance of a successor Security Trustee or Agent (as the case may be) as provided below, each of the Security Trustee and the Agent may resign at any time by giving notice thereof to the Lenders and the Borrower, and the Security Trustee or the Agent may be removed at any time with or without cause by the Required Lenders by giving notice thereof to the Agent, the Security Trustee, the Lenders and the Borrower. Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Security Trustee or Agent, as the case may be which shall be either one of the Lenders or any other third party acceptable to the Required Lenders and the Borrower (the Borrower's consent not to be unreasonably withheld or delayed). If no successor Security Trustee or Agent, as the case may be, shall have been so appointed by the Lenders or, if appointed, shall not have accepted such appointment within 30 days after the retiring Security Trustee’s or Agent’s, as the case may be, giving of notice of resignation or the Required Lenders’ removal of the retiring Security Trustee or Agent, as the case may be, then the retiring Security Trustee or Agent, as the case may be, may, on behalf of the Lenders, appoint a successor Security Trustee or Agent. Upon the acceptance of any appointment as Security Trustee or Agent hereunder by a successor Security Trustee or Agent, such successor Security Trustee or Agent, as the case may be, shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Security Trustee or Agent, as the case may be, and the retiring Security Trustee or Agent shall be discharged from its duties and obligations hereunder. After any retiring Security Trustee or Agent’s resignation or removal hereunder as Security Trustee or Agent, as the case may be, the provisions of this Clause 31 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Security Trustee or the Agent, as the case may be.

31.10 Release of Collateral. Without the prior written consent of all Lenders neither the Security Trustee nor the Agent will consent to any modification, supplement or waiver under any of the Finance Documents nor without the prior written consent of all of the Lenders release any Collateral or otherwise terminate any Security Interest under the Finance Documents, except that no such consent is required, and each of the Security Trustee and the Agent is authorized, to release any Security Interest covering property if the Secured Liabilities have been paid and performed in full or which is the subject of a disposition of property permitted hereunder or to which the Lenders have consented.

31.11 Parallel Debt. (a) The Borrower hereby irrevocably and unconditionally undertakes as far as necessary in advance, to pay to the Security Trustee, as creditor in its own right and not as representative of any of the other Creditor Parties, an amount equal to the aggregate of all its Principal Obligations to all the Creditor Parties from time to time due in accordance with the terms and conditions of such Principal Obligations (such payment undertaking and the obligations and liabilities which are the result thereof, its “Parallel Debt”).

(a) Each of the parties hereto acknowledges that (i) the Parallel Debt of the Borrower constitutes undertakings, obligations and liabilities of the Borrower to the Security Trustee which are separate and independent from, and without prejudice to, the Principal Obligations which the Borrower has to any other Creditor Party and (ii) that the Parallel Debt represents the Security Trustee’s own claim to receive payment of such Parallel Debt by the Borrower, provided that the total amount which may become due under the Parallel Debt of the Borrower under this Clause 31.11 shall never exceed the total amount which may become due under all the Principal Obligations of the Borrower to all the Creditor Parties.

(iv) The total amount due by the Borrower as the Parallel Debt under Clause 31.11(a) shall be decreased to the extent that the Borrower shall have paid any amounts to the Creditor Parties or any of them to reduce the Borrower’s outstanding Principal Obligations or any Creditor Party otherwise receive any amount of such Principal Obligations (other than by virtue of Clause 31.11(b)(ii); and

(v) To the extent that the Borrower shall have paid any amounts to the Security Trustee under the Parallel Debt or the security Trustee shall have otherwise received monies in payment of such Parallel Debt, the total amount due under the Principal Obligations shall be decreased by the same amount.

(b) In the event the Security Trustee should resign or be removed by the Required Lenders, the Security Trustee shall assign the Parallel Debt owed to it to its successor security trustee together with all of its other rights and obligations under this Clause 31.11 and shall take all such further actions as the Agent in its sole discretion may deem necessary or desirable in order to assign and transfer to the successor security trustee the Parallel Debt and the other rights and obligations under this clause 31.11.

31.12 Instructions to Agent/Security Trustee. Unless a Finance Document expressly provides that the Agent and/or the Security Trustee shall only act or refrain from acting on the instructions of all Lenders, the Agent and/or the Security Trustee shall be entitled to act on the instructions of the Required Lenders.

32. LAW AND JURISDICTION

32.1 Governing Law. THIS AGREEMENT AND THE OTHER FINANCE DOCUMENTS (EXCEPT AS OTHERWISE PROVIDED IN A FINANCE DOCUMENT) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS CONFLICT OF LAW PRINCIPLES.

32.2 Consent to Jurisdiction.

(a) Each of the Security Parties hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York County, and any appellate court thereof, in any action or proceeding arising out of or relating to this Agreement or any of the other Finance Documents to which such Security Party is a party or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State Court or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

(b) Nothing in this Clause 32.2 shall affect the right of a Creditor Party to bring any action or proceeding against a Security Party or its property in the courts of any other jurisdictions where such action or proceeding may be heard.

(c) Each of the Security Parties hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any New York State or Federal court and the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court and any immunity from jurisdiction of any court or from any legal process with respect to itself or its property.

(d) Each of the Security Parties hereby agrees to appoint Seward & Kissel LLP, with offices currently located at One Battery Park Plaza, New York, New York 10004, Attention: Michael Timpone, as its designated agent for service of process for any action or proceeding arising out of or relating to this Agreement or any other Finance Document. Each of the Security Parties also irrevocably consents to the service of any and all process in any such action or proceeding by the mailing of copies of such process to its address specified in Clause 29.2. Each of the Security Parties also agrees that service of process may be made on it by any other method of service provided for under the applicable laws in effect in the State of New York.

32.3 Creditor Party Rights Unaffected. Nothing in this Clause 32 shall exclude or limit any right which any Creditor Party may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

32.4 Meaning of “Proceedings”. In this Clause 32, “proceedings” means proceedings of any kind, including an application for a provisional or protective measure.

32.5 Waiver of Sovereign Immunity. To the extent that a Security Party may be entitled, in any jurisdiction in which judicial proceedings may at any time be commenced with respect to any of the Finance Documents, to claim for itself or its revenues, assets or properties any immunity from suit, the jurisdiction of any court, attachment prior to judgment, attachment in aid of execution of a judgment, set-off, execution of a judgment or any other legal process, and to the extent that in any such jurisdiction there may be attributed such immunity (whether or not claimed), each such Security Party irrevocably agrees not to claim and hereby irrevocably waives such immunity to the fullest extent permitted by the laws of such jurisdiction and hereby agrees that the foregoing waiver shall be enforced to the fullest extent permitted under the Foreign Sovereign Immunities Act of 1976 of the United States of America, as amended, and is intended to be irrevocable for the purpose of such act.

32.6 Waiver of Damages. Each of the Borrower and the Guarantors waives, to the maximum extent not prohibited by law, any right it may have to claim or recover any special, indirect, exemplary, punitive or consequential damages in any action or proceeding arising out of or related to this Agreement or any of the other Finance Documents to which such Security Party is a party.

33. WAIVER OF JURY TRIAL

33.1 WAIVER. EACH OF THE SECURITY PARTIES AND THE CREDITOR PARTIES MUTUALLY AND IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

34. PATRIOT ACT NOTICE

34.1 PATRIOT Act Notice. Each of the Agent and the Lenders hereby notifies the Borrower that pursuant to the requirements of the PATRIOT Act and the policies and practices of the Agent and each Lender, the Agent and each of the Lenders is required to obtain, verify and record certain information and documentation that identifies each Security Party, which information includes the name and address of each Security Party and such other information that will allow the Agent and each of the Lenders to identify each Security Party in accordance with the PATRIOT Act.

[SIGNATURE PAGES FOLLOW ON NEXT PAGES]

EXECUTION PAGE

WHEREFORE, the parties hereto have caused this Agreement to be executed as of the date first above written.

SCORPIO BULKERS INC.,
as Borrower By: /s/ Hugh Baker_____________________________
Name: Hugh Baker
Title: Chief Financial Officer (Principal Financial Officer) DEUTSCHE BANK AG FILIALE DEUTSCHLANDGESCHÄFT, as Lead Arranger, Agent, Security Trustee, Account Bank and Lender By:___/s/ Geoffrey D. Ferrer_____ Name: Geoffrey D. Ferrer Title: Attorney-in-Fact

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Schedule 1-A

INITIAL GUARANTORS

NONE

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Schedule 1-B

THE LENDERS AND THEIR COMMITMENTS

Name	Lending Office and Contact Details	Commitment($)
Deutsche Bank AG Filiale Deutschlandgeschäft	Lending OfficeAdolphsplatz 7 20457 Hamburg Germany	$42,000,000
	Address for NoticesLoan Support & Shipping Sachsenstrasse 11 20097 Hamburg Germany Attention: Anja Eggert Fascimile: +49 (40) 3023-1738 Email: loan.admin-shipping-hh@db.com

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Schedule 2

POTENTIAL GUARANTORS AND COLLATERAL VESSELS

PROPOSED COLLATERAL VESSELS AND GUARANTORS

No.	Collateral Vessel	Collateral Vessel Owner/Guarantor	Type	DWT	Estimated Delivery Date	Hull No.	IMO No.
1.	SBI Samba	SBI Samba Shipping Company Limited	Kamsarmax	84,000	January 2015	S1680
2.	SBI Rumba	SBI Rumba Shipping Company Limited	Kamsarmax	84,000	August 2015	S1681

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Schedule 3

IRREVOCABLE

DRAWDOWN NOTICE

Dated: ____________, 20__

Deutsche Bank AG Filiale Deutschlandgeschäft

Adolphsplatz 7

20457 Hamburg

Germany

Ladies and Gentlemen:

The undersigned, Scorpio Bulkers Inc. (the “Borrower”), (i) refers to the senior secured term credit agreement, dated as of ___________________, 201_ (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”; the terms defined therein being used herein as therein defined unless otherwise defined herein), among the Borrower, as borrower, the guarantors listed in Schedule 1-A to the Credit Agreement, as guarantors, the banks and financial institutions listed in Schedule 1-B to the Credit Agreement, as lenders, and Deutsche Bank AG Filiale Deutschlandgeschäft, as lead arranger, administrative agent, security trustee and account bank, and (ii) hereby gives you notice, irrevocably, pursuant to Clause 4.1 of the Credit Agreement that the undersigned hereby requests an Advance under the Credit Agreement, and in connection therewith sets forth below the information relating to such Advance (the “Proposed Advance”):

(i) The Business Day of the Proposed Advance is .

(ii) The Collateral Vessel to which the Proposed Advance relates is the __________, and the Proposed Advance is being remitted to [finance/reimburse the Borrower for] part of the acquisition cost for such Collateral Vessel in the amount of $__________.

(iii) The initial Interest Period(s) for the Proposed Advance is __________ months.

(iv) The Guarantor that is or will be the owner of the Collateral Vessel to which the Proposed Advance relates [is a party to the Credit Agreement/has executed and delivered a Guarantor Joinder Agreement to the Agent];

(v) Remittance Instructions: __________________________________.

The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the Proposed Advance:

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(A)    The representations and warranties of each of the Security Parties contained in each of the Finance Documents in effect or intended to be in effect immediately following the Proposed Advance are correct in all material respects on and as of the date of the Proposed Advance, before and after giving effect to the Proposed Advance and to the application of the proceeds therefrom, as though made on and as of such date, other than any such representations or warranties that, by their terms, refer to a specific date other than the date of the Proposed Advance.

(B)    No event has occurred and is continuing, or would result from such Proposed Advance or from the application of the proceeds therefrom, that is an event or circumstances which, with the giving of notice and/or lapse of time would constitute an Event of Default or is an Event of Default.

(C)    No Material Adverse Effect has occurred since December 31, 2013.

(D)    If applicable, the Borrower is in compliance with the Security Maintenance Cover Ratio under the Credit Agreement, as evidenced by the back-up calculations attached hereto as Schedule A.

Delivery of an executed counterpart of this Notice of Drawdown by facsimile shall be effective as delivery of an original executed counterpart of this Notice of Drawdown. This Notice of Drawdown cannot be revoked or amended or modified in any way without the prior written consent of the Required Lenders.

[Signature Page Follows]

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Very truly yours,
Scorpio Bulkers Inc.
By___________________________    Name:
Title:

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SCHEDULE A

Security Maintenance Cover Ratio - Backup Calculations

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Schedule 4

DOCUMENTS REQUIRED AS CONDITIONS PRECEDENT

(referred to in Clause 9)

Part A

1. Constitutional Documents

Copies, certified by an officer of each Security Party as true, complete and up to date copies of all documents which contain or establish or relate to the constitution of that Security Party;

2. Corporate Authorizations

copies of resolutions of the directors of each Security Party and stockholders of each Security Party (other than the Borrower) approving such of the Finance Documents to which such Security Party is, or is to be, party and authorizing the signature, delivery and performance of such Security Party’s obligations thereunder, certified (in a certificate dated no earlier than five (5) Business Days prior to the Effective Date) by an officer of such Security Party as:

(a) being true and correct;

(b) being duly adopted by written consent of the directors of such Security Party and (if required by applicable laws of the jurisdiction of incorporation) by the stockholders of such Security Party;

(c) not having been amended, modified or revoked; and

(d) being in full force and effect,

together with originals or certified copies of any powers of attorney issued by any Security Party pursuant to such resolutions;

3. Specimen Signatures

copies of the signatures of the persons who have been authorized on behalf of each Security Party to sign and have signed or will sign such of the Finance Documents to which such Security Party is, or is to be, party and to give notices and communications, including notices of drawing, under or in connection with the Finance Documents, certified (in a certificate dated no earlier than five (5) Business Days prior to the Effective Date) by an officer of such Security Party as being the true signatures of such persons;

4. Certificate of Incumbency

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a list of directors and officers of each Security Party specifying the names and positions of such persons, certified (in a certificate dated no earlier than five (5) Business Days prior to the Effective Date) by an officer of such Security Party to be true, complete and up to date;

5. Borrower’s Consents and Approvals

a certificate (dated no earlier than five (5) Business Days prior to the Effective Date) from an officer of the Borrower that no other consents, authorizations, licenses or approvals are necessary for the Borrower to authorize or are required by the Borrower in connection with the borrowing by that Borrower of the Loan pursuant to this Agreement or the execution, delivery and performance of the Borrower of the Finance Documents to which it is or will be a party;

6. Other Consents and Approvals

a certificate (dated no earlier than five (5) Business Days prior to the Effective Date) from an officer of each Security Party (other than the Borrower) that no other consents, authorizations, licenses or approvals are necessary for such Security Party to guarantee and/or grant security for the borrowing by the Borrower of the Total Commitments pursuant to this Agreement and execute, deliver and perform the Finance Documents insofar as such Security Party is a party thereto;

7. “KYC”

such documentation and other evidence as is reasonably requested by the Agent in order for each Creditor Party to carry out and be satisfied with the results of all necessary “know your customer” or other checks which it is required to carry out in relation to the transactions contemplated by this Agreement and the other Finance Documents and to the identity of any parties to the Finance Documents (other than the Creditor Parties) and their directors and officers;

8. Finance Documents

(a) this Agreement, the Note, and the Shares Pledge, if applicable, each duly executed by the parties thereto; and

(b) all notices of assignment and other documents, certificates and instruments required pursuant to the Finance Documents named in subpart (a).

9. Fees and Commissions

evidence that any fees and commissions due under Clause 21 have been paid in full;

10. Borrower’s Process Agent

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a letter from the Borrower’s agent for receipt of service of proceedings referred to in Clause 32.2 accepting its appointment under the said Clause and under each of the other Finance Documents in which it is or is to be appointed as the Borrower’s agent and referred to in this Part A;

11. Security Parties’ Process Agent

a letter from each Security Party’s (other than the Borrower) agent for receipt of service of proceedings referred to in each of the Finance Documents to which such Security Party is a party and referred to in this Part A accepting its appointment under each such Finance Document;

12. Security Parties’ Counsel’s Opinion

an opinion of Seward & Kissel LLP, special counsel to the Security Parties, in form and substance satisfactory to the Agent;

13. Agent’s Counsel’s Opinion

An opinion of Cozen O’Connor, special counsel for the Agent, in form and substance satisfactory to the Agent;

14. Certificates of Goodstanding

A Certificate of Goodstanding for each of the Security Parties issued by the Republic of the Marshall Islands dated not more than five (5) Business Days prior to the Effective Date; and

15. Further Conditions

any such further conditions, documents or opinions as may be reasonably required by the Agent.

Part B

1. Drawdown Notice

The Drawdown Notice in respect of the relevant Advance (for the purposes of this Part B only, the “Relevant Advance”), duly executed;

2. If the Guarantor that owns the Collateral Vessel to which the Relevant Advance relates is not already a Guarantor, under this Agreement, (i) a duly completed Guarantor Joinder Agreement; and (ii) the Borrower shall provide the Shares Pledge or a duly completed supplement to the Shares Pledge, as the case may be;

3. Updated Corporate Authorizations/Certificates of Incumbency

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(a)    For the Borrower and if the Guarantor to which the Relevant Advance relates is already a party to this Agreement and has previously provided to the Agent the documents specified in paragraphs 1 through 7 of Part A of Schedule 4, a list of directors and officers of each Security Party specifying the names and positions of such persons and copies of the signatures of the persons who have been authorized on behalf of each Security Party to sign and who have or will sign such of the Finance Documents to which such Security Party is, or is to be, party and referred to in this Part B in respect of the Relevant Advance, and to give notices and communications, including notices of drawing, under or in connection with the Finance Documents, certified by an officer of such Security Party to be, in the case of the list of directors, true, complete and up to date and, in the case of the specimen signatures, true signatures of such persons or a certificate by an officer of such Security Party that the list provided in respect of that Security Party pursuant to paragraph 4 of Part A of this schedule and that the specimen signatures provided in respect of the Security Party pursuant to paragraph 3 of Part A of this schedule remain true, complete and up to date;

(b)    If the Guarantor to which the Relevant Advance relates is not already a party to this Agreement and is required to execute and deliver a Guarantor Joinder Agreement, such Guarantor shall provide the documents specified in paragraphs 1 through 8 of Part A of Schedule 4;

1. Collateral Vessel Conditions

evidence that the Collateral Vessel to which the Relevant Advance relates:

(a)    Registration and Encumbrances

is registered in the name of the relevant Guarantor through the relevant Registry under the laws and flag of the relevant Approved Flag and that such Collateral Vessel and its Earnings, Insurances and Requisition Compensation are free of Security Interests other than Permitted Security Interests; and

(b)    Classification

a statement of class from the relevant Classification Society that the Collateral Vessel to which the Relevant Advance relates is in class, without recommendations affecting class and ready to sail; and

(c)    Insurance

is insured in accordance with the provisions of the relevant Finance Documents and all requirements of the Finance Documents in respect of such Insurances have been or, in the case of an Advance made in accordance with clause 9.2(b) of this Agreement, as of the Delivery Date of the relevant Collateral Vessel will be complied with (including without

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limitation, confirmation from the protection and indemnity association or other insurer with which such Collateral Vessel is, or is to be, entered for insurance or insured against protection and indemnity risks (including oil pollution risks) that any necessary declarations required by the association or insurer for the removal of any oil pollution exclusion have been made and that any such exclusion does not apply to such Collateral Vessel); and

(d)    Commercial Invoice

a commercial invoice issued by the seller or Builder of such Collateral Vessel with respect to the purchase price of such Collateral Vessel.

2. No Claim

if required by the Agent, confirmation satisfactory to the Agent that, to the knowledge of the Security Parties, that neither the seller of the Collateral Vessel nor any other party who may have a claim pursuant to the relevant sale contract for the Collateral Vessel to which the Relevant Advance relates have any pending or threatened claims against the relevant Collateral Vessel or the relevant Guarantor and that there have been no breaches of the terms of the relevant sale contract for the Collateral Vessel any default thereunder;

3. Title and No Encumbrances

(a) evidence that the transfer of title to the Collateral Vessel to which the Relevant Advance relates from the Builder to the relevant Guarantor has been duly recorded with the relevant Registry free from Security Interest other than Permitted Security Interests; and

(b) evidence that any prior registration of the Collateral Vessel to which the Relevant Advance relates in the name of any third party in any ship register, if any, has been deleted;

4. Fees and Commissions

payment of any fees and commissions due from the Borrower to any of the Creditor Parties pursuant to the terms of Clause 21 or any other provision of the Finance Documents;

5. Finance Documents and Manager's Undertakings

the Mortgage, the Earnings Assignment, the Insurance Assignment, the Charter Assignment (if any), Earnings Account Pledge, the Shares Pledge or a Supplement to the Shares Pledge, as the case may be, and the Manager’s Undertakings in respect of the Collateral Vessel to which the Relevant Advance relates, each duly executed and delivered;

6. Mortgage Registration

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evidence that the Mortgage in respect of the Collateral Vessel to which the Relevant Advance relates has been registered against such Collateral Vessel through the relevant Registry under the laws and flag of the relevant Flag State;

7. Notices of Assignment

duly executed notices of assignment in the forms prescribed by the Finance Documents for the Collateral Vessel to which the Relevant Advance relates;

8. Insurance Opinion

an opinion from insurance consultants to the Agent in form and substance satisfactory to the Agent and made at the cost and expense of the Borrower, on the insurances effected or to be effected in respect of the Collateral Vessel to which the Relevant Advance relates, upon and following the Delivery Date of such Collateral Vessel;

9. Guarantor’s Process Agent

unless previously provided, a letter from the relevant Guarantor’s agent for receipt of service of proceedings referred to in the relevant Mortgage for the Collateral Vessel to which the Relevant Advance relates and in which it is or is to be appointed as that Guarantor’s agent accepting its appointment under such document;

10. Security Parties’ Process Agent

unless previously provided, a letter from the Borrower and the Manager’s agent for receipt of service of proceedings referred to in each Finance Document to which the relevant Security Party is a party and which is referred to in this Part B in respect of the Relevant Advance, accepting its appointment under each of the relevant Finance Documents;

11. Management Agreement

a copy, certified as a true and complete copy by an officer of the relevant Guarantor, of the Approved Management Agreement for the Collateral Vessel to which the Relevant Advance relates;

12. DOC and Application for SMC

a certified copy of the DOC and either (i) a certified copy of the interim SMC for the Collateral Vessel to which the Relevant Advance relates or (ii) evidence satisfactory to the Agent that the Operator has applied for an SMC for such Collateral Vessel;

13. ISPS Code Compliance

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(a) evidence satisfactory to the Agent that the Collateral Vessel to which the Relevant Advance relates is subject to a ship security plan which complies with the ISPS Code; and

(b) a copy dated no earlier than five (5) Business Days prior to the Delivery Date of such Collateral Vessel) of the interim ISSC for such Collateral Vessel;

14. UCC-1 Financing Statement

UCC-1 financing statement for each Security Party as shall be reasonably required by the Agent shall have been submitted for filing with such jurisdictions as the Agent may reasonably require.

15. Security Parties’ Counsel’s Opinion

an opinion of Seward & Kissel LLP, special counsel to the Security Parties, in form and substance satisfactory to the Agent;

16. Agent’s Counsel’s opinion

an opinion of Cozen O’Connor, special counsel to the Agent, in form and substance satisfactory to the Agent;

17. Financial Reports

all financial reports and Compliance Certificates required to be provided to the Agent by the Borrower and each Guarantor, in accordance with Clause 11.1(g) hereof shall have been provided and shall be in all respects acceptable to the Agent; provided, however, that if a Drawdown Notice shall be issued by the Borrower prior to the issuance of the first Compliance Certificate to be issued in accordance with Section 11.1(g), the Borrower shall provide a Compliance Certificate together with such Drawdown Notice;

18. Two appraisals from Approved Brokers establishing the Fair Market Value of the relevant Collateral Vessel;

19. Equity Contribution

evidence that all payments required to be made by the relevant Guarantor under the relevant Contract have been made; and

20. Further Conditions

any such other conditions, documents or evidence as may be reasonably required by the Agent.

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Schedule 5

TRANSFER CERTIFICATE

The Transferor and the Transferee accept exclusive responsibility for ensuring that this Certificate and the transaction to which it relates comply with all legal and regulatory requirements applicable to them respectively.

To:    [Name of Agent] for itself and for and on behalf of the Borrower, the Guarantors, the Security Trustee and each Lender, as defined in the Credit Agreement referred to below.

[Date]

1. This Certificate relates to a Credit Agreement dated as of January 30, 2015 (the “Credit Agreement”) made among Scorpio Bulkers Inc. (the “Borrower”), a corporation incorporated and existing under the laws of the Republic of the Marshall Islands, as borrower, the guarantors listed in Schedule 1-A to the Credit Agreement, as guarantors, the banks and financial institutions listed in Schedule 1-B to the Credit Agreement, as lenders (the “Lenders”, which expression includes their respective successors, transferees and assigns), and Deutsche Bank AG Filiale Deutschlandgeschäft, as lead arranger, administrative agent, security trustee and account bank, for a credit facility of up to $42,000,000.

2. In this Certificate, terms defined in the Credit Agreement shall, unless the contrary intention appears, have the same meanings when used in this Certificate and:

“Relevant Parties” means the Agent, the Borrower, the Guarantors, the Security Trustee and each Lender;

“Transferor” means [full name] of [lending office];

“Transferee” means [full name] of [lending office].

3. The effective date of this Certificate is ____, provided that this Certificate shall not come into effect unless it is signed by the Agent on or before that date.

4. The Transferor assigns to the Transferee absolutely all rights and interests (present, future or contingent) which the Transferor has as Lender under or by virtue of the Credit Agreement and every other Finance Document in relation to ____% of its Contribution, which percentage represents $____.

5. [By virtue of this Certificate and Clause 27 of the Credit Agreement, the Transferor is discharged [entirely from its Commitment which amounts to $____] [from ____ % of its Commitment, which percentage represents $_____ and the Transferee acquires a Commitment of $___.]

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6. The Transferee undertakes with the Transferor and each of the Relevant Parties that the Transferee will observe and perform all the obligations under the Finance Documents which Clause 27 of the Credit Agreement provides will become binding on it upon this Certificate taking effect.

7. The Agent, at the request of the Transferee (which request is hereby made) accepts, for the Agent itself and for and on behalf of every other Relevant Party, this Certificate as a Transfer Certificate taking effect in accordance with Clause 27 of the Credit Agreement.

8. The Transferor:

(a)    warrants to the Transferee and each Relevant Party that:

(i) the Transferor has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which are required in connection with this transaction; and

(ii) this Certificate is valid and binding as regards the Transferor;

(b) warrants to the Transferee that the Transferor is absolutely entitled, free of encumbrances, to all the rights and interests covered by the assignment in paragraph 4; and

(c) undertakes with the Transferee that the Transferor will, at its own expense, execute any documents which the Transferee reasonably requests for perfecting in any relevant jurisdiction the Transferee’s title under this Certificate or for a similar purpose.

9. The Transferee:

(a) confirms that it has received a copy of the Credit Agreement and each of the other Finance Documents;

(b) agrees that it will have no rights of recourse on any ground against the Transferor, the Agent, the Security Trustee or any Lender in the event that:

(i) any of the Finance Documents prove to be invalid or ineffective;

(ii) the Borrower or the Guarantors fail to observe or perform their obligations, or to discharge their respective liabilities, under any of the Finance Documents; and

(iii) it proves impossible to realize any asset covered by a Security Interest created by a Finance Document, or the proceeds of such assets are insufficient to discharge the liabilities of the Borrower or the Guarantors under any of the Finance Documents;

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(c) agrees that it will have no rights of recourse on any ground against the Agent, the Security Trustee or any Lender in the event that this Certificate proves to be invalid or ineffective;

(d) warrants to the Transferor and each Relevant Party that:

(i) it has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which it needs to take or obtain in connection with this transaction; and

(ii) that this Certificate is valid and binding as regards the Transferee; and

(e) confirms the accuracy of the administrative details set out below regarding the Transferee.

10. The Transferor and the Transferee each undertake with the Agent and the Security Trustee severally, on demand, fully to indemnify the Agent and/or the Security Trustee in respect of any claim, proceeding, liability or expense (including all legal expenses) which they or either of them may incur in connection with this Certificate or any matter arising out of it, except such as are shown to have been mainly and directly caused by the gross negligence or willful misconduct of the Agent’s or the Security Trustee’s own officers or employees.

11. The Transferee shall repay to the Transferor on demand so much of any sum paid by the Transferor under paragraph 10 as exceeds one-half of the amount demanded by the Agent or the Security Trustee in respect of a claim, proceeding, liability or expense which was not reasonably foreseeable at the date of this Certificate; but nothing in this paragraph shall affect the liability of each of the Transferor and the Transferee to the Agent or the Security Trustee for the full amount demanded by it.

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[Name of Transferor]                    [Name of Transferee]
By: _______________________            By: _______________________
Name:                             Name:
Title:                             Title:
Date:                             Date:
AGENT
Signed for itself and for and on behalf of itself

as Agent and for every other Relevant Party
DEUTSCHE BANK AG FILIALE DEUTSCHLANDGESCHÄFT

By: _______________________
Name:
Title:
Date:

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Schedule 6

LIST OF APPROVED BROKERS

Clarkson Plc

Galbraith’s Ltd.

Braemar Seascope Ltd.

RS Platou ASA

Maersk Broker

Arrow Sale and Purchase Ltd.

Astrup Fearnley

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Schedule 7

Payment Dates and Amounts

ADVANCE PAYMENT DATES AND AMOUNT

	COLLATERAL VESSEL DELIVERY PERIOD
	January 2015	August 2015
QUARTERLY PAYMENT DATE
3-15-2015 6-15-2015	$354,729.73 $354,729.73
9-15-2015	$354,729.73	$354,729.73
12-15-2015	$354,729.73	$354,729.73
3-15-2016	$354,729.73	$354,729.73
6-15-2016	$354,729.73	$354,729.73
9-15-2016	$354,729.73	$354,729.73
12-15-2016	$354,729.73	$354,729.73
3-15-2017	$354,729.73	$354,729.73
6-15-2017	$354,729.73	$354,729.73
9-15-2017	$354,729.73	$354,729.73
12-15-2017	$354,729.73	$354,729.73
3-15-2018	$354,729.73	$354,729.73
6-15-2018	$354,729.73	$354,729.73
9-15-2018	$354,729.73	$354,729.73
12-15-2018	$354,729.73	$354,729.73
3-15-2019	$354,729.73	$354,729.73
6-15-2019	$354,729.73	$354,729.73
9-15-2019	$354,729.73	$354,729.73

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12-15-2019	$354,729.73	$354,729.73
3-15-2020	$354,729.73	$354,729.73
6-15-2020	$354,729.73	$354,729.73
9-15-2020	$354,729.73	$354,729.73
12-15-2020	$354,729.73	$354,729.73
3-15-2021		$354,729.73
6 -15-2021		$354,729.73
Maturity Date Repayment Instalment	$354,729.73	$354,729.73
Maturity Date Balloon Installment	$12,131,756.75	$12,131,756.75

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Schedule 8

Mandatory Cost Formula

1. The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of compliance with (a) the requirements of the Financial Conduct Authority and/or the Prudential Regulation Authority (or, in any case, any other authority which replaces all or any of its functions) or (b) the requirements of the European Central Bank.

2. On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall calculate, as a percentage rate, a rate (the “Additional Cost Rate”) for each Lender, in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Agent as a weighted average of the Lenders’ Additional Cost Rates (weighted in proportion to the percentage participation of each Lender in the relevant Advance) and will be expressed as a percentage rate per annum.

3. The Additional Cost Rate for any Lender lending from a lending office in a Participating Member State will be the percentage notified by that Lender to the Agent. This percentage will be certified by that Lender in its notice to the Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender’s participation in all Advances made from that lending office) of complying with the minimum reserve requirements of the European Central Bank in respect of loans made from that lending office.

4. The Additional Cost Rate for any Lender lending from a lending office in the United Kingdom will be calculated by the Agent as follows:

percent per annum

where:

E is designed to compensate Lenders for amounts payable under all the Fees Rules and is calculated by the Agent as being the average of the most recent rates of charge supplied by the Lenders to the Agent pursuant to paragraph 6 below and expressed in pounds per £1,000,000.

5. For the purposes of this Schedule:

(a) “Special Deposits” has the meaning given to it from time to time under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of England;

(b) “Fees Rules” means the rules on periodic fees contained in the Financial Conduct Authority Fees Manual or the Prudential Regulation Authority Fees Manual (as

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the case may be) or such other law or regulation as may be in force from time to time in respect of the payment of fees for the acceptance of deposits;

(c) “Fee Tariffs” means the fee tariffs specified in the relevant Fees Rules under the activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee required pursuant to the relevant Fees Rules but taking into account any applicable discount rate);

(d) “Participating Member State” means any member state of the European Union that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Union relating to European Monetary Union; and

(e) “Tariff Base” has the meaning given to it in, and will be calculated in accordance with, the relevant Fees Rules.

6. If requested by the Agent, each Lender shall, as soon as practicable after publication by the Financial Conduct Authority or the Prudential Regulation Authority (as the case may be), supply to the Agent, the aggregate of rates of charge payable by that Lender to each the Financial Conduct Authority and the Prudential Regulation Authority pursuant to the relevant Fees Rules in respect of the relevant financial year of the Financial Conduct Authority or the Prudential Regulation Authority (as the case may be) (calculated for this purpose by that Lender as being the average of the Fee Tariffs applicable to that Lender for that financial year) and expressed in pounds per £1,000,000 of each Tariff Base of that Lender.

7. Each Lender shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the following information in writing on or prior to the date on which it becomes a Lender:

(a) the jurisdiction of its lending office; and

(b) any other information that the Agent may reasonably require for such purpose.

Each Lender shall promptly notify the Agent in writing of any change to the information provided by it pursuant to this paragraph.

8. The rates of charge of each Lender for the purpose of E above shall be determined by the Agent based upon the information supplied to it pursuant to paragraph 6 above and on the assumption that, unless a Lender notifies the Agent to the contrary, each Lender’s obligations in relation to cash ratio deposits and Special Deposits are the same as those of a typical bank from its jurisdiction of incorporation with a lending office in the same jurisdiction as its lending office.

9. The Agent shall have no liability to any person if such determination results in an Additional Cost Rate which over or under compensates any Lender and shall be entitled

Confidential

62

to assume that the information provided by any Lender pursuant to paragraphs 3, 6 and 7 above is true and correct in all respects.

10. The Agent shall distribute the additional amounts received as a result of the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender pursuant to paragraphs 3, 6 and 7 above.

11. Any determination by the Agent pursuant to this Schedule in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the absence of manifest error, be conclusive and binding on all parties.

12. The Agent may from time to time, after consultation with the Borrower and the Lenders, determine and notify to all parties any amendments which are required to be made to this Schedule in order to comply with any change in law, regulation or any requirements from time to time imposed by the Financial Conduct Authority, the Prudential Regulation Authority or the European Central Bank (or, in any case, any other authority which replaces all or any of its functions) and any such determination shall, in the absence of manifest error, be conclusive and binding on all parties.

Confidential

63

Appendix A

FORM OF CHARTER ASSIGNMENT

Confidential

64

Appendix B

FORM OF COMPLIANCE CERTIFICATE

Confidential

147

Appendix C

FORM OF EARNINGS ACCOUNT PLEDGE

[RESERVED]

Confidential

66

Appendix D

FORM OF EARNINGS ASSIGNMENT

Confidential

149

Appendix E

FORM OF GUARANTOR JOINDER AGREEMENT

Confidential

150

Appendix F

FORM OF FIRST PREFERRED SHIP MORTGAGE

Confidential

151

Appendix G

FORM OF MANAGER’S UNDERTAKING

Confidential

152

Appendix H

FORM OF NOTE

Confidential

153

Appendix I

FORM OF SHARES PLEDGE

Confidential

154

Appendix J

FORM OF INSURANCE ASSIGNMENT

Confidential

73

Appendix K

FORM OF SUPPLEMENT TO SHARES PLEDGE

LEGAL\21432790\9 18231.0001.000/356242.000

Confidential

156

EX-4.30

Exhibit 4.30

Execution version

Dated February 27, 2015

(1) SBI Puro Shipping Company Limited    (as Borrower)

(2) Scorpio Bulkers Inc.
(as Guarantor)

(3) The Financial Institutions
listed in Schedule 1
(as Original Lenders)

(4) ABN AMRO Bank N.V.
(as Arranger)

(5) ABN AMRO Bank N.V.
(as Agent)

(6) ABN AMRO Bank N.V.
(as Swap Provider)

(7) ABN AMRO Bank N.V.
(as Security Agent)

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1313\01-53-03754

Contents

Page

Section 1Interpretation        2

1Definitions and Interpretation        2

Section 2The Loan        22

2The Loan        22

3Purpose        22

4Conditions of Utilisation        22

Section 3Utilisation        24

5Advance        24

Section 4Repayment, Prepayment and Cancellation    25

6Repayment        25

7Illegality, Prepayment and Cancellation        25

Section 5Costs of Utilisation        27

8Interest        27

9Interest Periods        27

10Changes to the Calculation of Interest        28

11Fees        29

Section 6Additional Payment Obligations        30

12Tax Gross Up and Indemnities        30

13Increased Costs        34

14Other Indemnities        36

15Mitigation by the Lenders        38

16Costs and Expenses        38

Section 7Security and Application of Moneys        40

17Security Documents and Application of Moneys    40

18Guarantee and Indemnity        43

Section 8Representations, Undertakings and Events of Default    47

19Representations        47

20Information Undertakings        52

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21Financial Covenants        55

22General Undertakings        57

23Events of Default        64

Section 9Changes to Parties        71

24Changes to the Lenders        71

25Changes to the Security Parties        76

Section 10The Finance Parties        77

26Role of the Agent, the Security Agent and the Arranger    77

27Conduct of Business by the Finance Parties    90

28Sharing among the Finance Parties        90

Section 11Administration        92

29Payment Mechanics        92

30Set-Off        96

31Notices        96

32Calculations and Certificates        98

33Partial Invalidity        99

34Remedies and Waivers        99

35Amendments and Waivers        99

36Confidentiality        102

37Disclosure of Lender Details by Agent        106

38Counterparts        107

Section 12Governing Law and Enforcement        108

39Governing Law        108

40Enforcement        108

41Patriot Act Notice        109

Schedule 1The Original Lenders        110

Schedule 2Part I Conditions Precedent        111

Part II Conditions Subsequent115

Schedule 3Drawdown Request        116

Schedule 4Mandatory Cost Formula        117

Schedule 5Form of Transfer Certificate        120

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Schedule 6Form of Assignment Agreement        123

Schedule 7Form of Compliance Certificate        126

LONLIVE\20885848.6

Loan Agreement

Dated                                      2015

Between:

(1) SBI Puro Shipping Company Limited, a company incorporated under the laws of the Republic of the Marshall Islands, with registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960 (the"Borrower"); and

(2) Scorpio Bulkers Inc., a company incorporated under the laws of the Republic of the Marshall Islands, with registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960 (the"Guarantor"); and

(3) The Financial Institutions listed in Schedule 1 (The Original Lenders), each acting through its Facility Office (together the "Original Lenders" and each an "Original Lender"); and

(4) ABN AMRO Bank N.V., acting as arranger through its office at Coolsingel 93, 3012 AE Rotterdam, The Netherlands (in that capacity, the "Arranger"); and

(5) ABN AMRO Bank N.V., acting as agent through its office at Daalsesingel 71, 3511 SW Utrecht, The Netherlands (in that capacity, the "Agent"); and

(6) ABN AMRO Bank N.V., acting as swap provider through its office at Coolsingel 93, 3012 AE Rotterdam, The Netherlands (in that capacity, the "Swap Provider"); and

(7) ABN AMRO Bank N.V., acting as security agent through its office at Coolsingel 93, 3012 AE Rotterdam, The Netherlands (in that capacity, the "Security Agent").

Preliminary

Each of the Original Lenders has agreed to advance to the Borrower its Commitment aggregating, with all the other Commitments, up to $26,000,000 to assist the Borrower to refinance the Vessel.

It is agreed as follows:

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Section 1 Interpretation

1 Definitions and Interpretation

1.1 Definitions In this Agreement:

"Acceptable Bank" means a bank or financial institution which has a rating for its long-term unsecured and non-credit-enhanced debt obligations of BBB- or higher by Standard & Poor's Rating Services or Fitch Ratings Ltd or Baa3 or higher by Moody's Investors Service Limited or a comparable rating from an internationally recognised credit rating agency.

"Account" means the bank account to be opened in the name of the Borrower with the Account Bank and designated as the "Account".

"Account Bank" means ABN AMRO Bank N.V., acting through its branch at Coolsingel 93, 3012 AE Rotterdam, The Netherlands or any other bank or financial institution which at any time, with the Security Agent's prior written consent, holds the Account.

"Account Security Deed" means the account security deed referred to in Clause 17.1.4 (Security Documents).

"Administration" has the meaning given to it in paragraph 1.1.3 of the ISM Code.

"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 provided that in respect of the Guarantor only an Affiliate of the Guarantor shall only include (i) any Subsidiary of the Guarantor or (ii) any Holding Company of the Guarantor that either (a) directly or indirectly owns more than 20% of any class of the capital stock of the Guarantor or (b) has possession, directly or indirectly, of the power to vote more than 20% of the voting stock of the Guarantor.

"Annex VI" means Annex VI (Regulations for the Prevention of Air Pollution from Ships) to the International Convention for the Prevention of Pollution from Ships 1973 (as modified in 1978 and 1997).

"Approved Pooling Arrangement" means, in relation to the Vessel, the Scorpio Cape Pool and any other pooling arrangement:

(a) proposed by the Borrower;

(a) run by any Affiliate of the Commercial Manager; and

(b) approved in writing by the Agent prior to that Vessel's entry into such pooling arrangement.

"Approved Sub-manager" means Zenith Ship Management, Astor Shipmanagement, Synergy Marine, C.P. Offen, Optimum Ship Services Ltd and any Affiliates or Subsidiary of the Technical Manager and the Commercial Manager.

"Approved Shipbroker" means each of Arrow Sale and Purchase Limited, Braemar Seascope Limited, Clarkson PLC, Astrup Fearnleys AS, Howe Robinson, Maersk Brokers, Galbraith's Ltd. and Affinity Shipping LLP.

"Assignments" means all the forms of assignment referred to in Clause 17.1.2 (Security Documents).

"Assignment Agreement" means an agreement substantially in the form set out in Schedule 6 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and assignee.

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

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"Availability Period" means the period from and including the date of this Agreement to and including 31 March 2015.

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

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

exceeds:

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

"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in London, New York and Amsterdam.

"Capitalized Lease" means, as applied to any person, any lease of any property (whether real, personal or mixed) of which the discounted present value of the rental obligations of such person, as lessee, in conformity with US GAAP, is required to be capitalized on the balance sheet of such person and "Capitalized Lease Obligation" is defined to mean the rental obligations, as aforesaid, under a Capitalized Lease.

"Charged Property" means all of the assets of the Security Parties which from time to time are, or are expressed to be, the subject of the Security Documents.

"Charter" means any charter or contract of employment in respect of the Vessel that, inclusive of options, is capable of exceeding 12 months in duration, but excluding:

^(a)  any charter pursuant to an Approved Pooling Arrangement; and

^(b)  any other charter or contract of employment in respect of the Vessel that the Borrower enters into with a company within the Group.

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

"Commercial Manager" means Scorpio Commercial Management S.A.M., a company incorporated under the laws of Monaco with its registered office at Le Millenium, 9, Boulevard Charles III, MC-98000 Monaco.

"Commitment" means:

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

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

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

"Commitment Fee" means the commitment fee to be paid by the Borrower to the Agent under Clause 11.1 (Commitment Fee).

"Compliance Certificate" means a certificate substantially in the form set out in Schedule 7 (Form of Compliance Certificate).

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

(a) any Security Party or any of its advisers; or

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

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

(i) is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 36 (Confidentiality); or

(i) is identified in writing at the time of delivery as non-confidential by any Security Party or any of its advisers; or

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

"Confidentiality Undertaking" means a confidentiality undertaking substantially in a recommended form of the Loan Market Association at the relevant time.

"Confirmation" means a Confirmation exchanged or deemed to be exchanged between the Swap Provider and the Borrower as contemplated by the Master Agreement.

"Credit Support Document" means any document described as such in the Master Agreement and any other document referred to in any such document which has the effect of creating security in favour of any of the Finance Parties.

"Credit Support Provider" means any person (other than the Borrower) described as such in the Master Agreement.

"CTA" means the Corporation Tax Act 2009.

"Default" means an Event of Default or any event or circumstance 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.

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

"Disruption Event" means either or both of:

(a) a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the 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

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

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

(ii) from communicating with other Parties in accordance with the terms of the Finance Documents,

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

"DOC" means, in relation to the ISM Company, a valid Document of Compliance issued for the ISM Company by the Administration under paragraph 13.2 of the ISM Code.

"Drawdown Date" means the date on which the Loan is advanced under Clause 5 (Advance).

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

"Earnings" means all hires, freights, pool income and other sums payable to or for the account of the Borrower in respect of the Vessel including (without limitation) all remuneration for salvage and towage services, demurrage and detention moneys, contributions in general average, compensation in respect of any requisition for hire, and damages and other payments (whether awarded by any court or arbitral tribunal or by agreement or otherwise) for breach, termination or variation of any contract for the operation, employment or use of the Vessel.

"Encumbrance" means a mortgage, charge, assignment, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

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

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

"Environmental Incident" means:

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

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

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

LONLIVE\20885848.6    Page 6

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

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

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

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and any successor thereto.

"ERISA Affiliate" means each person (and defined in Section 3(9) of ERISA) which together with the Borrower or the Guarantor would be deemed to be a "single employer" within the meaning of Section 414(b), (c), (m) or (o) of the Uniform Commercial Code (as from time to time in effect in any applicable jurisdiction).

"Event of Default" means any event or circumstance specified as such in Clause 23 (Events of Default).

"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.

"Facility Period" means the period beginning on the date of this Agreement and ending on the date when the whole of the Indebtedness has been paid in full and the Security Parties have ceased to be under any further actual or contingent liability to the Finance Parties under or in connection with the Finance Documents.

"FATCA" means:

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

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

(c) 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 governmental or taxation authority in any other jurisdiction.

"FATCA Application Date" means:

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

(b) in relation to a "withholdable payment" described in section 1473(1)(A)(ii) of the Code (which relates to "gross proceeds" from the disposition of property of a type that can produce interest from sources within the US), 1 January 2017; or

(c) in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within (a) or (b), 1 January 2017,

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

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"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 Arranger, the Borrower and the Guarantor (or the Agent, the Borrower and the Guarantor or the Security Agent, the Borrower and the Guarantor) setting out any of the fees referred to in Clause 11 (Fees).

"Finance Documents" means this Agreement, the Master Agreement, the Security Documents, the Fee Letter and any other document designated as such by the Agent and the Borrower and "Finance Document" means any one of them.

"Finance Parties" means the Arranger, the Agent, the Security Agent, the Swap Provider and the Lenders and "Finance Party" means any one of them.

"Financial Indebtedness" means, with respect to any person (the "Debtor") at any date of determination (without duplication):

(a) all obligations of the Debtor for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the Debtor;

(b) all obligations of the Debtor evidenced by bonds, debentures, notes or other similar instruments;

(c) all obligations of the Debtor in respect of any acceptance credit, guarantee or letter of credit facility or equivalent made available to the Debtor (including reimbursement obligations with respect thereto);

(d) all obligations of the Debtor to pay the deferred purchase price of property or services, which purchase price is due more than six months after the date of placing such property in service or taking delivery thereto or the completion of such services, except trade payables;

(e) all Capitalized Lease Obligations of the Debtor as lessee;

(f) all such Financial Indebtedness as described in sub paragraphs (a) to (e) of persons other than the Debtor secured by an Encumbrance on any asset of the Debtor, whether or not such Financial Indebtedness is assumed by the Debtor, provided that the amount of such Financial Indebtedness shall be the lesser of (i) the fair market value of such asset at such date of determination and (ii) the amount of such Financial Indebtedness; and

(g) all such Financial Indebtedness as described in sub-paragraphs (a) to (e) of persons other than the Debtor under any guarantee, indemnity to similar obligation entered into by the Debtor to the extent such Financial Indebtedness is guaranteed, indemnified, etc. by the Debtor.

The amount of Financial Indebtedness of any Debtor at any date shall be the outstanding balance at such date of all unconditional obligations as described above and, with respect to contingent obligations described in (f) and (g) above, the maximum liability upon the occurrence of the contingency giving rise to the obligation, provided that (i) the amount outstanding at any time of any Financial Indebtedness issued with an original issue discount is the face amount of such Financial Indebtedness less the remaining unamortized portion of such original issue discount of such Financial Indebtedness at such time, and (ii) Financial Indebtedness shall not include any liability for taxes.

"FMV" means the fair market value of the Vessel as conclusively determined by the arithmetic average of valuations issued by two Approved Shipbrokers on the basis of a charter-free sale for prompt delivery for cash at arm's length on normal commercial terms as between a willing seller and a willing buyer.

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"Group"means the Guarantor and its Subsidiaries.

"Guarantee" means the guarantee and indemnity of the Guarantor contained in Clause 18 (Guarantee and Indemnity) and referred to in Clause 17.1.3 (Security Documents).

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

"IAPPC" means a valid international air pollution prevention certificate for the Vessel issued under Annex VI.

"Impaired Agent" means the Agent at any time when:

(a) it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment;

(b) the Agent otherwise rescinds or repudiates a Finance Document; or

(c) an Insolvency Event has occurred and is continuing with respect to the Agent;

unless, in the case of (a):

(i) its failure to pay is caused by:

(A)    administrative or technical error; or

(B)    a Disruption Event; and

payment is made within three Business Days of its due date; or

(ii) the Agent is disputing in good faith whether it is contractually obliged to make the payment in question.

"Indebtedness" means the aggregate from time to time of: the amount of the Loan outstanding; all accrued and unpaid interest on the Loan; and all other sums of any nature (together with all accrued and unpaid interest on any of those sums) payable to any of the Finance Parties under all or any of the Finance Documents.

"Insolvency Event" in relation to an entity means that the entity:

(a) is dissolved (other than pursuant to a consolidation, amalgamation or merger);

(b) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due;

(c) makes a general assignment, arrangement or composition with or for the benefit of its creditors;

(d) institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation by it or such regulator, supervisor or similar official;

(e) has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not described in (d) and:

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(i) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation; or

(ii) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof;

(f) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger);

(g) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets (other than, for so long as it is required by law or regulation not to be publicly disclosed, any such appointment which is to be made, or is made, by a person or entity described in (d));

(h) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter;

(i) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in (a) to (h); or

takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.

"Insurances" means all policies and contracts of insurance (including all entries in protection and indemnity or war risks associations) which are from time to time taken out or entered into in respect of or in connection with the Vessel or her increased value or the Earnings and (where the context permits) all benefits under such contracts and policies, including all claims of any nature and returns of premium.

"Intercompany Loan Agreement" means any loan agreement entered into during the Facility Period between an entity within the same group as the Borrower as lender and the Borrower as borrower.

"IntercompanyLoanAssignment" means any assignment of an Intercompany Loan Agreement entered into pursuant to Clause 22.17 (No borrowings) and referred to in Clause 17.1.7 (Security Documents) and to be in a form acceptable to the Agent.

"Intercompany Loans" means any loan or loans to be made available to the Borrower pursuant to an Intercompany Loan Agreement.

"Intercompany Subordination and Assignment Agreement" means any subordination and assignment agreement in respect of any Intercompany Loans entered into pursuant to Clause 22.17 (No borrowings) and referred to in Clause 17.1.8 (Security Documents) and to be in a form acceptable to the Agent.

"Interest Payment Date" means each date for the payment of interest in accordance with Clause 8.2 (Payment of interest).

"Interest Period" means 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).

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

"ISM Company" means, at any given time, the company responsible for the Vessel's compliance with the ISM Code under paragraph 1.1.2 of the ISM Code.

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"ISPS Code" means the International Ship and Port Facility Security Code.

"ISSC" means a valid international ship security certificate for the Vessel issued under the ISPS Code.

"ITA" means the Income Tax Act 2007.

"Joint Venture" means any joint venture entity, whether a company, unincorporated firm, undertaking, association, joint venture or partnership or any other entity.

"Legal Opinion" means any legal opinion delivered to the Agent under Clause 4.1 (Initial conditions precedent) or Clause 4.3 (Conditions subsequent).

"Legal Reservations" means:

(a) 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;

(b) 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;

(c) 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 general application in the Legal Opinions.

"Lender" means:

(a) any Original Lender; and

(b) any bank, financial institution or other entity which has become a Party as a Lender in accordance with Clause 24 (Changes to the Lenders),

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

"LIBOR" means:

(a) the applicable Screen Rate; or

(b) (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,

as of 11.00 a.m. (London time) on the Quotation Day for the offering of deposits in dollars in an amount comparable to the Loan (or any relevant part of the Loan) and for a period comparable to the relevant Interest Period and, if that rate is less than zero, LIBOR shall be deemed to be zero.

"Loan" means the aggregate amount advanced or to be advanced by the Lenders to the Borrower under Clause 2 (The Loan) or, where the context permits, the principal amount advanced and for the time being outstanding.

"Majority Lenders" means a Lender or Lenders whose Commitments aggregate more than 66²/₃% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 66²/₃% of the Total Commitments immediately prior to the reduction).

"Management Agreement" means the master agreement dated 27 September 2013 entered into between Scorpio Bulkers Inc., the Technical Manager and the Commercial Manager:

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(a) as acceded to in respect of the commercial management of the Vessel pursuant to a confirmation letter dated 17 September 2014 between the Borrower, Scorpio Bulkers Inc. and the Commercial Manager; and

(b) as acceded to in respect of the technical management of the Vessel pursuant to a confirmation letter dated 18 July 2014 between the Borrower, Scorpio Bulkers Inc. and the Technical Manager.

"Managers" means:

(a) in relation to the commercial management of the Vessel, the Commercial Manager; and

(b) in relation to the technical management of the Vessel, the Technical Manager,

or any Approved Sub-manager, and such other commercial and/or technical managers of the Vessel nominated by the Borrower as the Agent (acting on the instructions of the Majority Lenders) may approve.

"Managers' Undertakings" means the written undertakings of the Managers whereby, throughout the Facility Period unless otherwise agreed by the Agent:

(a) they will remain the commercial or technical managers of the Vessel (as the case may be);

(b) they will not, without the prior written consent of the Agent, subcontract or delegate the commercial or technical management of the Vessel (as the case may be) to any third party other than an Approved Sub-manager provided that the Borrower shall procure from such Approved Sub-manager a Manager's Undertaking;

(c) if reasonably required by the Agent, the interests of the Managers in the Insurances will be assigned to the Security Agent with first priority; and

(d) (following the occurrence of an Event of Default) all claims of the Managers against the Borrower shall be subordinated to the claims of the Finance Parties under the Finance Documents.

"Mandatory Cost" means the percentage rate per annum calculated by the Agent in accordance with Schedule 4 (Mandatory Cost Formula).

"Margin" means:

(a) for the period commencing on the date of this Agreement and ending on the day before the date in the first calendar month after the Drawdown Date which numerically corresponds to the Drawdown Date (and if no such numerically corresponding date, the last date in the relevant calendar month), 2.00% per annum;

(b) for the period commencing on the date in the first calendar month after the Drawdown Date which numerically corresponds to the Drawdown Date (and if no such numerically corresponding date, the first date in the next calendar month) and ending on the day before the date in the second calendar month after the Drawdown Date which numerically corresponds to the Drawdown Date (and if no such numerically corresponding date, the last date in the relevant calendar month), 2.25% per annum;

(c) for the period commencing on the date in the second calendar month after the Drawdown Date which numerically corresponds to the Drawdown Date (and if no such numerically corresponding date, the first date in the next calendar month) and ending on the day before the date in the third calendar month after the Drawdown Date which numerically corresponds to the Drawdown Date (and if no such numerically corresponding date, the last date in the relevant calendar month), 2.50% per annum;

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(d) for the period commencing on the date in the third calendar month after the Drawdown Date which numerically corresponds to the Drawdown Date (and if no such numerically corresponding date, the first date in the next calendar month) and ending on the day before the date in the fourth calendar month after the Drawdown Date which numerically corresponds to the Drawdown Date (and if no such numerically corresponding date, the last date in the relevant calendar month), 2.75% per annum;

(e) for the period commencing on the date in the fourth calendar month after the Drawdown Date which numerically corresponds to the Drawdown Date (and if no such numerically corresponding date, the first date in the next calendar month) and ending on the day before the date in the fifth calendar month after the Drawdown Date which numerically corresponds to the Drawdown Date (and if no such numerically corresponding date, the last date in the relevant calendar month), 3.00% per annum; and

(f) thereafter, 3.25% per annum.

"Master Agreement" means any ISDA Master Agreement (or any other form of master agreement relating to interest or currency exchange transactions) entered into between the Swap Provider and the Borrower during the Facility Period, including each Schedule to any Master Agreement and each Confirmation exchanged under any Master Agreement.

"Master Agreement Proceeds" means any and all sums due and payable to the Borrower under the Master Agreement following an Early Termination Date (subject always to all rights of netting and set-off contained in the Master Agreement) and all rights to require and enforce the payment of those sums.

"Master Agreement Proceeds Assignment" means the deed of assignment referred to in Clause 17.1.6 (Security Documents).

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

(a) the business, property or financial condition of the Borrower or the Guarantor; or

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

(c) the validity or enforceability of, or the effectiveness or ranking of any Encumbrance granted or purporting to be granted pursuant to any of, the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents; or

(d) the rights or remedies of any Finance Party under any of the Finance Documents.

"Maximum Loan Amount" means the lesser of:

(a) $26,000,000; and

(b) 50% of the FMV of the Vessel evidenced by the valuation received by the Agent under Clause 4.1 (Initial conditions precedent).

"Mortgage" means the first preferred mortgage referred to in Clause 17.1.1 (Security Documents).

"New Lender" has the meaning given to that term in Clause 24.1 (Assignments and transfers by the Lenders).

"Non-Consenting Lender" has the meaning given to that term in Clause 35.3.4 (Replacement of Lender).

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"Operating Expenses" means expenses reasonably incurred by the Borrower in connection with the ownership of the Vessel including but not limited to operation, employment, maintenance, repair and insurance of the Vessel.

"Original Financial Statements" means the audited consolidated financial statements of the Guarantor for the financial year ended 31 December 2013.

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

"Party" means a party to this Agreement.

"Patriot Act" means the United States Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Improvement and Reauthorization Act of 2005 (H.R. 3199).

"Permitted Disposal" means any sale, lease, licence, transfer or other disposal which is on arm's length terms:

(a) of assets in exchange for other assets comparable or superior as to type, value and quality;

(b) of obsolete or redundant vehicles, plant and equipment for cash; and

(c) arising as a result of any Permitted Encumbrance.

"Permitted Encumbrance" means:

(a) any Encumbrance which has the prior written approval of the Agent;

(b) any Encumbrance created pursuant a Finance Document;

(c) any Encumbrance arising by operation of law and in the ordinary course of trading and not as a result of any default or omission by a Security Party;

(d) any Quasi-Security arising as a result of a disposal which is a Permitted Disposal; or

(e) any liens for current crews' wages and salvage and liens incurred in the ordinary course of trading the Vessel up to an aggregate amount at any time not exceeding $1,000,000.

"Plan" means any "employee benefit plan" as defined in Section 3(3) of ERISA that is subject to Title IV of ERISA which is or was sponsored, maintained or contributed to by, or required to be contributed to by any Security Party or any of their respective ERISA Affiliates.

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

"Quasi-Security" has the meaning given to that term in Clause 22.9 (Negative pledge).

"Quotation Day" means, in relation to any period for which an interest rate is to be determined three 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).

"Receiver" means a receiver or receiver and manager or administrative receiver of the whole or any part of the Charged Property.

"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 Banks

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could borrow funds in the London interbank market in dollars and for the relevant period, were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in dollars and for that period.

"Reference Banks" means, in relation to LIBOR and Mandatory Cost, the principal London offices of ABN AMRO Bank N.V., ING Bank N.V. and Credit Agricole Corporate and Investment Bank or such other banks as may be appointed by the Borrower with the prior written approval of the Agent.

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

"Relevant Documents" means the Finance Documents, the Management Agreement, the Manager's Undertakings and any Intercompany Loan Agreement.

"Relevant Interbank Market" means the London interbank market.

"Relevant Jurisdiction" means, in relation to a Security Party:

(a) its Original Jurisdiction;

(b) any jurisdiction where any asset subject to or intended to be subject to a Security Document to be executed by it is situated; and

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

"Repayment Instalment" means any instalment of the Loan to be repaid by the Borrower under Clause 6 (Repayment).

"Repeating Representations" means each of the representations set out in Clause 19.1.1 (Status) to Clause 19.1.6 (Governing law and enforcement), Clause 19.1.10 (No default) to Clause 19.1.19 (Pari passu ranking) and Clause 19.1.26 (Patriot Act).

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

"Requisition Compensation" means all compensation or other money which may from time to time be payable to the Borrower as a result of the Vessel being requisitioned for title or in any other way compulsorily acquired (other than by way of requisition for hire).

"Restricted Person" means a person that is (i) listed on, or owned or controlled by a person listed on any Sanctions List; (ii) located in, incorporated under the laws of, or owned or controlled by, or acting on behalf of, a person located in or organised under the laws of a country or territory that is the target of country-wide Sanctions (including, without limitation, at the date of this agreement Cuba, Iran, Myanmar (Burma), North Korea, Syria and Sudan); or (iii) otherwise a target of Sanctions.

"Sanctions" means any economic sanctions laws, regulations, embargoes or restrictive measures administered, enacted or enforced by: (i) the United States government; (ii) the United Nations; (iii) the European Union or its Member States, including without limitation, the United Kingdom; (iv) any country to which any Security Party or any other member of the Group or any Affiliate of any of them is bound; or (v) 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", and together the "Sanctions Authorities").

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"Sanctions List" means the “Specially Designated Nationals and Blocked Persons” list issued by OFAC, the Consolidated List of Financial Sanctions Targets and Investment Ban List issued by HMT, or any similar list issued or maintained or made public by any of the Sanctions Authorities.

"Scorpio Cape Pool" means, in relation to the Vessel, a pooling arrangement whereby the pool is managed by the Commercial Manager.

"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 the relevant currency and 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 the service ceases to be available, the Agent may specify another page or service displaying the relevant rate after consultation with the Borrower.

"Secured Parties" means each Finance Party from time to time party to this Agreement and any Receiver or Delegate.

"Security Documents" means the Mortgage, the Assignments, the Guarantee, the Account Security Deed, the Share Pledge, the Master Agreement Proceeds Assignment, any Intercompany Loan Assignment, any Intercompany Subordination and Assignment Agreement and any other Credit Support Documents or (where the context permits) any one or more of them, and any other agreement or document which may at any time be executed by any person as security for the payment of all or any part of the Indebtedness and "Security Document" means any one of them.

"Security Parties" means the Borrower, the Guarantor, any other Credit Support Provider, and any other person who may at any time during the Facility Period be liable for, or provide security for, all or any part of the Indebtedness (excluding always the Managers), and "Security Party" means any one of them.

"Share Pledge" means the charge or charges of the issued share capital of the Borrower referred to in Clause 17.1.5 (Security Documents).

"SMC" means a valid safety management certificate issued for the Vessel by or on behalf of the Administration under paragraph 13.7 of the ISM Code.

"Subsidiary" means a subsidiary undertaking within the meaning of section 1162 of the Companies Act 2006.

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

"Technical Manager" means Scorpio Ship Management S.A.M., a company incorporated under the laws of Monaco with its registered office at Le Millenium, 9, Boulevard Charles III, MC-98000 Monaco.

"Termination Date" means the earlier of:

(a) the date falling six months after the Drawdown Date; and

(b) the date ten Business Days after the date on which the Chinese Ministry of Finance has approved the transaction contemplated by the term sheet issued by ABN AMRO Bank N.V. dated 17 September 2014 and drawings can be made under such transaction.

"Total Commitments" means the aggregate of the Commitments.

"TotalLoss" means:

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

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

(c) the capture, seizure, arrest, detention, hijacking, theft, condemnation as prize, confiscation or forfeiture of the Vessel (not falling within (b)), unless the Vessel is released and returned to the possession of the Borrowerwithin 30 days after the capture, seizure, arrest, detention, hijacking, theft, condemnation as prize, confiscation or forfeiture in question.

"Transaction" means a transaction entered into between the Swap Provider and the Borrower governed by the Master Agreement.

"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:

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

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

"Treasury Transactions" means any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price.

"Trust Property" means:

(a) all benefits derived by the Security Agent from Clause 17 (Security and Application of Moneys); and

(b) all benefits arising under (including, without limitation, all proceeds of the enforcement of) each of the Security Documents,

with the exception of any benefits arising solely for the benefit of the Security Agent.

"Unpaid Sum" means any sum due and payable but unpaid by any Security Party under the Finance Documents.

"US" means the United States of America.

"US GAAP" means generally accepted accounting principles in the United States of America as in effect from time to time.

"US Tax Obligor" means:

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

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

"VAT" means:

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

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

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"Vessel" means the capesize bulk carrier vessel "SBI PURO" currently registered under the flag of flag of the Republic of the Marshall Islands in the ownership of the Borrower, and everything now or in the future belonging to her on board and ashore.

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

1.2.1 any "Lender", the "Borrower", the "Guarantor",the "Arranger", the "Agent", the "Swap Provider", any "Secured Party", the "Security Agent", any "Finance Party" or any "Party" shall be construed so as to include its successors in title, permitted assignees and permitted transferees;

1.2.2 "assets" includes present and future properties, revenues and rights of every description;

1.2.3 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;

1.2.4 a "group of Lenders" includes all the Lenders;

1.2.5 "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;

1.2.6 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);

1.2.7 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;

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

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

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

1.4 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.

1.5 Default A Default is "continuing" if it has not been remedied or waived.

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

1.7 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.

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

Section 2 The Loan

2 The Loan

2.1 Amount Subject to the terms of this Agreement, the Lenders agree to make available to the Borrower a term loan not exceeding the Maximum Loan Amount.

2.2 Finance Parties' rights and obligations

2.2.1 The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

2.2.2 The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from a Security Party shall be a separate and independent debt.

2.2.3 A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.

3 Purpose

3.1 Purpose The Borrower shall apply the Loan for the purposes referred to in the Preliminary.

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

4 Conditions of Utilisation

4.1 Initialconditions precedent

4.1.1 The Lenders will only be obliged to comply with Clause 5.3 (Lenders' participation) in relation to the advance of the Loan if on or before the Drawdown Date, the Agent has received all of the documents and other evidence listed in Part I of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Agent. The Agent shall notify the Borrower and the Lenders promptly upon being so satisfied.

4.1.2 Other than to the extent that the Majority Lenders notify the Agent in writing to the contrary before the Agent gives the notification described in Clause 4.1.1, the Lenders authorise (but do not require) the Agent to give that notification. The Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.

4.2 Further conditions precedent

4.2.1 The Lenders will only be obliged to advance the Loan if on the date of the Drawdown Request and on the proposed Drawdown Date:

(a) no Default has occurred and is continuing or would result from the advance of the Loan; and

(b) the representations made by the Borrower and the Guarantor under Clause 19 (Representations) are true.

4.3 Conditions subsequent The Borrower undertakes to deliver or to cause to be delivered to the Agent within seven days after the Drawdown Date the additional documents and other evidence listed in Part II of Schedule 2 (Conditions Subsequent).

4.4 No waiver If the Lenders in their sole discretion agree to advance all or any part of the Loan to the Borrower before all of the documents and evidence required by Clause 4.1 (Initial conditions precedent) have been delivered to or to the order of the Agent, the Borrower undertakes to deliver all outstanding documents and evidence to or to the order of the Agent no later than seven days after the Drawdown Date or such other date specified by the Agent (acting on the instructions of all the Lenders).

The advance of all or any part of the Loan under this Clause 4.4 shall not be taken as a waiver of the Lenders' right to require production of all the documents and evidence required by Clause 4.1 (Initial conditions precedent).

4.5 Form and content All documents and evidence delivered to the Agent under this Clause shall:

4.5.1 be in form and substance acceptable to the Agent; and

4.5.2 if required by the Agent, be certified, notarised, legalised or attested in a manner acceptable to the Agent.

Section 3 Utilisation

5 Advance

5.1 Delivery of a Drawdown Request The Borrower may request the Loan to be advanced, in a single advance, by delivery to the Agent of a duly completed Drawdown Request not more than ten and not fewer than three Business Days before the proposed Drawdown Date. Any Drawdown Request which becomes effective, in accordance with Clause 31.3, after 10.00 a.m. (Amsterdam time) in the place of receipt shall be deemed only to become effective on the following day.

5.2 Completion of a Drawdown Request A Drawdown Request is irrevocable and will not be regarded as having been duly completed unless:

5.2.1 it is signed by an authorised signatory of the Borrower;

5.2.2 the proposed Drawdown Date is a Business Day within the Availability Period; and

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

5.3 Lenders' participation

5.3.1 Subject to Clauses 2 (The Loan), 3 (Purpose) and 4 (Conditions of Utilisation), each Lender shall make its participation in the Loan available by the Drawdown Date through its Facility Office.

5.3.2 The amount of each Lender's participation in the Loan will be equal to the proportion borne by its Commitment to the Total Commitments.

5.4 Cancellation of Commitment The Commitment shall be cancelled on the earlier of (i) the Drawdown Date and (ii) the end of the Availability Period, to the extent that it is unutilised at that time.

Section 4 Repayment, Prepayment and Cancellation

6 Repayment

6.1 Repayment of Loan The Borrower agrees to repay the Loan to the Agent for the account of the Lenders on the Termination Date. All outstanding Indebtedness shall be due and payable on the Termination Date.

6.2 Reborrowing The Borrower may not reborrow any part of the Loan which is repaid or prepaid.

7 Illegality, Prepayment and Cancellation

7.1 Illegality If it becomes unlawful in any jurisdiction (other than by reason of Sanctions) for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in the Loan or it becomes unlawful for any Affiliate of a Lender for that Lender to do so:

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

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

7.1.5 the Borrower shall repay that Lender's participation in the Loan on the last day of the current Interest Period or, if earlier, the date specified by that Lender in the notice delivered to the Agent and notified by the Agent to the Borrower (being no earlier than the last day of any applicable grace period permitted by law).

7.2 Voluntary cancellation The Borrower may, if it gives the Agent not less than ten Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being an amount which is an integral multiple of $1,000,000) of the undrawn amount of the Loan. Any cancellation under this Clause 7.2 shall reduce the Commitments of the Lenders rateably.

7.3 Voluntary prepayment of Loan The Borrower may prepay the whole or any part of the Loan (but, if in part, being an amount which is an integral multiple of $1,000,000) subject to giving the Agent not less than ten Business Days' (or such shorter period as the Majority Lenders may agree) prior notice.

7.4 Right of cancellation and prepayment in relation to a single Lender

7.4.1 If:

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

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

the Borrower may, whilst the circumstance giving rise to the requirement for that increase or indemnification continues, give the Agent notice of cancellation of the Commitment(s) of that Lender and its intention to procure the repayment of that Lender's participation in the Loan.

7.4.2 On receipt of a notice referred to in Clause 7.4.1 in relation to a Lender, the Commitment(s) of that Lender shall immediately be reduced to zero.

7.4.3 On the last day of the Interest Period which ends after the Borrower has given notice under Clause 7.4.1 in relation to a Lender (or, if earlier, the date specified by the Borrower in that notice), the Borrower shall repay that Lender's participation in the Loan together with all interest and other amounts accrued under the Finance Documents.

^7.5  Mandatory prepayment on sale or Total Loss If the Vessel is sold by the Borrower or becomes a Total Loss, the Borrower shall, simultaneously with any such sale or on the earlier of the date falling six months after the Drawdown Date and the date on which the proceeds of any such Total Loss are realised, prepay the whole of the Indebtedness.

7.6 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.

Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty.

In the event of a prepayment under this Agreement the Borrower shall, if applicable, terminate such Transactions as to ensure compliance with the provisions of Clause 22.26 (Permitted Transactions).

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

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

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

Section 5 Costs of Utilisation

8 Interest

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

8.1.3 Margin;

8.1.4 LIBOR; and

8.1.5 Mandatory Cost, if any

8.2 Payment of interest Interest shall accrue day to day, shall be calculated on the basis of a 360 day year, and 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 months, on the dates falling at three monthly intervals after the first day of the Interest Period).

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

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

8.4 Notification of rates of interest The Agent shall promptly notify the Borrower of the determination of a rate of interest under this Agreement.

9 Interest Periods

9.1 Selection of Interest Periods The Borrower may select in a written notice to the Agent the duration of an Interest Period for the Loan subject as follows:

9.1.1 each notice is irrevocable and must be delivered to the Agent by the Borrower not later than 11.00 a.m. (Amsterdam time) on the Quotation Day;

9.1.2 if the Borrower fails to give a notice in accordance with Clause 9.1.1, the relevant Interest Period will, subject to Clause 9.2 (Non-Business Days), be three months;

9.1.3 subject to this Clause 9, the Borrower may select an Interest Period of one or three months;

9.1.4 an Interest Period shall not extend beyond the Termination Date; and

9.1.5 each Interest Period shall start on the Drawdown Date or (if the Loan is already made) on the last day of its preceding Interest Period and end on the date which numerically corresponds to the Drawdown Date or the last day of the preceding Interest Period in the relevant calendar month except that, if there is no numerically corresponding date in that calendar month, the Interest Period shall end on the last Business Day in that month.

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

10 Changes to the Calculation of Interest

10.1 Absence of quotations 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 am on the Quotation Day, the applicable LIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.

10.2 Market disruption If a Market Disruption Event occurs for any Interest Period, then the rate of interest on each Lender's share of the Loan for that Interest Period shall be the percentage rate per annum which is the sum of:

10.2.1 the Margin;

10.2.2 the rate notified to the Agent by that Lender as soon as practicable, and in any event by close of business on the date falling three Business Days after the Quotation Day (or, if earlier, on the date falling three Business Days prior to the date on which interest is due to be paid in respect of that Interest Period), to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in the Loan from whatever source it may reasonably select; and

10.2.3 the Mandatory Cost, if any, applicable to that Lender's participation in the Loan.

In this Agreement "Market Disruption Event" means:

(a) at or about noon on the Quotation Day for the relevant Interest Period LIBOR is to be determined by reference to the Reference Banks and none or only one of the Reference Banks supplies a rate to the Agent to determine LIBOR for dollars and the relevant Interest Period; or

(b) before close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders (whose participations in the Loan exceed 66²/₃% of the Loan) that the cost to it of funding its participation in the Loan from whatever source it may reasonably select would be in excess of LIBOR.

10.3 Alternative basis of interest or funding

10.3.1 If a Market Disruption Event occurs and the Agent or the Borrower so requires, the Agent and the Borrower shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest.

10.3.2 Any alternative basis agreed pursuant to Clause 10.3.1 shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties.

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

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

11 Fees

11.1 Commitment Fee The Borrower shall pay to the Agent (for the account of the Lenders in proportion to their Commitments) a feecomputed at the rate of 40 per cent of the applicable Margin per annum of the undrawn portion of the Total Commitments during the period commencing on the date of this Agreement to and including the earlier to occur of (i) the Drawdown Date and (ii) the end of the Availability Period.

The accrued commitment fee is payable on the earlier of (i) the Drawdown Date and (ii) the end of the Availability Period.

11.2 Upfront fee The Borrower shall pay to the Arranger an upfront fee in the amount and at the times agreed in a Fee Letter.

Section 6 Additional Payment Obligations

12 Tax Gross Up and Indemnities

12.1 Definitions In this Agreement:

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

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

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

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

Unless a contrary indication appears, in this Clause 12 a reference to "determines" or "determined" means a determination made in the absolute discretion of the person making the determination.

12.2 Tax gross-up The Borrower shall (and shall procure that each other Security Party shall) make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law, subject as follows:

12.2.1 the Borrower shall promptly upon becoming aware that it or any other Security Party must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Borrower and any such other Security Party;

12.2.2 if a Tax Deduction is required by law to be made by the Borrower or any other Security Party, the amount of the payment due from the Borrower or that other Security Party shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required;

12.2.3 if the Borrower or any other Security Party is required to make a Tax Deduction, the Borrower shall (and shall procure that such other Security Party shall) make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law; and

12.2.4 within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Borrower shall (and shall procure that such other Security Party shall) deliver to the Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

12.3 Tax indemnity

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

12.3.2 Clause 12.3.1 shall not apply:

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

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

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

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

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

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

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

12.3.3 A Protected Party making, or intending to make a claim under Clause 12.3.1 shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Borrower.

12.3.4 A Protected Party shall, on receiving a payment from the Borrower under this Clause 12.3, notify the Agent.

12.4 Tax Credit If the Borrower or any other Security Party makes a Tax Payment and the relevant Finance Party determines that:

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

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

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

12.5 Stamp taxes 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.

12.6 VAT

12.6.1 All amounts expressed to be payable under a Finance Document by any Party or any Security Party to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, subject to Clause 12.6.2, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party or any Security Party under a Finance Document and such Finance Party is required to account to the relevant tax authority for the VAT, that Party or Security Party must pay to such Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and such Finance Party must promptly provide an appropriate VAT invoice to the Borrower).

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

(a) (where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this Clause 12.6.2(a) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and

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

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

12.6.4 Any reference in this Clause 12.6 to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term "representative member" to have the same meaning as in the Value Added Tax Act 1994).

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

12.7 FATCA information

12.7.1 Subject to Clause 12.7.3, each Party shall, within ten Business Days of a reasonable request by another Party:

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

(i) a FATCA Exempt Party; or

(ii) not a FATCA Exempt Party;

(d) 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

(e) 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.

12.7.2 If a Party confirms to another Party pursuant to Clause 12.7.1(a)(i) that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.

12.7.3 Clause 12.7.1 shall not oblige any Finance Party to do anything, and Clause 12.7.1(c) shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of:

(a) any law or regulation;

(b) any fiduciary duty; or

(c) any duty of confidentiality.

12.7.4 If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with Clause 12.7.1(a) or 12.7.1(b) (including, for the avoidance of doubt, where Clause 12.7.3 applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.

12.8 FATCA Deduction

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

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

13 Increased Costs

13.1 Increased costs Subject to Clause 13.3 (Exceptions) the Borrower shall, within three Business Days of a demand by the Agent, pay to the Agent for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any law or regulation or any request from or requirement of any central bank or other fiscal, monetary or other authority made after the date of this Agreement (including Basel III and any other which relates to capital adequacy or liquidity controls or which affects the manner in which that Finance Party allocates capital resources to obligations under this Agreement and/or the Master Agreement) or (iii) the implementation or application of or compliance with Basel III, CRR or CRD IV or any other law or regulation which implements Basel III, CRR or CRD IV (whether such implementation, application or compliance is by a government, regulator, a Lender or any Affiliate of a Lender) or (iv) any change in the risk weight allocated by that Finance Party to the Borrower after the date of this Agreement.

In this Agreement:

(a)     "Increased Costs" means:

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

(iv) an additional or increased cost; or

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

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

(b) "Basel III" means (a) the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated, (b) the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement – Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated and (c) any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III";

13.1.5 "CRR" means Regulation EU No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU No 648/2012), as amended, supplemented or restated; and

13.1.6 "CRD IV" means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC, as amended, supplemented or restated.

13.2 Increased cost claims

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

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

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

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

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

13.3.5 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);

13.3.6 compensated for by the payment of the Mandatory Cost;

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

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

In this Clause 13.3, a reference to a "Tax Deduction" has the same meaning given to the term in Clause 12.1 (Definitions).

14 Other Indemnities

14.1 Currency indemnity If any sum due from the Borrower or the Guarantor 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:

14.1.7 making or filing a claim or proof against the Borrower or the Guarantor (as the case may be), or

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

the Borrower or the Guarantor (as the case may be)shall as an independent obligation, within three 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 Finance Party at the time of its receipt of that Sum.

The Borrower and the Guarantor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.

14.2 Other indemnities

14.2.9 The Borrower shall, within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability incurred by that Finance Party as a result of:

(a) the occurrence of any Event of Default;

(b) a failure by the Borrower to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 28 (Sharing among the Finance Parties);

(c) funding, or making arrangements to fund, the Loan following delivery by the Borrower of a Drawdown Request but the 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 a Finance Party alone); or

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

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

14.2.11 Subject to any limitations set out in Clause 14.2.2, the indemnity in that Clause shall cover any cost, loss or liability incurred by each Indemnified Person in any jurisdiction:

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

(b) in connection with any Environmental Claim.

14.3 Indemnity to the Agent The Borrower shall promptly indemnify the Agent against:

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

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

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

(e) instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under this Agreement; and

14.3.2 any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Agent (otherwise than by reason of the Agent's gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 29.12 (Disruption to Payment Systems etc.) notwithstanding the Agent's negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) in acting as Agent under the Finance Documents.

14.4 Indemnity to the Security Agent The Borrower and the Guarantor shall promptly indemnify the Security Agent and every Receiver and Delegate against any cost, loss or liability incurred by any of them as a result of:

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

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

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

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

14.4.10 any default by any Security Party in the performance of any of the obligations expressed to be assumed by it in the Finance Documents; or

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

14.5 Indemnity survival The indemnities contained in this Agreement shall survive repayment of the Loan.

15 Mitigation by the Lenders

15.1 Mitigation Each Finance Party shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to any of Clause 7.1 (Illegality), Clause 12 (Tax Gross Up and Indemnities) or Clause 13 (Increased Costs) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office. The above does not in any way limit the obligations of any Security Party under the Finance Documents.

15.2 Limitation of liability The Borrower shall promptly indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 15.1 (Mitigation). A Finance Party is not obliged to take any steps under Clause 15.1 if, in its opinion (acting reasonably), to do so might be prejudicial to it.

16 Costs and Expenses

16.1 Transaction expenses The Borrower shall promptly on demand pay the Agent, the Security Agent and the Arranger the amount of all costs and expenses (including legal fees) reasonably incurred by any of them (and, in the case of the Security Agent, by any Receiver or Delegate) in connection with:

16.1.3 the negotiation, preparation, printing, execution, syndication and perfection of this Agreement and any other documents referred to in this Agreement;

16.1.4 the negotiation, preparation, printing, execution and perfection of any other Finance Documents executed after the date of this Agreement;

16.1.5 any other document which may at any time be required by a Finance Party to give effect to any Finance Document or which a Finance Party is entitled to call for or obtain under any Finance Document (including, without limitation, any valuation of the Vessel); and

16.1.6 any discharge, release or reassignment of any of the Security Documents.

16.2 Amendment costs If (a) a Security Party requests an amendment, waiver or consent or (b) an amendment is required under Clause 29.11 (Change of currency), the Borrower shall, within three Business Days of demand, reimburse each of the Agent and the Security Agent for the amount of all duly documented costs and expenses (including legal fees) reasonably incurred by the Agent and the Security Agent (and, in the case of the Security Agent, by any Receiver or Delegate) in responding to, evaluating, negotiating or complying with that request or requirement.

16.3 Enforcement and preservation costs The Borrower shall, within three Business Days of demand, pay to each Finance Party and each other Secured Party the amount of all costs and expenses (including legal fees) incurred by that Finance Party in connection with the enforcement of, or the preservation of any rights under, any Finance Document and any proceedings instituted by or against the Security Agent as a consequence of taking or holding the Security Documents or enforcing those rights including (without limitation) any losses, costs and expenses which that Finance Party or other Secured Party may from time to time sustain, incur or become liable for by reason of that Finance Party or other Secured Party being mortgagee of the Vessel and/or a lender to the Borrower, or by reason of that Finance Party or other Secured Party being deemed by any court or authority to be an operator or controller, or in any way concerned in the operation or control, of the Vessel.

16.4 Other costs The Borrower shall, within three Business Days of demand, pay to each Finance Party and each other Secured Party the amount of all sums which that Finance Party or other Secured Party may pay or become actually or contingently liable for on account of the Borrower in connection with the Vessel (whether alone or jointly or jointly and severally with any other person) including (without limitation) all sums which that Finance Party or other Secured Party may pay or guarantees which it may give in respect of the Insurances, any expenses incurred by that Finance Party or other Secured Party in connection with the maintenance or repair of the Vessel or in discharging any lien, bond or other claim relating in any way to the Vessel, and any sums which that Finance Party or other Secured Party may pay or guarantees which it may give to procure the release of the Vessel from arrest or detention.

Section 7 Security and Application of Moneys

17 Security Documents and Application of Moneys

17.1 Security Documents As security for the payment of the Indebtedness, the Borrower shall execute and deliver to the Security Agent or cause to be executed and delivered to the Security Agent the following documents in such forms and containing such terms and conditions as the Security Agent shall require:

17.1.12 a first preferred mortgage over the Vessel;

17.1.13 a first priority deed or deeds of assignment of the Insurances, Earnings, any Charterand Requisition Compensation of the Vessel; and the first priority assignment of Insurances from the Managers contained in the Managers' Undertakings;

17.1.14 the guarantee and indemnity from the Guarantor;

17.1.15 a first priority account security deed in respect of all amounts from time to time standing to the credit of the Account;

17.1.16 a first priority charge of all the issued shares of the Borrower;

17.1.17 a first priority deed of assignment over the Master Agreement Proceeds;

17.1.18 a first priority deed of assignment of any Intercompany Loan Agreement; and

17.1.19 a subordination agreement by which the rights of any lender under any Intercompany Loan are fully subordinated to the rights of the Finance Parties under the Finance Documents.

17.2 Account The Borrower shall maintain the Account with the Account Bank for the duration of the Facility Period free of Encumbrances and rights of set off other than those created by or under the Finance Documents and rights of set-off in favour of the Account Bank as account holder.

17.3 Earnings The Borrower shall procure that all Earnings, proceeds from any Insurances, any liquidated damages, any Requisition Compensation and the advanced Loan are credited to the Account.

17.4 Application of Account The Borrower shall procure that there is transferred from the Account to the Agent for the account of the Lenders:

17.4.1 on the Termination Date, the amount of the Repayment Instalment then due; and

17.4.2 on each Interest Payment Date, the amount of interest then due

and the Borrower irrevocably authorises the Security Agent to instruct the Account Bank to make those transfers.

17.5 Borrower's obligations not affected If for any reason the amount standing to the credit of the Account is insufficient to pay the Repayment Instalment or to make any payment of interest when due, the Borrower's obligation to pay the Repayment Instalment or to make that payment of interest shall not be affected.

17.6 Application of Earnings During the Facility Period the Earnings are to be applied as follows:

17.6.1 firstly, towards payment of Operating Expenses;

17.6.2 secondly, towards payment of all other sums other than principal and interest owing to the Finance Parties under the Finance Documents;

17.6.3 thirdly, towards payment of debt service under this Agreement; and

17.6.4 fourthly, towards payment of debt service under the Master Agreement.

During the Facility Period no sum may be withdrawn from the Account (except in accordance with this Clause 17.6) without the prior written consent of the Agent.

17.7 Relocation of Account On and at any time an Event of Default is continuing, the Security Agent may without the consent of the Borrower instruct the Account Bank to relocate the Account to any other branch of the Account Bank, without prejudice to the continued application of this Clause 17 and the rights of the Finance Parties under the Finance Documents.

17.8 Access to information The Borrower agrees that the Security Agent (and its nominees) may from time to time during the Facility Period review the records held by the Account Bank (whether in written or electronic form) in relation to the Account, and irrevocably waives any right of confidentiality which may exist in relation to those records.

^17.9  Statements Without prejudice to the rights of the Security Agent under Clause 17.8 (Access to information), the Borrower shall procure that the Account Bank provides to the Security Agent, no less frequently than each calendar month during the Facility Period, written statements of account showing all entries made to the credit and debit of the Account during the immediately preceding calendar month.

17.10 Application after acceleration From and after the giving of notice to the Borrower by the Agent under Clause 23.2 (Acceleration), the Borrower shall procure that all sums from time to time standing to the credit of the Account are immediately transferred to the Security Agent or any Receiver or Delegate for application in accordance with Clause 17.11 (Application of moneys by Security Agent) and the Borrower irrevocably authorises the Security Agent to instruct the Account Bank to make those transfers.

17.11 Application of moneys by Security Agent The Borrower and the Finance Parties irrevocably authorise the Security Agent or any Receiver or Delegate to apply all moneys which it receives and is entitled to receive:

17.11.1 pursuant to a sale or other disposition of the Vessel or any right, title or interest in the Vessel; or

17.11.2 by way of payment of any sum in respect of the Master Agreement Proceeds, any Intercompany Loan Agreement, the Insurances, Earnings, any Charter or any Requisition Compensation; or

17.11.3 by way of transfer of any sum from the Account; or

17.11.4 otherwise under or in connection with any Security Document,

in or towards satisfaction of the Indebtedness in the following order:

17.11.5 first, any unpaid fees, costs, expenses and default interest due to the Agent and the Security Agent (and, in the case of the Security Agent, to any Receiver or Delegate) under all or any of the Finance Documents, such application to be apportioned between the Agent and the Security Agent pro rata to the aggregate amount of such items due to each of them;

17.11.6 second, any unpaid fees, costs, expenses (including any sums paid by the Lenders under Clause 26.11 (Indemnity)) of the Lenders due under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such items due to each of them;

17.11.7 third, any accrued but unpaid default interest due to the Lenders under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such default interest due to each of them;

17.11.8 fourth, any other accrued but unpaid interest due to the Lenders under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such interest due to each of them;

17.11.9 fifth, any principal of the Loan due and payable but unpaid under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such principal due to each of them; and

17.11.10 sixth, any other sum due and payable to any Finance Party but unpaid under all or any of the Finance Documents, such application to be apportioned between the Finance Parties pro rata to the aggregate amount of any such sum due to each of them,

Provided that any part of the Indebtedness arising out of the Master Agreement shall be satisfied only after every other part of the Indebtedness for the time being due and payable has been satisfied in full.

17.12 Retention on account Moneys to be applied by the Security Agent or any Receiver or Delegate under Clause 17.11 (Application of moneys by Security Agent) shall be applied as soon as practicable after the relevant moneys are received by it, or otherwise become available to it, save that (without prejudice to any other provisions contained in any of the Security Documents) the Security Agent or any Receiver or Delegate may retain any such moneys by crediting them to a suspense account for so long and in such manner as the Security Agent or such Receiver or Delegate may from time to time determine with a view to preserving the rights of the Finance Parties or any of them to prove for the whole of the Indebtedness (or any relevant part) against the Borrower or any other person liable.

17.13 Additional security If at any time the aggregate of the FMV of the Vessel and the value of any additional security (such value to be the face amount of the deposit (in the case of cash), determined conclusively by appropriate advisers appointed by the Agent (in the case of other charged assets), and determined by the Agent in its discretion (in all other cases)) for the time being provided to the Security Agent under this Clause 17.13 is less than 130% of the amount of theLoan then outstanding (the "VTL Coverage"), the Borrower shall, within 30 days of the Agent's request, at the Borrower's option:

17.13.1 pay to the Security Agent or to its nominee a cash deposit in the amount of the shortfall to be secured in favour of the Security Agent as additional security for the payment of the Indebtedness; or

17.13.2 give to the Security Agent other additional security in amount and form acceptable to the Security Agent in its discretion; or

17.13.3 prepay the Loan in the amount of the shortfall.

Clauses 6.2 (Reborrowing) and 7.6 (Restrictions) shall apply, mutatis mutandis, to any prepayment made under this Clause 17.13 and the value of any additional security provided shall be determined by the Agent in its discretion.

The Agent may obtain valuations to determine the FMV of the Vessel for the purpose of testing compliance of this Clause 17.13 at any time. The Agent shall bear the cost of valuations obtained by the Agent to determine the FMV of the Vessel for the purpose of testing compliance of this Clause 17.13 provided that if an Event of Default is continuing the Borrower shall bear the cost of valuations obtained by the Agent to determine the FMV of the Vessel for the purpose of testing compliance of this Clause 17.13.

17.14 Contingent Amount The Borrower and the Swap Provider have agreed to enter into Master Agreements for the hedging of the Borrower's exposure to interest rate fluctuations.   The Borrower and the Swap Provider have agreed that the Mortgage shall secure any obligations payable by the Borrower to the Swap Provider at any time pursuant to any Master Agreement in a maximum aggregate amount of up to $10,400,000.  The Borrower and the Swap Provider have further agreed that each of the other Security Documents shall not have any limitation as to the amount payable by the Borrower to the Swap Provider at any time pursuant to any Master Agreement which is secured by such other Security Documents.

18 Guarantee and Indemnity

18.1 Guarantee and indemnity The Guarantor irrevocably and unconditionally jointly and severally:

18.1.5 guarantees to each Finance Party punctual performance by each other Security Party of all that Security Party's obligations under the Finance Documents;

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

18.1.7 agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of a Security Party not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due. The amount payable by the Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 18 if the amount claimed had been recoverable on the basis of a guarantee.

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

18.3 Reinstatement If any discharge, release or arrangement (whether in respect of the obligations of any Security Party 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 will continue or be reinstated as if the discharge, release or arrangement had not occurred.

18.4 Waiver of defences The obligations of the Guarantor under this Clause 18 will not be affected by an act, omission, matter or thing which, but for this Clause 18.4, would reduce, release or prejudice any of its obligations under this Clause 18 (without limitation and whether or not known to it or any Finance Party) including:

18.4.1 any time, waiver or consent granted to, or composition with, any Security Party or other person;

18.4.2 the release of any other Security Party or any other person under the terms of any composition or arrangement with any creditor of any Security Party;

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

18.4.4 any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of a Security Party or any other person;

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

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

18.4.7 any insolvency or similar proceedings.

18.5 Guarantor intent Without prejudice to the generality of Clause 18.4 (Waiver of defences), the Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.

18.6 Immediate recourse 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. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

18.7 Appropriations Until all amounts which may be or become payable by the Security Parties 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:

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

18.7.2 hold in an interest-bearing suspense account any moneys received from the Guarantor or on account of the Guarantor's liability under this Clause 18.

18.8 Deferral of Guarantor's rights Until all amounts which may be or become payable by the Security Parties 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:

18.8.1 to be indemnified by a Security Party;

18.8.2 to claim any contribution from any other guarantor of any Security Party's obligations under the Finance Documents;

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

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

18.8.5 to exercise any right of set-off against any Security Party; and/or

18.8.6 to claim or prove as a creditor of any Security Party in competition with any Finance Party.

If the Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Security Parties 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 29 (Payment mechanics).

^18.9  Additional security 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.

18.10 Subordination The Guarantor agrees and undertakes with the Finance Parties that all claims of whatsoever nature which it has or may have at any time against the Borrower or any other Security Party or any of their respective property or assets shall rank after and be in all respects subordinate to any and all claims, whether actual or contingent, which the Finance Parties have or may have at any time against the Borrower or such other Security Party or any of its property or assets and that it will not without the prior written consent of the Agent (acting on the instructions of the Majority Lenders):

18.10.11 demand or accept payment in whole or in part of any moneys owing to it by the Borrower or any other Security Party;

18.10.12 take any steps to enforce its rights to recover any moneys owing to it by the Borrower or any other Security Party and more particularly (but without limitation) take or issue any judicial or other legal proceedings against the Borrower or other Security Party or any of their respective property or assets; or

18.10.13 prove in the liquidation or other dissolution of the Borrower or other Security Party in competition with a Finance Party.

Section 8 Representations, Undertakings and Events of Default

19 Representations

19.1 Representations The Borrower and the Guarantormake the representations and warranties set out in this Clause 19 to each Finance Party.

19.1.3 Status Each of the Security Parties:

(a) is a corporation duly incorporated and validly existing under the law of its jurisdiction of incorporation; and

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

19.1.4 Binding obligations Subject to the Legal Reservations:

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

(b) (without limiting the generality of Clause 19.1.2(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.

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

(e) any law or regulation applicable to such Security Party;

(f) the constitutional documents of such Security Party; or

(g) any agreement or instrument binding upon such Security Party or any of such Security Party's assets or constitute a default or termination event (however described) under any such agreement or instrument.

19.1.6 Power and authority

(a) Each of the Security Parties 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.

(b) No limit on the powers of any Security Party 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.

19.1.7 Validity and admissibility in evidence All Authorisations required or desirable:

(c) to enable each of the Security Parties 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 each Finance Party to enforce and exercise all its rights under the Relevant Documents; and

(d) to make the Relevant Documents to which any Security Party is a party admissible in evidence in its Relevant Jurisdictions,

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

19.1.8 Governing law and enforcement

(a) The choice of governing law of any Finance Document will be recognised and enforced in the Relevant Jurisdictions of each relevant Security Party.

(b) 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 Security Party.

19.1.9 Insolvency No corporate action, legal proceeding or other procedure or step described in Clause 23.1.7 (Insolvency proceedings) or creditors' process described in Clause 23.1.8 (Creditors' process) has been taken or threatened in relation to a Security Party; and none of the circumstances described in Clause 23.1.6 (Insolvency) applies to a Security Party.

19.1.10 No filing or stamp taxes Under the laws of the Relevant Jurisdictions of each relevant Security Party 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 registration of the Mortgage at the Ships Registry where title to the Vessel is registered in the ownership of the Borrower and payment of associated fees, which registration, filing, taxes and fees will be made and paid promptly after the date of the relevant Finance Document.

19.1.11 Deduction of Tax None of the Security Parties 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.

19.1.12 No default

(a) No Event of Default and, on the date of this Agreement and the Drawdown Date, no Default has occurred and is continuing or is reasonably likely to result from the advance of the Loan or the entry into, the performance of, or any transaction contemplated by, any of the Relevant Documents.

(b) 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 Security Parties or to which its assets are subject which has or is reasonably likely to have a Material Adverse Effect.

19.1.13 No misleading information Save as disclosed in writing to the Agent and the Arranger prior to the date of this Agreement:

(a) all material information provided to a Finance Party by or on behalf of any of the Security Parties 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 any Finance Party 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

(b) all other written information provided by any of the Security Parties (including its advisers) to a Finance Party was true, complete and accurate in all material respects as at the date it was provided and is not misleading in any respect.

19.1.14 Financial statements

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

(b) The audited Original Financial Statements give a true and fair view of the Guarantor's financial condition and results of operations during the relevant financial year.

(c) There has been no material adverse change in the Guarantor's assets, business or financial condition since the date of the Original Financial Statements.

(d) The Guarantor's most recent financial statements delivered pursuant to Clause 20.1 (Financial statements):

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

(ii) 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.

(e) Since the date of the most recent financial statements delivered pursuant to Clause 20.1(Financial statements) there has been no material adverse change in the business, assets or financial condition of the Guarantor.

19.1.15 No proceedings pending or threatened No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which are reasonably likely to have a Material Adverse Effect have been started or threatened against any of the Security Parties.

19.1.16 No breach of laws None of the Security Parties has breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.

19.1.17 Environmental laws

(a) Each of the Security Parties is in compliance with Clause 22.3 (Environmental compliance) and 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.

(b) No Environmental Claim has been commenced or is threatened against any of the Security Parties where that claim has or is reasonably likely, if determined against that Security Party, to have a Material Adverse Effect.

19.1.18 Taxation

(a) None of the Security Parties is materially overdue in the filing of any Tax returns or is overdue in the payment of any amount in respect of Tax.

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

(c) Each of the Security Parties is resident for Tax purposes only in its Original Jurisdiction.

19.1.19 Anti-corruption law Each of the Security Parties and each Affiliate of any of them has conducted its businesses in compliance with applicable anti-corruption laws and has instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.

19.1.20 No Encumbrance or Financial Indebtedness

(a) No Encumbrance exists over all or any of the present or future assets of the Borrower.

(b) The Borrower does not have any Financial Indebtedness outstanding other than as permitted by this Agreement.

19.1.21 Pari passu ranking The payment obligations of each of the Security Parties 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.

19.1.22 No adverse consequences

(a) It is not necessary under the laws of the Relevant Jurisdictions of any of the Security Parties:

(i) in order to enable any Finance Party to enforce its rights under any Finance Document; or

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

that any Finance Party should be licensed, qualified or otherwise entitled to carry on business in any of the Relevant Jurisdictions of any of the Security Parties.

(b) No Finance Party is or will be deemed to be resident, domiciled or carrying on business in any of the Relevant Jurisdictions of any of the Security Parties by reason only of the execution, performance and/or enforcement of any Finance Document.

19.1.23 Disclosure of material facts Neither the Borrower nor the Guarantor is aware of any material facts or circumstances which have not been disclosed to the Agent 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 Borrower.

19.1.24 Completeness of Relevant Documents The copies of any Relevant Documents provided or to be provided by the Borrower to the Agent 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 Agent.

^19.1.25  No Immunity No Security Party or any of its assets is immune to any legal action or proceeding

19.1.26 Money laundering Any borrowing by the 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.

19.1.27 Sanctions As regards Sanctions:

(a) none of the Security Parties or any Affiliate of any of them is a Prohibited Person or is owned or controlled by, or acting directly or indirectly on behalf of or for the benefit of, a Prohibited Person and none of such persons owns or controls a Prohibited Person;

(b) no proceeds of the Loan shall be made available, directly or indirectly, to or for the benefit of a Prohibited Person or otherwise shall be, directly or indirectly, applied in a manner or for a purpose prohibited by Sanctions; and

(c) each of the Security Parties and each Affiliate of any of them is in compliance with all Sanctions.

19.1.28 Patriot Act To the extent applicable the Borrower and the Guarantor are in compliance with (i) the Trading with the Enemy Act, and each of the foreign assets control regulations of the United States Treasury Department (31 C.F.R, Subtitle B, Chapter V) and any other enabling legislation or executive order relating thereto and (ii) the Patriot Act.  No part of the proceeds of the Loan will be used, directly or indirectly, for any payments to any government official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

19.2 Repetition Each Repeating Representation is deemed to be repeated by the Borrower and the Guarantorby reference to the facts and circumstances then existing on the date of the Drawdown Request, on the Drawdown Date, on the first day of each Interest Period.

20 Information Undertakings

The undertakings in this Clause 20 remain in force for the duration of the Facility Period.

20.1 Financial statements The Guarantor shall supply to the Agent in sufficient copies for all of the Lenders as soon as the same become available, but in any event on or prior to 30 April 2015, its audited consolidated financial statements for the financial year ending 31 December 2014.

20.2 Compliance Certificate

20.2.8 The Borrower shall supply to the Agent, with its annual financial statements delivered pursuant to Clause 20.1 (Financial statements) a Compliance Certificate setting out (in reasonable detail) computations as to compliance with Clause 21 (Financial Covenants) as at the date as at which those financial statements were drawn up.

20.2.9 The Borrower shall supply to the Agent on 30 June 2015 a Compliance Certificate stating only that no Event of Default is continuing.

20.2.10 The Borrower shall supply to the Agent, with its annual financial statements delivered pursuant to Clause 20.1 (Financial statements), valuations issued no more than 30 days prior to such date by two Approved Shipbrokers evidencing the FMV of the Vessel which the Agent shall use in order to determine compliance with Clause 17.13 (Additional Security), such valuations being at the cost of the Borrower.

^20.2.11  Each Compliance Certificate shall be signed by the chief financial officer of the Guarantor and, in the case of each Compliance Certificate issued together with its annual financial statements, by the Borrower's auditors.

20.3 Requirements as to financial statements

The financial statements delivered by the Guarantor under Clause 20.1 (Financial statements):

20.3.5 shall be certified by a director of the Guarantor as giving a true and fair view of its financial condition as at the date as at which those financial statements were drawn up; and

20.3.6 shall be prepared using US 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 Agent that there has been a change in US GAAP, the accounting practices or reference periods and its auditors deliver to the Agent:

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

(b) sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Agent to determine whether Clause 21 (Financial Covenants) has been complied with and make an accurate comparison between the financial position indicated in those financial statements and the Original Financial Statements.

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

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

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

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

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

20.4.4 promptly on request, such further information regarding the financial condition, assets and operations of any Security Party (including any requested amplification or explanation of any item in the financial statements, budgets or other material provided by any Security Party under this Agreement, any changes to management of the Borrower or the Guarantor and an up to date copy of its shareholders' register (or equivalent in its Original Jurisdiction)) as any Finance Party through the Agent may reasonably request; and

20.4.5 promptly on request, such further information as any Finance Party through the Agent may reasonably request.

20.5 Notification of default

20.5.3 The Borrower and the Guarantorshall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence.

20.5.4 Promptly upon a request by the Agent, the Borrower shall supply to the Agent a certificate signed by two of its directors or senior officers on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).

20.6 "Know your customer" checks

20.6.7 If:

(c) 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;

(d) any change in the status of a Security Party after the date of this Agreement; or

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

obliges the Agent or any Lender (or, in the case of Clause 20.6.1(c), 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, the Borrower shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in Clause 20.6.1(c), on behalf of any prospective new Lender) in order for the Agent, such Lender or, in the case of the event described in Clause 20.6.1(c), any prospective new Lender to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents including without limitation obtaining, verifying and recording certain information and documentation that will allow the Agent and any Lender to identify each Security Party in accordance with the requirements to the Patriot Act.

20.6.8 Each Lender shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself) in order for the Agent to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

21 Financial Covenants

The following financial covenants shall apply to the Guarantor on a consolidated basis throughout the Facility Period, to be tested by reference to its annual financial statements delivered pursuant to Clause 20.1 (Financial statements):

21.1 Minimum Liquidity Cash and Cash Equivalents shall at all times be the greater of (i) $50,000,000 or (ii) $850,000 per vessel owned by the Group (the “Minimum Liquidity”). For the purpose of this test, Cash and Cash Equivalents can include unutilised and freely available parts of revolving credit facilities with a maturity date in excess of 12 months after the date of the annual financial statements delivered pursuant to Clause 20.1 (Financial statements) provided that 66²/₃% of the Minimum Liquidity shall at all times consist of Cash.

21.2 Minimum Tangible Net Worth The Guarantor shall maintain a Consolidated Tangible Net Worth of not less than $500,000,000 plus (a) 25% of the Guarantor's cumulative, positive consolidated net income for each fiscal quarter commencing on or after 31 December 2013 and (b) 50% of the value of the equity proceeds realized from any issuance of equity interests in the Guarantor occurring on or after 31 December 2013.

21.3 Maximum Leverage A ratio of Net Debt to Consolidated Total Capitalization of not more than 0.60 to 1.00.

Following the date of this Agreement, should US GAAP requirements materially change so as to impact the covenants detailed in this Clause 21, the Guarantor and the Agent shall discuss the required amendments to the covenants detailed in this Clause 21so as to reflect such changes to US GAAP.

The following definitions shall apply to this Clause 21:

“Cash” means any credit balance on any deposit, savings, current or other account, and any cash in hand held with banks or other financial institutions of the Group which is:

(c)freely withdrawable on demand;

21.3.6 not subject to any Encumbrance (other than pursuant to any Security Document);

21.3.7 denominated and payable in a freely transferable and freely convertible currency; and

21.3.8 capable of being remitted to the Group.

“Cash Equivalents” means:

(a) unencumbered securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof);

(b) time deposits, certificates of deposit or deposits (in each case, unencumbered) in the interbank market of any commercial bank of recognized standing organized under the laws of the United States of America, any state thereof or any foreign jurisdiction having capital and surplus in excess of $500,000,000; and

(c) such other securities or instruments as the Majority Lenders shall agree in writing,

and in respect of both (a) and (b) above, with a rating category of at least “A-” by Standard & Poor's Rating Services and “A” by Moody's Investors Service Limited (or the equivalent used by another rating agency) (provided that, in the case of (b) above only, such rating category shall not be applicable for time deposits, certificates of deposit or deposits (in each case, unencumbered) in the interbank market of any commercial bank which is a Lender), and in each case having maturities of not more than ninety (90) days from the date of acquisition.

“Consolidated Funded Debt” means, for any accounting period, the sum of the following for the Guarantor determined (without duplication) on a consolidated basis for such period and in accordance with US GAAP consistently applied:

(a) all Financial Indebtedness; and

(a) all obligations to pay a specific purchase price for goods or services whether or not delivered or accepted (including take-or-pay and similar obligations which in accordance with US GAAP would be shown on the liability side of a balance sheet),

provided that balance sheet accruals for future dry docking expenses shall not be classified as Consolidated Funded Debt.

“Consolidated Tangible Net Worth” means, on a consolidated basis, the total shareholders’ equity (including retained earnings) of the Guarantor, minus goodwill.

“Consolidated Total Capitalization” means Consolidated Tangible Net Worth plus Consolidated Funded Debt.

“Net Debt” means Financial Indebtedness less Cash and Cash Equivalents.

22 General Undertakings

The undertakings in this Clause 22 remain in force for the duration of the Facility Period.

22.1 Authorisations The Borrower and the Guarantor shall promptly:

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

22.1.8 supply certified copies to the Agent of,

any Authorisation required under any law or regulation of a Relevant Jurisdiction to:

(a) enable any Security Party to perform its obligations under the Finance Documents to which it is a party;

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

(c) enable any Security Party to carry on its business where failure to do so has or is reasonably likely to have a Material Adverse Effect.

22.2 Compliance with laws

The Borrower and the Guarantor shall comply (and shall procure that each other Security Party 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 anti-corruption laws, to which Clause 22.5 applies) failure so to comply has or is reasonably likely to have a Material Adverse Effect.

22.3 Environmental compliance

The Borrower and the Guarantor shall:

22.3.5 comply with all Environmental Laws;

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

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

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

22.4 Environmental Claims

The Borrower and the Guarantor shall promptly upon becoming aware of the same, inform the Agent in writing of:

22.4.9 any Environmental Claim against any of the Security Parties which is current, pending or threatened; and

22.4.10 any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any of the Security Parties,

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

22.5 Anti-corruption law

22.5.1 The Borrower and the Guarantor shall not (and shall procure that no other Security Party will) directly or indirectly use the proceeds of the Loan for any purpose which would breach the Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other similar legislation in other jurisdictions.

22.5.2 The Borrower and the Guarantor shall (and shall procure that each other Security Party and each Affiliate of any of them shall):

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

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

22.6 Taxation

22.6.14 The Borrower and the Guarantor shall (and shall procure that each other Security Party 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:

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

(b) 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 Agent under Clause 20.1 (Financial statements); and

(c) 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.

22.6.15 Neither the Borrower nor the Guarantor may (and no other Security Party may) change its residence for Tax purposes.

22.7 Evidence of good standing The Borrower will from time to time if requested by the Agent provide the Agent with evidence in form and substance satisfactory to the Agent that the Security Parties and all corporate shareholders of any of the Security Parties remain in good standing.

22.8 Pari passu ranking The Borrower and the Guarantor shall ensure that at all times any unsecured and unsubordinated claims of a Finance Party against it under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.

22.9 Negative pledge

In this Clause 22.9 "Quasi-Security" means an arrangement or transaction described in Clause 22.9.2.

Except as permitted under Clause 22.9.3:

22.9.1 the Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will) create nor permit to subsist any Encumbrance over any of its assets; and

22.9.2 the Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will):

(a) sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by a Security Party;

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

(c) 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

(d) enter into any other preferential arrangement having a similar effect,

in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.

22.9.3 Clauses 22.9.1 and 22.9.2 do not apply to any Encumbrance or (as the case may be) Quasi-Security, which is a Permitted Encumbrance.

22.10 Disposals

22.10.1 Except as permitted under Clause 22.10.2, the Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will) without the prior written consent of the Agent 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.

22.10.2 Clause 22.10.1 does not apply to any sale, lease, transfer or other disposal which is a Permitted Disposal.

22.11 Arm's length basis

22.11.1 Except as permitted under Clause 22.11.2, the Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will) enter into any transaction with any person except on arm's length terms and for full market value.

22.11.2 Fees, costs and expenses payable under the Relevant Documents in the amounts set out in the Relevant Documents delivered to the Agent under Clause 4.1 (Initial conditions precedent) or agreed by the Agent shall not be a breach of this Clause 22.11.

22.12 Merger The Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will) enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction.

22.13 Change of business The Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will) make any substantial change to the general nature of its business from that carried on at the date of this Agreement.

22.14 No other business The Borrower shall not engage in any business other than the ownership, operation, chartering and management of the Vessel.

22.15 No acquisitions The Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will) 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.

22.16 No Joint Ventures The Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will):

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

22.16.2 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).

22.17 No borrowings The Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will) incur or allow to remain outstanding any Financial Indebtedness except for:

22.17.1 the Loan

22.17.2 any Intercompany Loans made available pursuant to an Intercompany Loan Agreement provided that:

(a) the rights of any lender under such Intercompany Loan are (i) fully subordinated to the rights of the Finance Parties under the Finance Documents and (ii) assigned to the Security Agent pursuant to an Intercompany Subordination and Assignment Agreement; and

(b) the rights of the Borrower under such Intercompany Loan Agreement are assigned to the Security Agent pursuant to an Intercompany Loan Assignment,

and in each case any lender under such Intercompany Loan and the Borrower shall enter into such supporting and ancillary documentation in respect of such Intercompany Subordination and Assignment Agreement and Intercompany Loan Assignment as the Agent may reasonably request and the Agent shall be permitted to obtain such legal opinions in respect of such Intercompany Subordination and Assignment Agreement and Intercompany Loan Assignment as the Agent may reasonably require (the costs in respect of which shall be for the account of the Borrower);

22.17.3 under any Master Agreement; or

22.17.4 any Financial Indebtedness arising in the ordinary course of business in connection with the chartering, operation or repair of the Vessel.

22.18 No substantial liabilities Except in the ordinary course of business, the Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will) incur any liability to any third party which is in the Agent's opinion of a substantial nature.

22.19 No loans or credit The Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will) 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 the Vessel.

22.20 No guarantees or indemnities The Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will) incur or allow to remain outstanding any guarantee in respect of any obligation of any person.

22.21 No dividends or payments pursuant to Intercompany Loans The Borrower shall not:

(a) 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 its share capital (or any class of its share capital);

(b) repay or distribute any dividend or share premium reserve;

(c) redeem, repurchase, defease, retire or repay any of its share capital or resolve to do so;

(d) issue any new shares in its share capital or resolve to do so; or

(e) make any payment or repayment pursuant to any Intercompany Loan or Intercompany Loan Agreement.

22.22 Inspection of records The Borrower and the Guarantor will permit the inspection of its financial records and accounts from time to time by the Agent or its nominee.

22.23 No change in Relevant Documents The Borrower and the Guarantor shall not (and shall procure that no other Security Party will) amend, vary, novate, supplement, supersede, waive or terminate any term of, any of the Relevant Documents which are not Finance Documents and excluding the Management Agreement, or any other document delivered to the Agent pursuant to Clause 4.1 (Initial conditions precedent) or Clause 4.2 (Further conditions precedent) or Clause 4.3 (Conditions subsequent).

22.24 Further assurance

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

(a) 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 Security Agent or the Finance Parties provided by or pursuant to the Finance Documents or by law;

(b) to confer on the Security Agent or confer on the Finance Parties an Encumbrance over any property and assets of the Borrower (or that other Security Party 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

(c) to facilitate the realisation of the assets which are, or are intended to be, the subject of the Security Documents.

22.24.2 The Borrower and the Guarantor shall (and shall procure that each other Security Party 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 Security Agent or the Finance Parties by or pursuant to the Finance Documents.

^22.25  No dealings with Master Agreement The Borrower shall not assign, novate or encumber or in any other way transfer any of its rights or obligations under the Master Agreement, nor enter into any interest rate exchange or hedging agreement with anyone other than the Swap Provider.

^22.26  Permitted Transactions The Borrower shall not maintain outstanding Transactions the aggregate notional amount of which shall exceed the amount of the Loan from time to time.

^22.27  No change of ownership of the Borrower The Guarantor will not permit any change in the beneficial ownership or control of the Borrower from that advised to the Agent by the Borrower at the date of this Agreement and will procure that the Borrower will remain a wholly owned subsidiary of the Guarantor.

^22.28  Employees and ERISA Compliance Neither the Borrower nor the Guarantor shall employ any individuals, sponsor, maintain or become obligated to contribute to any Plan or any other pension scheme.  The Borrower and the Guarantor shall provide prompt written notice to the Agent in the event that the Borrower or the Guarantor becomes aware that it has incurred or is reasonably likely to incur any liability with respect to any Plan or any other pension scheme, that, individually or in the aggregate with any other such liability would be reasonably expected to have a Material Adverse Effect

22.29 Sanctions

22.29.1 The Borrower and the Guarantor:

(a) each undertake that it, each Security Party, any other member of the Group, or any Affiliate of any of them, or any director, officer, agent, employee or person acting on behalf of any of the foregoing, is not a Restricted Person and does not act directly or indirectly on behalf of a Restricted Person;

(b) shall, and shall procure that each Security Party, each other member of the Group, and each Affiliate of any of them, shall, not use any revenue or benefit derived from any activity or dealing with a Restricted Person in discharging any obligation due or owing to the Finance Parties;

(c) shall procure that no proceeds from any activity or dealing with a Restricted Person are credited to any bank account held with any Finance Party in its name, in the name of any Security Party, in the name of any other member of the Group, or any Affiliate of any of them;

(d) each undertake that it, each Security Party, each other member of the Group, and each Affiliate of any of them, has taken reasonable measures to ensure compliance with Sanctions;

(e) shall, and shall procure that each Security Party and each other member of the Group shall, to the extent permitted by law promptly upon becoming aware of them supply to the Agent details of any claim, action, suit, proceedings or investigation against it with respect to Sanctions by any Sanctions Authority; and

(f) shall not accept, obtain or receive any goods or services from any Restricted Person, except (without limiting Clause 22.2 (Compliance with laws)), to the extent relating to any warranties and/or guarantees given and/or liabilities incurred in respect of an activity or dealing with a Restricted Person by a Security Party in accordance with this Agreement.

22.29.2 Each Party acknowledges and agrees that the Borrower and the Guarantor do not undertake the requirements under Clause 22.29.1 in favour of any Lender incorporated or having its registered office in the Federal Republic of Germany and no such Lender shall have any right thereunder and shall be deemed not to be a party to the provisions of this Clause 22.29.

22.30 Assignment of Claims The Guarantor shall not assign any claims that it may have against another Security Party, against the Vessel or in respect of a Relevant Document.

22.31 Use of proceeds

22.31.1 The Borrower and the Guarantor shall not, and shall procure that each Security Party, any other member of the Group, and any Affiliate of any of them, shall not, permit or authorise any other person to, directly or indirectly, use, lend, make payments of, contribute or otherwise make available, all or any part of the proceeds of the Loan or other transactions contemplated by this Agreement to fund or facilitate trade, business or other activities: (i) involving or for the benefit of any Restricted Person; or (ii) in any other manner that could result in any Security Party or a Finance Party being in breach of any Sanctions or becoming a Restricted Person.

22.31.2 Each Party acknowledges and agrees that the Borrower and the Guarantor do not undertake the requirements under Clause 22.31.1 in favour of any Lender incorporated or having its registered office in the Federal Republic of Germany and no such Lender shall have any right thereunder and shall be deemed not to be a party to the provisions of this Clause 22.31.

22.32 Master Agreement Proceeds Assignment In the event that the Borrower and the Swap Provider enter into a Master Agreement during the Facility Period, the Borrower shall on the same date as the Master Agreement enter into a Master Agreement Proceeds Assignment which shall be in a form acceptable to the Agent and shall on such date deliver the Master Agreement Proceeds Assignment to the Agent duly executed by the Borrower together with such supporting documentation and evidence as the Agent may reasonably require.

23 Events of Default

23.1 Events of Default Each of the events or circumstances set out in this Clause 23.1 is an Event of Default.

23.1.9 Non-payment A Security Party 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:

(e) its failure to pay is caused by:

(iii) administrative or technical error; or

(iv) a Disruption Event; and

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

23.1.10 Other specific obligations

(a) Any requirement of Clause 21 (Financial Covenants) is not satisfied.

(b) A Security Party does not comply with any obligation in a Finance Document relating to the Insurances or with Clause 17.13 (Additional security).

23.1.11 Other obligations

(a) A Security Party does not comply with any provision of a Finance Document (other than those referred to in Clause 23.1.1 (Non-payment) and Clause 23.1.2 (Other specific obligations).

(b) No Event of Default under this Clause 23.1.3 will occur if the failure to comply is capable of remedy and is remedied within ten Business Days of the earlier of (i) the Agent giving notice to the Borrower and (ii) the Borrower becoming aware of the failure to comply.

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

23.1.13 Cross default Any Financial Indebtedness of the Borrower or the Guarantor:

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

(b) 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

(c) 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.

No Event of Default will occur under this Clause 23.1.5 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within (a) to (c) is either (i) in the case of the Borrower, less than $500,000 or its equivalent in any other currency or currencies (unless such sum is being contested in good faith) or (ii) in the case of the Guarantor, less than $10,000,000 or its equivalent in any other currency or currencies (unless such sum is being contested in good faith).

23.1.14 Insolvency

(a) The Borrower or Guarantor 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.

(b) The value of the assets of a Security Party is less than its liabilities (taking into account contingent and prospective liabilities).

(c) A moratorium is declared in respect of any indebtedness of a Security Party. If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.

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

(a) 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 the Borrower or the Guarantor;

(b) a composition, compromise, assignment or arrangement with any creditor of the Borrower or the Guarantor;

(c) the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager, or trustee or other similar officer in respect of the Borrower or the Guarantor or any of its assets; or

(d) enforcement of any Encumbrance over any assets of the Borrower or the Guarantor,

or any analogous procedure or step is taken in any jurisdiction.

This Clause 23.1.7 shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within five days of commencement.

23.1.16 Creditors' process Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of a Security Party.

23.1.17 Unlawfulness and invalidity

(c) It is or becomes unlawful for a Security Party to perform any of its obligations under the Finance Documents or any Encumbrance created or expressed to be created or evidenced by the Security Documents ceases to be effective.

(d) Any obligation or obligations of any Security Party under any Finance Documents 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 Lenders under the Finance Documents.

(e) 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 a Finance Party) to be ineffective.

23.1.18 Cessation of business The Borrower or the Guarantor ceases, or threatens to cease, to carry on all or a substantial part of its business.

23.1.19 Change in ownership or control of the Borrower The Borrower ceases to be ultimately owned and controlled by the Guarantor or ceases to be a wholly owned subsidiary of the Guarantor.

23.1.20 Expropriation The authority or ability of the Borrower or the Guarantor to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to the Borrower or the Guarantor or any of its assets.

23.1.21 Repudiation and rescission of agreements

(a) A Security Party 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.

(b) Subject to Clause 23.1.13(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 Majority Lenders, likely to have a material adverse effect on the interests of the Lenders under the Finance Documents.

(c) The Management Agreementis 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 Majority Lenders.

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

23.1.23 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 Security Parties or any other person (except a Finance Party) 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 Agent considers is, or may be, prejudicial to the interests of any Finance Party, or ceases to remain in full force and effect.

23.1.24 Reduction of capital The Borrower reduces its authorised or issued or subscribed capital.

23.1.25 Loss of Vessel The 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 Security Agent 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 23.1.17 include an event similar to a Total Loss in relation to any other vessel) shall not be an Event of Default if:

(a) the 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

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

(c) payment of all insurance proceeds in respect of the Total Loss is made in full to the Security Agent on or prior to the date falling six months after the Drawdown Date or such longer period as the Agent may in its discretion agree.

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

This Clause 23.1.18 shall not apply to any challenge or contest which is frivolous or vexatious and is discharged, stayed or dismissed within five days of commencement.

23.1.27 War The country of registration of the Vessel becomes involved in war (whether or not declared) or civil war or is occupied by any other power and the Agent in its discretion considers that, as a result, the security conferred by any of the Security Documents is materially prejudiced.

No Event of Default under this Clause 23.1.19 will occur if within ten Business Days of the earlier of (i) the Agent giving notice to the Borrower and (ii) the Borrower becoming aware of such events and circumstances described in this Clause 23.1.19 occurring, the Borrower registers the Vessel under a different flag acceptable to the Agent (acting reasonably), registers a Mortgage over the Vessel with first priority in favour of the Security Agent (such Mortgage being in a form and substance acceptable to the Agent (acting reasonably)) and provides such supporting corporate authorisations, legal opinions and other supporting documents reasonably requested by the Agent.

^23.1.28  Master Agreement termination A notice is given by the Swap Provider under section 6(a) of the Master Agreement, or by any person under section 6(b)(iv) of the Master Agreement, in either case designating an Early Termination Date for the purpose of the Master Agreement, or the Master Agreement is for any other reason terminated, cancelled, suspended, rescinded, revoked or otherwise ceases to remain in full force and effect.

This Clause 23.1.20 shall not apply to any Transactions that are terminated pursuant to Clause 7.6 (Restrictions).

^23.1.29  Notice of determination The Guarantor gives notice to the Security Agent to determine any obligations under the Guarantee.

23.1.30 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 a Security Party or its assets which have or are reasonably likely to have a Material Adverse Effect.

This Clause 23.1.22 shall not apply to any litigation, arbitration, administrative, governmental, regulatory or other investigations, proceedings or disputes which are frivolous or vexatious and is discharged, stayed or dismissed within 30 days of commencement.

23.1.31 Material adverse change Any event or circumstance occurs which the Majority Lenders reasonably believe has or is reasonably likely to have a Material Adverse Effect.

23.1.32 Sanctions

(a) Any of the Security Parties 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.

(b) 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.

(c) Any of the Security Parties or any Affiliate of any of them is not in compliance with all Sanctions.

23.2 Acceleration On and at any time after the occurrence of an Event of Default which is continuing the Agent may, and shall if so directed by the Majority Lenders:

23.2.8 by notice to the Borrower cancel the Total Commitments, at which time they shall immediately be cancelled;

23.2.9 by notice to the Borrower 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;

23.2.10 by notice to the Borrower declare that the Loan is payable on demand, at which time it shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders; and/or

23.2.11 exercise or direct the Security Agent to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents.

Section 9 Changes to Parties

24 Changes to the Lenders

24.1 Assignments and transfers by the Lenders Subject to this Clause 24, a Lender (the "Existing Lender") may:

24.1.12 assign any of its rights; or

24.1.13 transfer by novation any of its rights and obligations,

under any Finance Document to another bank or financial institution 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").

24.2 Conditions of assignment or transfer

24.2.11 An assignment will only be effective on:

(d) receipt by the Agent of written confirmation from the New Lender (in form and substance satisfactory to the Agent) that the New Lender will assume the same obligations to the other Finance Parties as it would have been under if it was an Original Lender; and

(e) performance by the Agent of all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to such assignment to a New Lender, the completion of which the Agent shall promptly notify to the Existing Lender and the New Lender.

24.2.12 A transfer will only be effective if the procedure set out in Clause 24.5 (Procedure for transfer) is complied with.

24.2.13 If:

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

(f) as a result of circumstances existing at the date the assignment, transfer or change occurs, the Borrower would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 12 (Tax Gross Up and Indemnities) or Clause 13 (Increased Costs),

then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred. This Clause 24.2.3 shall not apply in respect of an assignment or transfer made in the ordinary course of the primary syndication of the Loan.

24.2.14 Each New Lender confirms, for the avoidance of doubt, that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the transfer or assignment becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender.

24.3 Assignment or transfer fee Unless the Agent otherwise agrees and excluding an assignment or transfer (i) to an Affiliate of a Lender, (ii) to a Related Fund or (iii) made in connection with primary syndication of the Loan, the New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Agent (for its own account) a fee of $3,000.

24.4 Limitation of responsibility of Existing Lenders

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

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

(g) the financial condition of any Security Party;

(h) the performance and observance by any Security Party of its obligations under the Relevant Documents or any other documents; or

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

and any representations or warranties implied by law are excluded.

24.4.17 Each New Lender confirms to the Existing Lender and the other Finance Parties that it:

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

(e) will continue to make its own independent appraisal of the creditworthiness of each Security Party and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.

24.4.18 Nothing in any Finance Document obliges an Existing Lender to:

(a) accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause 24; or

(b) support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Security Party of its obligations under the Relevant Documents or otherwise.

24.5 Procedure for transfer

24.5.1 Subject to the conditions set out in Clause 24.2 (Conditions of assignment or transfer) a transfer is effected in accordance with Clause 24.5.3 when the Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to Clause 24.2.1(b), as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate.

24.5.2 The Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the transfer to such New Lender.

24.5.3 Subject to Clause 24.9 (Pro rata interest settlement), on the Transfer Date:

(d) to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents the Borrower and the Guarantor and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and their respective rights against one another shall be cancelled (being the "Discharged Rights and Obligations");

(e) the Borrower and the Guarantorand the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as the Borrower and the Guarantor and the New Lender have assumed and/or acquired the same in place of the Borrower and the Guarantorand the Existing Lender;

(f) the Agent, the Security Agent, the Arranger, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Agent, the Security Agent, the Arranger, and the Existing Lender shall each be released from further obligations to each other under this Agreement; and

(g) the New Lender shall become a Party as a "Lender".

24.6 Procedure for assignment

24.6.4 Subject to the conditions set out in Clause 24.2 (Conditions of assignment or transfer) an assignment may be effected in accordance with Clause 24.6.3 when the Agent executes an otherwise duly completed Assignment Agreement delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to Clause 24.6.2, as soon as reasonably practicable after receipt by it of a duly completed Assignment Agreement appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Assignment Agreement.

24.6.5 The Agent shall only be obliged to execute an Assignment Agreement delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary "know your customer" or similar checks under all applicable laws and regulations in relation to the assignment to such New Lender.

24.6.6 Subject to Clause 24.9 (Pro rata interest settlement), on the Transfer Date:

(a) the Existing Lender will assign absolutely to the New Lender its rights under the Finance Documents and in respect of any Encumbrance created or expressed to be created or evidenced by the Security Documents and expressed to be the subject of the assignment in the Assignment Agreement;

(b) the Existing Lender will be released from the obligations (the "Relevant Obligations") expressed to be the subject of the release in the Assignment Agreement (and any corresponding obligations by which it is bound in respect of any Encumbrance created or expressed to be created or evidenced by the Security Documents); and

(c) the New Lender shall become a Party as a "Lender" and will be bound by obligations equivalent to the Relevant Obligations.

24.6.7 Lenders may utilise procedures other than those set out in this Clause 24.6 to assign their rights under the Finance Documents (but not, without the consent of the relevant Security Party or unless in accordance with Clause 24.5 (Procedure for transfer), to obtain a release by that Security Party from the obligations owed to that Security Party by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that they comply with the conditions set out in Clause 24.2 (Conditions of assignment or transfer).

24.7 Copy of Transfer Certificate or Assignment Agreement to Borrower The Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate or an Assignment Agreement, send to the Borrower a copy of that Transfer Certificate or Assignment Agreement.

24.8 Security over Lenders' rights In addition to the other rights provided to Lenders under this Clause 24, each Lender may without consulting with or obtaining consent from any Security Party, at any time charge, assign or otherwise create Encumbrances in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:

24.8.3 any charge, assignment or other Encumbrance to secure obligations to a federal reserve or central bank; and

24.8.4 in the case of any Lender which is a fund, any charge, assignment or other Encumbrance granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities,

except that no such charge, assignment or Encumbrance shall:

(d) release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Encumbrance for the Lender as a party to any of the Finance Documents; or

(e) require any payments to be made by a Security Party other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents.

24.9 Pro rata interest settlement

24.9.3 If the Agent has notified the Lenders that it is able to distribute interest payments on a "pro rata basis" to Existing Lenders and New Lenders then (in respect of any transfer pursuant to Clause 24.5 (Procedure for transfer) or any assignment pursuant to Clause 24.6 (Procedure for assignment) the Transfer Date of which is after the date of such notification and is not on the last day of an Interest Period):

(f) any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date ("Accrued Amounts") and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than three months, on the next of the dates which falls at three monthly intervals after the first day of that Interest Period); and

(g) the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt:

(iii) when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and

(iv) the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 24.9, have been payable to it on that date, but after deduction of the Accrued Amounts.

24.9.4 In this Clause 24.9 references to "Interest Period" shall be construed to include a reference to any other period for accrual of fees.

25 Changes to the Security Parties

25.1 No assignment or transfer by Security Parties No Security Party may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.

Section 10 The Finance Parties

26 Role of the Agent, the Security Agent and the Arranger

26.1 Appointment of the Agent and the Security Agent

26.1.3 Each of the Arranger and the Lenders appoints the Agent to act as its agent under and in connection with the Finance Documents and each of the Arranger, the Lenders and the Agent appoints the Security Agent to act as its security agent for the purpose of the Security Documents.

26.1.4 Each of the Arranger and the Lenders authorises the Agent and each of the Arranger, the Lenders and the Agent authorises the Security Agent to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Agent or the Security Agent (as the case may be) under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions.

^26.1.5  The Swap Provider appoints the Security Agent to act as its security agent for the purpose of the Security Documents and authorises the Security Agent to exercise the rights, powers, authorities and discretions specifically given to the Security Agent under or in connection with the Security Documents together with any other incidental rights, powers, authorities and discretions.

^26.1.6  Except in Clause 26.15 (Replacement of the Agent) and Clause 26.22 (Period without role for Agent) or where the context otherwise requires, references in this Clause 26 to the "Agent" shall mean the Agent, the Security Agent individually and collectively and references in this Clause 26 to the "Finance Documents" or to any "Finance Document" shall not include the Master Agreement.

26.2 Instructions

26.2.19 The Agent shall:

(d) unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Agent in accordance with any instructions given to it by:

(i) all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and

(ii) in all other cases, the Majority Lenders; and

(e) not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with Clause 26.2.1(a).

26.2.20 The Agent shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Lender or group of Lenders, from that Lender or group of Lenders) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Agent may refrain from acting unless and until it receives any such instructions or clarification that it has requested.

26.2.21 Save in the case of decisions stipulated to be a matter for any other Lender or group of Lenders under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.

26.2.22 The Agent may refrain from acting in accordance with any instructions of any Lender or group of Lenders until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability which it may incur in complying with those instructions.

26.2.23 In the absence of instructions, the Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders.

26.2.24 The Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender's consent) in any legal or arbitration proceedings relating to any Finance Document. This Clause 26.2.6 shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Finance Documents or the enforcement of the Finance Documents.

26.3 Duties of the Agent

26.3.4 The Agent's duties under the Finance Documents are solely mechanical and administrative in nature.

26.3.5 Subject to Clause 26.3.3, the Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent for that Party by any other Party.

26.3.6 Without prejudice to Clause 24.7 (Copy of Transfer Certificate or Assignment Agreement to Borrower), Clause 26.3.1 shall not apply to any Transfer Certificate or any Assignment Agreement.

26.3.7 Except where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.

26.3.8 If the Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the Finance Parties.

26.3.9 If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent, the Arranger or the Security Agent) under this Agreement it shall promptly notify the other Finance Parties.

26.3.10 The Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied).

26.4 Role of the Arranger Except as specifically provided in the Finance Documents, the Arranger has no obligations of any kind to any other Party under or in connection with any Finance Document.

26.5 No fiduciary duties

26.5.4 Subject to Clause 26.12 (Trust) which relates to the Security Agent only, nothing in any Finance Document constitutes the Agent or the Arranger as a trustee or fiduciary of any other person.

26.5.5 Neither the Agent nor the Arranger shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.

26.6 Business with Security Parties The Agent and the Arranger may accept deposits from, lend money to and generally engage in any kind of banking or other business with the Borrower and any other Security Party or its Affiliate.

26.7 Rights and discretions of the Agent

26.7.5 The Agent may:

(d) rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;

(e) assume that:

(v) any instructions received by it from the Majority Lenders, any Lenders or any group of Lenders are duly given in accordance with the terms of the Finance Documents; and

(vi) unless it has received notice of revocation, that those instructions have not been revoked; and

(vii) rely on a certificate from any person:

(A) as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or

(B) to the effect that such person approves of any particular dealing, transaction, step, action or thing,

as sufficient evidence that that is the case and, in the case of (A), may assume the truth and accuracy of that certificate.

26.7.6 The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders or security agent for the Finance Parties (as the case may be)) that:

(g) no Default has occurred (unless it has actual knowledge of a Default arising under Clause 23.1 (Events of Default));

(h) any right, power, authority or discretion vested in any Party or the Majority Lenders has not been exercised; and

(i) any notice or request made by the Borrower (other than a Drawdown Request) is made on behalf of and with the consent and knowledge of all the Security Parties.

26.7.7 The Agent may engage and pay for the advice or services of any lawyers, accountants, surveyors or other experts.

26.7.8 Without prejudice to the generality of Clause 26.7.3 or Clause 26.7.5, the Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Agent (and so separate from any lawyers instructed by the Lenders) if the Agent in its reasonable opinion deems this to be desirable.

26.7.9 The Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying.

26.7.10 The Agent may act in relation to the Finance Documents through its officers, employees and agents and the Agent shall not:

(a) be liable for any error of judgment made by any such person; or

(b) be bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct, omission or default on the part, of any such person,

unless such error or such loss was directly caused by the Agent's gross negligence or wilful misconduct.

26.7.11 Unless a Finance Document expressly provides otherwise the Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.

26.7.12 Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor the Arranger is obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.

26.7.13 The Agent is not obliged to disclose to any Finance Party any details of the rate notified to the Agent by any Lender or the identity of any such Lender for the purpose of Clause 10.2.2 (Market Disruption).

26.7.14 Notwithstanding any provision of any Finance Document to the contrary, the Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.

26.8 Responsibility for documentation Neither the Agent nor the Arranger is responsible or liable for:

26.8.1 the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent, the Arranger, a Security Party or any other person given in or in connection with any Relevant Document or the transactions contemplated in the Finance Documents; or

26.8.2 the legality, validity, effectiveness, adequacy or enforceability of any Relevant Document or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with any Relevant Document; or

26.8.3 any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.

26.9 No duty to monitor The Agent shall not be bound to enquire:

26.9.1 whether or not any Default has occurred;

26.9.2 as to the performance, default or any breach by any Party of its obligations under any Finance Document; or

26.9.3 whether any other event specified in any Finance Document has occurred.

26.10 Exclusion of liability

26.10.1 Without limiting Clause 26.10.2 (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Agent) the Agent shall not be liable (including, without limitation, for negligence or any other category of liability whatsoever) for:

(f) any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Finance Document or any Encumbrance created or expressed to be created or evidenced by the Security Documents, unless directly caused by its gross negligence or wilful misconduct;

(g) exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Finance Document, any Encumbrance created or expressed to be created or evidenced by the Security Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Finance Document or any Encumbrance created or expressed to be created or evidenced by the Security Documents;

(h) any shortfall which arises on the enforcement or realisation of the Trust Property; or

(i) without prejudice to the generality of Clauses 26.10.1(a), 26.10.1(b) and 26.10.1(c), any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:

(i) any act, event or circumstance not reasonably within its control; or

(ii) the general risks of investment in, or the holding of assets in, any jurisdiction,

including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of: nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.

26.10.2 No Party (other than the Agent) may take any proceedings against any officer, employee or agent of the Agent in respect of any claim it might have against the Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Relevant Document and any officer, employee or agent of the Agent may rely on this Clause subject to Clause 1.7 (Third Party Rights) and the provisions of the Third Parties Act.

26.10.3 The Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Agent if the Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Agent for that purpose.

26.10.4 Nothing in this Agreement shall oblige the Agent or the Arranger to carry out:

(a) any "know your customer" or other checks in relation to any person;

(b) any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Lender,

on behalf of any Lender and each Lender confirms to the Agent and the Arranger that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Agent or the Arranger.

26.10.5 Without prejudice to any provision of any Finance Document excluding or limiting the Agent's liability, any liability of the Agent arising under or in connection with any Finance Document or any Encumbrance created or expressed to be created or evidenced by the Security Documents shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Agent or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Agent at any time which increase the amount of that loss. In no event shall the Agent be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Agent has been advised of the possibility of such loss or damages.

26.11 Lenders' indemnity to the Agent

26.11.1 Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Agent and every Receiver and Delegate, within three Business Days of demand, against any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by any of them (otherwise than by reason of the relevant Agent's, Receiver's or Delegate's gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 29.12 (Disruption to payment systems etc.)notwithstanding the Agent's negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) in acting as Agent, Receiver or Delegate under, or exercising any authority conferred under, the Finance Documents (unless the relevant Agent, Receiver or Delegate has been reimbursed by a Security Party pursuant to a Finance Document).

26.11.2 Subject to Clause 26.11.3, the Borrower shall immediately on demand reimburse any Lender for any payment that Lender makes to the Agent pursuant to Clause 26.11.1

26.11.3 Clause 26.11.2 shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the Agent to a Security Party.

26.12 Trust The Security Agent agrees and declares, and each of the other Finance Parties acknowledges, that, subject to the terms and conditions of this Clause 26.12, the Security Agent holds the Trust Property on trust for the Finance Parties absolutely. Each of the other Finance Parties agrees that the obligations, rights and benefits vested in the Security Agent shall be performed and exercised in accordance with this Clause 26.12. The Security Agent shall have the benefit of all of the provisions of this Agreement benefiting it in its capacity as security agent for the Finance Parties, and all the powers and discretions conferred on trustees by the Trustee Act 1925 (to the extent not inconsistent with this Agreement). In addition:

26.12.3 the Security Agent and any Delegate may indemnify itself or himself out of the Trust Property against all liabilities, costs, fees, damages, charges, losses and expenses sustained or incurred by it or him in relation to the taking or holding of any of the Trust Property or in connection with the exercise or purported exercise of the rights, trusts, powers and discretions vested in the Security Agent or any Delegate by or pursuant to the Security Documents or in respect of anything else done or omitted to be done in any way relating to the Security Documents;

26.12.4 the other Finance Parties acknowledge that the Security Agent shall be under no obligation to insure any property nor to require any other person to insure any property and shall not be responsible for any loss which may be suffered by any person as a result of the lack or insufficiency of any insurance;

26.12.5 the Finance Parties agree that the perpetuity period applicable to the trusts declared by this Agreement shall be the period of 125 years from the date of this Agreement;

26.12.6 the Security Agent shall not be liable for any failure, omission, or defect in perfecting the security constituted or created by any Finance Document including, without limitation, any failure to register the same in accordance with the provisions of any of the documents of title of any Security Party to any of the assets thereby charged or effect or procure registration of or otherwise protect the security created by any Security Document under any registration laws in any jurisdiction and may accept without enquiry such title as any Security Party may have to any asset;

26.12.7 the Security Agent shall not be under any obligation to hold any title deed, Finance Document or any other documents in connection with the Finance Documents or any other documents in connection with the property charged by any Finance Document or any other such security in its own possession or to take any steps to protect or preserve the same, and may permit any Security Party to retain all such title deeds, Finance Documents and other documents in its possession; and

26.12.8 save as otherwise provided in the Finance Documents, all moneys which under the trusts therein contained are received by the Security Agent may be invested in the name of or under the control of the Security Agent in any investment for the time being authorised by English law for the investment by trustees of trust money or in any other investments which may be selected by the Security Agent, and the same may be placed on deposit in the name of or under the control of the Security Agent at such bank or institution (including the Security Agent) and upon such terms as the Security Agent may think fit.

The provisions of Part I of the Trustee Act 2000 shall not apply to the Security Agent or the Trust Property.

26.13 Parallel Debt

26.13.5     Notwithstanding any other provision of this Agreement, the Borrower and the Guarantor hereby irrevocably and unconditionally undertake to pay to the Security Agent as creditor in its own right and not as representative of the other Finance Parties, sums equal to and in the currency of each amount payable by the Borrower or the Guarantor (as the case may be) to each of the Finance Parties under each of the Finance Documents as and when that amount falls due for payment under the relevant Finance Document (the "Parallel Debt"). Any security granted to secure such Parallel Debt shall not be held on trust by the Security Agent.

26.13.6     The Security Agent shall have its own independent right to demand payment of the amounts payable by the Borrower and the Guarantor (including, without limitation, through any suit, execution, enforcement of security, recovery of guarantees and applications for and voting in any kind of insolvency proceeding) under this Clause 26.

26.13.7     Any amount due and payable by the Borrower or the Guarantor (as the case may be) to the Security Agent under this Clause 26 shall be decreased to the extent that the other Finance Parties have received payment in full or in part (which payment has not been rescinded or otherwise restored or returned) of the corresponding amount under the other provisions of the Finance Documents, and any amount due and payable by the Borrower or the Guarantor (as the case may be) to the other Finance Parties under those provisions shall be decreased to the extent that the Security Agent has received payment in full or in part (which payment has not been rescinded or otherwise restored or returned) of the corresponding amount under this Clause 26.

26.14 Resignation of the Agent

26.14.1 The Agent may resign and appoint one of its Affiliates acting through an office as successor by giving notice to the other Finance Parties and the Borrower.

26.14.2 Alternatively the Agent may resign by giving 30 days' notice to the other Finance Parties and the Borrower, in which case the Majority Lenders (after consultation with the Borrower) may appoint a successor Agent.

26.14.3 If the Majority Lenders have not appointed a successor Agent in accordance with Clause 26.14.2 within 20 days after notice of resignation was given, the retiring Agent (after consultation with the Borrower) may appoint a successor Agent.

26.14.4 If the Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent and the Agent is entitled to appoint a successor Agent under Clause 26.14.3, the Agent may (if it concludes (acting reasonably) that it is necessary to do so in order to persuade the proposed successor Agent to become a party to this Agreement as Agent) agree with the proposed successor Agent amendments to this Clause 26 and any other term of this Agreement dealing with the rights or obligations of the Agent consistent with then current market practice for the appointment and protection of corporate trustees.

26.14.5 The retiring Agent shall, make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents. The Borrower shall, within three Business Days of demand, reimburse the retiring Agent for the amount of all costs and expenses (including legal fees) properly incurred by it in making available such documents and records and providing such assistance.

26.14.6 The Agent's resignation notice shall only take effect upon the appointment of a successor and (in the case of the Security Agent) the transfer of all the Trust Property to that successor.

26.14.7 Upon the appointment of a successor, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under Clause 26.14.5) but shall remain entitled to the benefit of Clause 14.3 (Indemnity to the Agent) and this Clause 26. Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

26.14.8 The Agent shall resign in accordance with Clause 26.14.2 (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Agent pursuant to Clause 26.14.3) if on or after the date which is three months before the earliest FATCA Application Date relating to any payment to the Agent under the Finance Documents, either:

(a) the Agent fails to respond to a request under Clause 12.7 (FATCA information) and a Lender reasonably believes that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

(b) the information supplied by the Agent pursuant to Clause 12.7 (FATCA information) indicates that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or

(c) the Agent notifies the Borrower and the Lenders that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

and (in each case) a Lender reasonably believes that a Party will be required to make a FATCA Deduction that would not be required if the Agent were a FATCA Exempt Party, and that Lender, by notice to the Agent, requires it to resign.

26.15 Replacement of the Agent

26.15.1 After consultation with the Borrower, the Majority Lenders may, by giving 30 days' notice to the Agent (or, at any time the Agent is an Impaired Agent, by giving any shorter notice determined by the Majority lenders) replace the Agent by appointing a successor Agent.

26.15.2 The retiring Agent shall (at its own cost if it is an Impaired Agent and otherwise at the expense of the Lenders) make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its function as Agent under the Finance Documents.

26.15.3 The appointment of the successor Agent shall take effect on the date specified in the notice from the Majority Lenders to the retiring Agent. As from this date, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under Clause 26.15.2 but shall remain entitled to the benefit of Clause 14.3 (Indemnity to the Agent) and this Clause 26.

26.15.4 Any successor Agent and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

26.16 Confidentiality

26.16.1 In acting as agent for the Finance Parties, the Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.

26.16.2 If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent shall not be deemed to have notice of it.

26.16.3 Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor the Arranger is obliged to disclose to any other person (i) any Confidential Information or (ii) any other information if the disclosure would or might in its reasonable opinion constitute a breach of any laws or a breach of a fiduciary duty.

26.17 Relationship with the Lenders

26.17.2 Subject to Clause 24.9 (Pro rata interest settlement), the Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Agent's principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office:

(f) entitled to or liable for any payment due under any Finance Document on that day; and

(g) entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,

unless it has received not less than five Business Days' prior notice from that Lender to the contrary in accordance with the terms of this Agreement.

26.17.3 Each Lender shall supply the Agent with any information required by the Agent in order to calculate the Mandatory Cost in accordance with Schedule 4 (Mandatory Cost Formula).

26.17.4 Any Lender may by notice to the Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or dispatched to that Lender under the Finance Documents. Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under Clause 31.6 (Electronic communication)) electronic mail address and/or any other information required to enable the sending and receipt of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, fax number, electronic mail address, department and officer by that Lender for the purposes of Clause 31.2 (Addresses) and Clause 31.6.1(b) (Electronic communication) and the Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.

26.18 Credit appraisal by the Lenders Without affecting the responsibility of any Security Party for information supplied by it or on its behalf in connection with any Relevant Document, each Lender confirms to the Agent and the Arranger that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Relevant Document including but not limited to:

26.18.1 the financial condition, status and nature of each Security Party;

26.18.2 the legality, validity, effectiveness, adequacy or enforceability of any Relevant Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Relevant Document;

26.18.3 whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Relevant Document, the transactions contemplated by the Relevant Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of under or in connection with any Relevant Document; and

26.18.4 the right or title of any person in or to, or the value or sufficiency of any part of the Charged Property, the priority of any Encumbrance created or expressed to be created or evidenced by the Security Documents or the existence of any Encumbrance affecting the Charged Property.

26.19 Reference Banks If a Reference Bank ceases to be a Lender, the Agent shall (in consultation with the Borrower) appoint another bank to be a Reference Bank to replace that Reference Bank.

26.20 Agent's management time Any amount payable to the Agent under Clause 14.3 (Indemnity to the Agent), Clause 14.4 (Indemnity to the Security Agent), Clause 16 (Costs and expenses) and Clause 26.11 (Lenders' indemnity to the Agent) shall include the cost of utilising the Agent's management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Agent may notify to the Borrower and the Lenders, and is in addition to any fee paid or payable to the Agent under Clause 11 (Fees).

26.21 Deduction from amounts payable by the Agent If any Party owes an amount to the Agent under the Finance Documents the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.

26.22 Period without role for Agent

26.22.1 In this Clause 26.22, a "Non-Agent Period" means the period in which the Agent has no role pursuant to Clause 26.22.2.

26.22.2 The Agent shall not have a role under this Agreement, other than entering into the Finance Documents in its capacity as Agent, and the other provisions of this Clause 26 shall not apply to the extent that they relate to the Agent if and for as long as each of the following conditions are met:

(a) the only Lender is the Original Lender; and

26.22.3 no Default is continuing nor has the Original Lender (acting reasonably) determined that a Default has occurred and is continuing and the Original Lender has notified the Borrower in writing that it has instructed the Agent to commence acting in its role as the Agent.

26.22.4 During a Non-Agent Period:

(g) subject to Clause 26.22.3(c), all references to "the Agent" (other than in this Clause 26.22) and all references to "an Agent", or "a Party" in any Finance Document shall, where it relates to the Agent, be construed as references to "the Original Lenders" or "the Original Lender";

(h) all payments which are expressed to be made to, received by or    made available to or by the Agent (as applicable), must be made to, received by or made available to or by the Original Lender; and

(i) the reference to "the Agent" in:

(i) Clause 26.8 (Responsibility for documentation) to and including Clause 26.11 (Lenders' indemnity to the Agent);

(ii) Clause 14.2 (Other indemnities); and

(iii) Clause 16 (Costs and Expenses),

must at all times be construed as reference to each of the Agent and the Original Lender in its former and/or existing role of the Agent pursuant to Clause 26.22.3(a).

27 Conduct of Business by the Finance Parties

No provision of this Agreement will:

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

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

27.3 oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.

28 Sharing among the Finance Parties

28.1 Payments to Finance Parties If a Finance Party (a "Recovering Finance Party") receives or recovers any amount from a Security Party other than in accordance with Clause 29 (Payment Mechanics) (a "Recovered Amount") and applies that amount to a payment due under the Finance Documents then:

28.1.11 the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery, to the Agent;

28.1.12 the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Agent and distributed in accordance with Clause 29 (Payment Mechanics), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and

28.1.13 the Recovering Finance Party shall, within three Business Days of demand by the Agent, pay to the Agent an amount (the "Sharing Payment") equal to such receipt or recovery less any amount which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 29.6 (Partial payments).

28.2 Redistribution of payments The Agent shall treat the Sharing Payment as if it had been paid by the relevant Security Party and distribute it between the Finance Parties (other than the Recovering Finance Party) (the "Sharing Finance Parties") in accordance with Clause 29.6 (Partial payments) towards the obligations of that Security Party to the Sharing Finance Parties.

28.3 Recovering Finance Party's rightsOn a distribution by the Agent under Clause 28.2 (Redistribution of payments) of a payment received by a Recovering Finance Party from a Security Party, as between the relevant Security Party and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Security Party.

28.4 Reversal of redistribution If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:

28.4.5 each Sharing Finance Party shall, upon request of the Agent, pay to the Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the "Redistributed Amount"); and

28.4.6 as between the relevant Security Party and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Security Party.

28.5 Exceptions

28.5.15 This Clause 28 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the relevant Security Party.

28.5.16 A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if:

(d) it notified that other Finance Party of the legal or arbitration proceedings; and

(e) that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.

Section 11 Administration

29 Payment Mechanics

29.1 Payments to the Agent On each date on which a Security Party or a Lender is required to make a payment under a Finance Document (other than the Master Agreement), that Security Party or that Lender shall make the same available to the Agent for value on the due date at the time and in such funds specified by the Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.

Payment shall be made to such account in the principal financial centre of the country of that currency with such bank as the Agent specifies.

29.2 Distributions by the Agent Each payment received by the Agent under the Finance Documents for another Party shall, subject to Clause 29.3 (Distributions to a Security Party) and Clause 29.4 (Clawback and pre-funding) be made available by the Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Agent by not less than five Business Days' notice with a bank specified by that Party in the principal financial centre of the country of that currency.

29.3 Distributions to a Security Party The Agent may (with the consent of a Security Party or in accordance with Clause 30 (Set-Off)) apply any amount received by it for that Security Party in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Security Party under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.

29.4 Clawback and pre-funding

29.4.17 Where a sum is to be paid to the Agent under the Finance Documents for another Party, the Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.

29.4.18 Unless Clause 29.4.3 applies, if the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Agent shall on demand refund the same to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its cost of funds.

29.4.19 If the Agent is willing to make available amounts for the account of the Borrower before receiving funds from the Lenders then if and to the extent that the Agent does so but it proves to be the case that it does not then receive funds from a Lender in respect of a sum which it paid to the Borrower:

(j) the Borrower shall on demand refund it to the Agent; and

(k) the Lender by whom those funds should have been made available or, if that Lender fails to do so, the Borrower, shall on demand pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding cost incurred by it as a result of paying out that sum before receiving those funds from that Lender.

29.5 Impaired Agent

29.5.4 If, at any time, the Agent becomes an Impaired Agent, a Security Party or a Lender which is required to make a payment under the Finance Documents to the Agent in accordance with Clause 29.1 (Payments to the Agent) may instead either:

(f) pay that amount direct to the required recipient(s); or

(g) if in its absolute discretion it considers that it is not reasonably practicable to pay that amount direct to the required recipient(s), pay that amount or the relevant part of that amount to an interest-bearing account held with an Acceptable Bank in relation to which no Insolvency Event has occurred and is continuing, in the name of the Security Party or the Lender making the payment (the "Paying Party") and designated as a trust account for the benefit of the Party or Parties beneficially entitled to that payment under the Finance Documents (the "Recipient Party" or "Recipient Parties").

In each case such payments must be made on the due date for payment under the Finance Documents.

29.5.5 All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the Recipient Party or the Recipient Parties pro rata to their respective entitlements.

29.5.6 A Party which has made a payment in accordance with this Clause 29.5 shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to the credit of the trust account.

29.5.7 Promptly upon the appointment of a successor Agent in accordance with Clause 26.15 (Replacement of the Agent), each Paying Party shall (other than to the extent that that Party has given an instruction pursuant to Clause 29.5.5) give all requisite instructions to the bank with whom the trust account is held to transfer the amount (together with any accrued interest) to the successor Agent for distribution to the relevant Recipient Party or Recipient Parties in accordance with Clause 29.2 (Distributions by the Agent).

29.5.8 A Paying Party shall, promptly upon request by a Recipient Party and to the extent:

(d) that it has not given an instruction pursuant to Clause 29.5.4; and

(e) that it has been provided with the necessary information by that Recipient Party,

give all requisite instructions to the bank with whom the trust account is held to transfer the relevant amount (together with any accrued interest) to that Recipient Party.

29.6 Partial payments

29.6.4 If the Agent receives a payment that is insufficient to discharge all the amounts then due and payable by a Security Party under the Finance Documents (other than the Master Agreement), the Agent shall apply that payment towards the obligations of that Security Party under the Finance Documents (other than the Master Agreement)in the following order:

(j) first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent or the Security Agent under the Finance Documents;

(k) secondly, in or towards payment pro rata of any accrued interest, fee or commission due but unpaid under this Agreement;

(l) thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement; and

(m) fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents,

provided that any part of the Indebtedness arising out of the Master Agreement shall be satisfied only after every other part of the Indebtedness for the time being due and payable has been satisfied in full.

29.6.5 The Agent shall, if so directed by the Majority Lenders, vary the order set out in Clauses 29.6.1(b) to 29.6.1(d).

29.6.6 Clauses 29.6.1 and 29.6.2 will override any appropriation made by a Security Party.

29.7 No set-off by Security Parties All payments to be made by a Security Party under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.

29.8 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).

During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.

29.9 Currency of account

^29.9.9  Subject to Clauses 29.9.2 to 29.9.5, dollars is the currency of account and payment for any sum due from a Security Party under any Finance Document.

29.9.10 A repayment or payment of all or part of the Loan or an Unpaid Sum shall be made in the currency in which the Loan or Unpaid Sum is denominated on its due date.

29.9.11 Each payment of interest shall be made in the currency in which the sum in respect of which the interest is payable was denominated when that interest accrued.

29.9.12 Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.

^29.9.13  Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.

29.10 Control account The Agent shall open and maintain on its books a control account in the name of the Borrower showing the advance of the Loan and the computation and payment of interest and all other sums due under this Agreement. The Borrower's obligations to repay the Loan and to pay interest and all other sums due under this Agreement shall be evidenced by the entries from time to time made in the control account opened and maintained under this Clause 29.10 and those entries will, in the absence of manifest error, be conclusive and binding.

29.11 Change of currency

29.11.9 Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:

(f) any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Agent (after consultation with the Borrower); and

(g) any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Agent (acting reasonably).

29.11.10 If a change in any currency of a country occurs, this Agreement will, to the extent the Agent (acting reasonably and after consultation with the Borrower) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Interbank Market and otherwise to reflect the change in currency.

29.12 Disruption to payment systems etc. If either the Agent determines in its discretion that a Disruption Event has occurred or the Agent is notified by the Borrower that a Disruption Event has occurred:

29.12.5 the Agent may, and shall if requested to do so by the Borrower, consult with the Borrower with a view to agreeing with the Borrower such changes to the operation or administration of the Loan as the Agent may deem necessary in the circumstances;

29.12.6 the Agent shall not be obliged to consult with the Borrower in relation to any changes mentioned in Clause 29.12.1 if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to any such changes;

29.12.7 the Agent may consult with the Finance Parties in relation to any changes mentioned in Clause 29.12.1 but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances;

29.12.8 any such changes agreed upon by the Agent and the Borrower shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of Clause 35 (Amendments and Waivers);

29.12.9 the Agent shall not be liable for any damages, costs or losses whatsoever (including, without limitation, for negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this Clause 29.12; and

29.12.10 the Agent shall notify the Finance Parties of all changes agreed pursuant to Clause 29.12.4.

30 Set-Off

30.1 Set-off A Finance Party may set off any matured obligation due from the Borrower or the Guarantor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to the Borrower or the Guarantor (as the case may be), regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.

^30.2  Master Agreement rights The rights conferred on the Swap Provider by this Clause 30 shall be in addition to, and without prejudice to or limitation of, the rights of netting and set off conferred on the Swap Provider by the Master Agreement.

31 Notices

31.1 Communications in writing Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax, letter or electronic mail.

31.2 Addresses The address, fax number and electronic mail address (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:

31.2.20 in the case of the Borrower, that identified with its name below;

^31.2.21  in the case of the Guarantor, that identified with its name below;

31.2.22 in the case of each Lender, that notified in writing to the Agent on or prior to the date on which it becomes a Party;

^31.2.23  in the case of the Swap Provider, that identified with its name below;

^31.2.24  in the case of the Arranger, that identified with its name below; and

31.2.25 in the case of the Agent or the Security Agent, that identified with its name below,

or any substitute address, fax number, or department or officer as the Party may notify to the Agent (or the Agent may notify to the other Parties, if a change is made by the Agent) by not less than five Business Days' notice.

31.3 Delivery Any communication or document made or delivered by one Party to another under or in connection with the Finance Documents will only be effective:

31.3.9 if by way of fax, when received in legible form;

31.3.10 if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address; or

31.3.11 if by way of electronic mail, then in accordance with Clause 31.6.2 and Clause 31.6.3,

and, if a particular department or officer is specified as part of its address details provided under Clause 31.2 (Addresses), if addressed to that department or officer.

Any communication or document to be made or delivered to the Agent or the Security Agent will be effective only when actually received by the Agent or the Security Agent and then only if it is expressly marked for the attention of the department or officer identified with the Agent's or the Security Agent's signature below (or any substitute department or officer as the Agent or the Security Agent shall specify for this purpose).

All notices from or to a Security Party (save in respect of the Master Agreement) shall be sent through the Agent.

Subject to Clause 5.1 (Delivery of a Drawdown Request), any communication or document which becomes effective, in accordance with this Clause 31.3, after 5.00 p.m. in the place of receipt shall be deemed only to become effective on the following day.

31.4 Notification of address and fax number Promptly upon changing its address, fax number or electronic mail address, the Agent shall notify the other Parties.

31.5 Communication when Agent is Impaired Agent If the Agent is an Impaired Agent the Parties may, instead of communicating with each other through the Agent, communicate with each other directly and (while the Agent is an Impaired Agent) all the provisions of the Finance Documents which require communications to be made or notices to be given to or by the Agent shall be varied so that communications may be made and notices given to or by the relevant Parties directly. This provision shall not operate after a replacement Agent has been appointed.

31.6 Electronic communication

31.6.4 Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic means to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted form of communication and if those two Parties:

(f) notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and

(g) notify each other of any change to their address or any other such information supplied by them by not less than five Business Days' notice.

31.6.5 Any electronic communication made between those two Parties will be effective only when actually received in readable form and in the case of any electronic communication made by a Party to the Agent or the Security Agent only if it is addressed in such a manner as the Agent or the Security Agent shall specify for this purpose.

31.6.6 Any electronic communication which becomes effective, in accordance with Clause 31.6.2, after 5.00 p.m. in the place of receipt shall be deemed only to become effective on the following day.

31.7 English language Any notice given under or in connection with any Finance Document must be in English. All other documents provided under or in connection with any Finance Document must be:

31.7.14 in English; or

31.7.15 if not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.

32 Calculations and Certificates

32.1 Accounts In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by the Agent pursuant to Clause 29.10 (Control account) are prima facie evidence of the matters to which they relate.

32.2 Certificates and determinations Any certification or determination by the Agent of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.

32.3 Day count convention Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Interbank Market differs, in accordance with that market practice.

33 Partial Invalidity

If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

34 Remedies and Waivers

No failure to exercise, nor any delay in exercising, on the part of any Finance Party or Secured Party, any right or remedy under a Finance Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any Finance Document. No election to affirm any Finance Document on the part of any Finance Party or Secured Party shall be effective unless it is in writing. No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.

35 Amendments and Waivers

35.1 Required consents

35.1.6 Subject to Clause 35.2 (Exceptions) any term of the Finance Documents (other than the Master Agreement) may be amended or waived only with the consent of the Majority Lenders and the Borrower and any such amendment or waiver will be binding on all Parties.

35.1.7 The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause 35.

35.1.8 Without prejudice to the generality of Clauses 26.7.3, 26.7.4 and 26.7.5 (Rights and discretions of the Agent), the Agent may engage, pay for and rely on the services of lawyers in determining the consent level required for and effecting any amendment, waiver or consent under this Agreement.

35.2 Exceptions

35.2.7 An amendment, waiver or (in the case of a Security Document) a consent of, or in relation to, any term of any Finance Document that has the effect of changing or which relates to:

(j) the definition of "Majority Lenders" in Clause 1.1 (Definitions);

(k) an extension to the date of payment of any amount under the Finance Documents;

(l) a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable;

(m) a change in currency of payment of any amount under the Finance Documents;

(n) an increase in any Commitment, an extension of the Availability Period or any requirement that a cancellation of Commitments reduces the Commitments of the Lenders rateably;

(o) any provision which expressly requires the consent of all the Lenders;

(p) Clause 2.2 (Finance Parties' rights and obligations), Clause 24 (Changes to the Lenders), this Clause 35, Clause 39 (Governing Law) or Clause 40.1 (Jurisdiction of English courts);

(q) (other than as expressly permitted by the provisions of any Finance Document) the nature or scope of:

(iv) any Guarantee;

(v) the Charged Property; or

(vi) the manner in which the proceeds of enforcement of the Security Documents are distributed; or

(r) the release of the Guarantee or of any Encumbrance created or expressed to be created or evidenced by the Security Documents unless permitted under this Agreement or any other Finance Document or relating to a sale or disposal of an asset which is the subject of any Encumbrance created or expressed to be created or evidenced by the Security Documents where such sale or disposal is expressly permitted under this Agreement or any other Finance Document;

shall not be made, or given, without the prior consent of all the Lenders.

35.2.8 An amendment or waiver which relates to the rights or obligations of the Agent, the Security Agent or the Arranger (each in their capacity as such) may not be effected without the consent of the Agent, the Security Agent or, as the case may be, the Arranger.

35.3 Replacement of Lender

35.3.16 If:

(a) any Lender becomes a Non-Consenting Lender (as defined in Clause 35.3.4); or

(b) the Borrower or any other Security Party becomes obliged to repay any amount in accordance with Clause 7.1 (Illegality) or to pay additional amounts pursuant to Clause 12.2 (Tax gross-up), Clause 12.3 (Tax Indemnity) or Clause 13.1 (Increased costs) to any Lender,

then the Borrower may, on ten Business Days' prior written notice to the Agent and such Lender, replace such Lender by requiring such Lender to (and, to the extent permitted by law, such Lender shall) transfer pursuant to Clause 24 (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 (a "Replacement Lender") selected by the Borrower, which confirms its willingness to assume and does assume all the obligations of the transferring Lender in accordance with Clause 24 (Changes to the Lenders) for a purchase price in cash payable at the time of 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 24.9 (Pro rata interest settlement), Break Costs and other amounts payable in relation thereto under the Finance Documents.

35.3.17 The replacement of a Lender pursuant to this Clause 35.3 shall be subject to the following conditions:

(a) the Borrower shall have no right to replace the Agent or Security Agent;

(b) neither the Agent nor the Lender shall have any obligation to the Borrower to find a Replacement Lender;

(c) in the event of a replacement of a Non-Consenting Lender such replacement must take place no later than 15 Business Days after the date on which that Lender is deemed a Non-Consenting Lender;

(d) in no event shall the Lender replaced under this Clause 35.3 be required to pay or surrender to such Replacement Lender any of the fees received by such Lender pursuant to the Finance Documents; and

(e) the Lender shall only be obliged to transfer its rights and obligations pursuant to Clause 35.3.1 once it is satisfied that it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to that transfer.

35.3.18 A Lender shall perform the checks described in Clause 35.3.2(e) as soon as reasonably practicable following delivery of a notice referred to in Clause 35.3.1 and shall notify the Agent and the Borrower when it is satisfied that it has complied with those checks.

35.3.19 In the event that:

(a) the Borrower or the Agent (at the request of the Borrower) has requested the Lenders to give a consent in relation to, or to agree to a waiver or amendment of, any provisions of the Finance Documents;

(b) the consent, waiver or amendment in question requires the approval of all the Lenders; and

(c) Lenders whose Commitments aggregate more than 66²/₃% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 66²/₃% of the Total Commitments prior to that reduction) have consented or agreed to such waiver or amendment,

then any Lender who does not and continues not to consent or agree to such waiver or amendment shall be deemed a "Non-Consenting Lender".

36 Confidentiality

36.1 Confidential Information Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 36.2 (Disclosure of Confidential Information) and Clause 36.3 (Disclosure to numbering service providers), and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.

36.2 Disclosure of Confidential Information Any Finance Party may disclose:

36.2.20 to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this Clause 36.2.1 is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;

36.2.21 to any person:

(a) to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Agent or Security Agent and, in each case, to any of that person's Affiliates, Related Funds, Representatives and professional advisers;

(b) with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Security Parties and to any of that person's Affiliates, Related Funds, Representatives and professional advisers;

(c) appointed by any Finance Party or by a person to whom Clause 36.2.2(a) or 36.2.2(b) applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under Clause 26.17.2 (Relationship with the Lenders));

(d) who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in Clause 36.2.2(a) or 36.2.2(b);

(e) to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;

(f) to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes;

(g) to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 24.8 (Security over Lenders' rights);

(h) who is either an insurance company, a reinsurance company, an insurance broker or a reinsurance broker that in either case is providing or may potentially provide insurance cover either (i) in respect of the assets that are the subject of the Finance Document or (ii) pursuant to and in accordance with the terms of the Finance Documents;

(i) who is a Party; or

(j) with the consent of the Borrower;

in each case, such Confidential Information as that Finance Party shall consider appropriate if:

(i) in relation to Clauses 36.2.2(a), 36.2.2(b) and 36.2.2(c), the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;

(ii) in relation to Clause 36.2.2(d), the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;

(iii) in relation to Clauses 36.2.2(e), 36.2.2(f) and 36.2.2(g), the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances;

36.2.22 to any person appointed by that Finance Party or by a person to whom Clause 36.2.2(a) or 36.2.2(b) applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this Clause 36.2.3 if the service provider to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking; and

^36.2.23  to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Security Parties if the rating agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information.

36.3 Disclosure to numbering service providers

36.3.8 Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Loan and/or one or more Security Parties the following information:

(f) names of Security Parties;

(g) country of domicile of Security Parties;

(h) place of incorporation of Security Parties;

(i) date of this Agreement;

(j) Clause 39 (Governing law);

(k) the names of the Agent and the Arranger;

(l) date of each amendment and restatement of this Agreement;

(m) amount of Total Commitments;

(n) currencies of the Loan;

(o) type of Loan;

(p) ranking of the Loan;

(q) Termination Date;

(r) changes to any of the information previously supplied pursuant to (a) to (l); and

(s) such other information agreed between such Finance Party and that Security Party,

to enable such numbering service provider to provide its usual syndicated loan numbering identification services.

36.3.9 The Parties acknowledge and agree that each identification number assigned to this Agreement, the Loan and/or one or more Security Parties by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.

36.3.10 The Borrower represents that none of the information set out in Clauses 36.3.1(a) to 36.3.1(n) is, nor will at any time be, unpublished price-sensitive information.

36.3.11 The Agent shall notify the Borrower and the other Finance Parties of:

(b) the name of any numbering service provider appointed by the Agent in respect of this Agreement, the Loan and/or one or more Security Parties; and

(c) the number or, as the case may be, numbers assigned to this Agreement, the Loan and/or one or more Security Parties by such numbering service provider.

36.4 Entire agreement This Clause 36 constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.

36.5 Inside information Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.

36.6 Notification of disclosure Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Borrower:

36.6.4 of the circumstances of any disclosure of Confidential Information made pursuant to Clause 36.2.2(e) (Disclosure of Confidential Information) except where such disclosure is made to any of the persons referred to in that Clause during the ordinary course of its supervisory or regulatory function; and

36.6.5 upon becoming aware that Confidential Information has been disclosed in breach of this Clause 36.

36.7 Continuing obligations The obligations in this Clause 36 are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of 12 months from the earlier of:

36.7.5 the date on which all amounts payable by the Security Parties under or in connection with the Finance Documents have been paid in full and the Loan has been cancelled or otherwise ceases to be available; and

36.7.6 the date on which such Finance Party otherwise ceases to be a Finance Party.

37 Disclosure of Lender Details by Agent

37.1 Supply of Lender details to Borrower The Agent shall provide to the Borrower within ten Business Days of a request by the Borrower (but no more frequently than once per calendar month) a list (which may be in electronic form) setting out the names of the Lenders as at the date of that request, their respective Commitments, the address and fax number (and the department or officer, if any, for whose attention any communication is to be made) of each Lender for any communication to be made or document to be delivered under or in connection with the Finance Documents, the electronic mail address and/or any other information required to enable the sending and receipt of information by electronic mail or other electronic means to and by each Lender to whom any communication under or in connection with the Finance Documents may be made by that means and the account details of each Lender for any payment to be distributed by the Agent to that Lender under the Finance Documents.

37.2 Supply of Lender details at Borrower's direction

37.2.12 The Agent shall, at the request of the Borrower, disclose the identity of the Lenders and the details of the Lenders' Commitments to any:

(a) other Party or any other person if that disclosure is made to facilitate, in each case, a refinancing of the Financial Indebtedness arising under the Finance Documents or a material waiver or amendment of any term of any Finance Document; and

(b) Security Party.

37.2.13 Subject to Clause 37.2.3, the Borrower shall procure that the recipient of information disclosed pursuant to Clause 37.2.1 shall keep such information confidential and shall not disclose it to anyone and shall ensure that all such information is protected with security measures and a degree of care that would apply to the recipient's own confidential information.

37.2.14 The recipient may disclose such information to any of its officers, directors, employees, professional advisers, auditors and partners as it shall consider appropriate if any such person is informed in writing of its confidential nature, except that there shall be no such requirement to so inform if that person is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by duties of confidentiality in relation to the information.

37.3 Supply of Lender details to other Lenders

37.3.11 If a Lender (a "Disclosing Lender") indicates to the Agent that the Agent may do so, the Agent shall disclose that Lender's name and Commitment to any other Lender that is, or becomes, a Disclosing Lender.

37.3.12 The Agent shall, if so directed by the Requisite Lenders, request each Lender to indicate to it whether it is a Disclosing Lender.

37.4 Lender enquiry If any Lender believes that any entity is, or may be, a Lender and:

37.4.11 that entity ceases to have an Investment Grade Rating; or

37.4.12 an Insolvency Event occurs in relation to that entity,

the Agent shall, at the request of that Lender, indicate to that Lender the extent to which that entity has a Commitment.

37.5 Lender details definitions In this Clause 37:

"Investment Grade Rating" means, in relation to an entity, a rating for its long-term unsecured and non-credit-enhanced debt obligations of BBB- or higher by Standard & Poor's Rating Services or Fitch Ratings Ltd or Baa3 or higher by Moody's Investors Service Limited or a comparable rating from an internationally recognised credit rating agency.

"Requisite Lenders" means a Lender or Lenders whose Commitments aggregate 15 per cent (or more) of the Total Commitments (or if the Total Commitments have been reduced to zero, aggregated 15 per cent (or more) of the Total Commitments immediately prior to that reduction).

38 Counterparts

Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.

Section 12 Governing Law and Enforcement

39 Governing Law

This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

40 Enforcement

40.1 Jurisdiction of English courts The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement or any non-contractual obligation arising out of or in connection with this Agreement) (a "Dispute"). Each Party agrees that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

This Clause 40.1 is for the benefit of the Finance Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, any Finance Party may take concurrent proceedings in any number of jurisdictions.

40.2 Waiver of Jury Trial EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MIGHT HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE FINANCE DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER FINANCE DOCUMENTS BY, AMONGST OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS CLAUSE 40.

40.3 Service of process

40.3.7 Without prejudice to any other mode of service allowed under any relevant law, the Borrower and the Guarantor:

(d) irrevocably appoints Scorpio UK Limited currently of 10 Lower Grosvenor Place, London SW1W 0EN, England (Attention: General Counsel) as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and

(e) agrees that failure by a process agent to notify the Borrower or the Guarantor (as the case may be) of the process will not invalidate the proceedings concerned.

40.3.8 If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process or terminates its appointment as agent for service of process, the Borrower or the Guarantor (as the case may be) must immediately (and in any event within five days of such event taking place) appoint another agent on terms acceptable to the Agent. Failing this, the Agent may appoint another agent for this purpose.

41 Patriot Act Notice

Each of the Finance Parties hereby notifies the Borrower and the Guarantor that pursuant to the requirements of the Patriot Act and the policies and practices of the Finance Parties, the Finance Parties are required to obtain, verify and record certain information and documentation that identifies each Security Party, which information includes the name and address of each Security Party  and such other information that will allow the Finance Parties to identify each Security Party  in accordance with the Patriot Act.

This Agreement has been entered into on the date stated at the beginning of this Agreement.

Schedule 1The Original Lenders

Name of Original Lender	Commitment
ABN AMRO Bank N.V.	$26,000,000

Schedule 2Part I
Conditions Precedent

1 Security Parties

(a) Constitutional documents Copies of the constitutional documents of the Borrower and the Guarantor together with such other evidence as the Agent may reasonably require that the Borrower and the Guarantor are each duly incorporated in its country of incorporation and remains in existence with power to enter into, and perform its obligations under, the Relevant Documents to which it is or is to become a party.

(b) Certificates of good standing A certificate of good standing in respect of the Borrower and the Guarantor (if such a certificate can be obtained).

(c) Board resolutions A copy of a resolution of the board of directors of the Borrower and the Guarantor:

(i) approving the terms of, and the transactions contemplated by, the Relevant Documents to which it is a party and resolving that it execute those Relevant Documents; and

(ii) authorising a specified person or persons to execute those Relevant Documents (and all documents and notices to be signed and/or dispatched under those documents) on its behalf.

(d) Specimen signatures A specimen of the signature of each person authorised by the resolutions referred to in (c).

(e) Officer's certificates An original certificate of a duly authorised officer of the Borrower and the Guarantor:

(i) certifying that each copy document relating to it specified in this Part I of Schedule 2 is correct, complete and in full force and effect;

(ii) setting out the names of the directors, officers and shareholders of the Borrower and the Guarantor (as the case may be) and the proportion of shares held by each shareholder; and

(iii) confirming that borrowing or guaranteeing or securing, as appropriate, the Loan would not cause any borrowing, guarantee, security or similar limit binding on that Security Party to be exceeded.

(f) Powers of attorney The original notarially attested and legalised power of attorney of each of the Borrower and the Guarantor under which the Relevant Documents to which it is or is to become a party are to be executed or transactions undertaken by the Borrower and the Guarantor.

2 Security and related documents

(a) Vessel documents Photocopies, certified as true, accurate and complete by a director, the secretary or the legal advisers of the Borrower, of:

(i) any Charter;

(ii) the Management Agreement together with a confirmation from the parties thereto that the Vessel has been delivered into the Management Agreement;

(iii) the Vessel's current Safety Construction, Safety Equipment, Safety Radio and Load Line Certificates;

(iv) evidence of the Vessel's current Certificate of Financial Responsibility issued pursuant to the United States Oil Pollution Act 1990;

(v) the Vessel's current SMC;

(vi) the ISM Company's current DOC;

(vii) the Vessel's current ISSC;

(viii) the Vessel's current IAPPC;

(ix) the Vessel's current Tonnage Certificate;

in each case together with all addenda, amendments or supplements.

(b) Evidence of Borrower's title Certificate of ownership and encumbrance (or equivalent) issued by the Registrar of Ships (or equivalent official) of the Marshall Islands confirming that (i) the Vessel is permanently registered under that flag in the ownership of the Borrower, (ii) the Mortgage has been registered with first priority against the Vessel and (iii) there are no further Encumbrances registered against the Vessel.

(c) Evidence of insuranceand insurance report Evidence that the Vessel is insured in the manner required by the Security Documents and that letters of undertaking will be issued in the manner required by the Security Documents, together with (if required by the Agent) the written approval of the Insurances by way of a written report from an insurance adviser appointed by the Agent, but at the expense of the Borrower.

(d) Confirmation of class An interim Class Certificate for hull and machinery confirming that the Vessel is classed with the highest class applicable to vessels of her type with Lloyds Register or such other classification society as may be acceptable to the Agent.

(e) Valuation Two valuations dated not more than 45 days prior to the Drawdown Date evidencing the FMV of the Vessel, certifying that the amount of the Loan requested to be advanced pursuant to the Drawdown Request is no greater than 50% of the FMV of the Vessel, such valuations to be obtained by the Agent at the expense of the Borrower.

(f) Security Documents The Security Documents (other than the Master Agreement Proceeds Assignment), together with all other documents required by any of them, including, without limitation, (i) all notices of assignment and/or charge and evidence that those notices will be duly acknowledged by the recipients and (ii) all share certificates, certified copy share registers or registers of members, transfer forms, proxy forms, letters of resignation and letters of undertaking.

^(g)  Mandates Such duly signed forms of mandate, and/or other evidence of the opening of the Account, as the Security Agent may require.

(h) No disputes The written confirmation of the Borrower that there is no dispute under any of the Relevant Documents as between the parties to any such document.

⁽ⁱ⁾  Account Bank's confirmation The written confirmation of the Account Bank that the Account has been opened with the Account Bank and to its actual knowledge is free from Encumbrances other than as created by or pursuant to the Security Documents and rights of set off in favour of the Account Bank as account holder.

^(j)  Managers' Undertakings The Managers' Undertakings.

(k) Intercompany Loan Agreement A photocopy, certified as true, accurate and complete by a director, the secretary or the legal advisers of the Borrower, of any Intercompany Loan Agreement.

3 Legal opinions

The following legal opinions, each addressed to the Agent, the Security Agent, the Swap Provider and the Lenders and capable of being relied upon by any persons who become Lenders pursuant to the primary syndication of the Loan or confirmation satisfactory to the Agent that such opinions will be given:

(a) a legal opinion of Stephenson Harwood LLP, legal advisers to the Agent as to English law substantially in the form distributed to the Lenders prior to signing this Agreement;

(b) a legal opinion of the following legal advisers to the Agent:

(i) Seward and Kissel LLP as to Marshall Islands law; and

(ii) Clifford Chance LLP as to Netherlands law.

4 Other documents and evidence

(a) Drawdown Request A duly completed Drawdown Request.

(b) Process agent Evidence that any process agent referred to in Clause 40.2 (Service of process) and any process agent appointed under any other Finance Document has accepted its appointment.

(c) Other Authorisations A copy of any other Authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable (if it has notified the Borrower accordingly) in connection with the entry into and performance of the transactions contemplated by any Relevant Document or for the validity and enforceability of any Relevant Document.

(d) Financial statements A copy of the Original Financial Statements of the Guarantor.

(e) Fees The Fee Letter and evidence that the fees, costs and expenses then due from the Borrower under Clause 11 (Fees) and Clause 16 (Costs and Expenses) have been paid or will be paid by the Drawdown Date.

(f) "Know your customer" documents Such documentation and other evidence as is reasonably requested by the Agent in order for the Lenders to comply with all necessary "know your customer" or similar identification procedures in relation to the transactions contemplated in the Finance Documents.

Part II
Conditions Subsequent

1 Letters of undertaking Letters of undertaking in respect of the Insurances as required by the Security Documents together with copies of the relevant policies or cover notes or entry certificates duly endorsed with the interest of the Finance Parties.

2 Acknowledgements of notices Acknowledgements of all notices of assignment and/or charge given pursuant to the Security Documents.

3 Legal opinions Such of the legal opinions specified in Part I of this Schedule 2 as have not already been provided to the Agent.

4 Master's receipt The master's receipt for the Mortgage.

Schedule 3Drawdown Request

From: SBI Puro Shipping Company Limited

To: [Agent]

Dated:

Dear Sirs

SBI Puro Shipping Company Limited – $26,000,000 Loan Agreement dated [                        ] 2015 (the "Agreement")

1 We refer to the Agreement. This is the Drawdown Request. Terms defined in the Agreement have the same meaning in this Drawdown Request unless given a different meaning in this Drawdown Request.

2 We wish to borrow the Loan on the following terms:

Proposed Drawdown Date: [        ] (or, if that is not a Business Day, the next Business Day)

Amount:    $[        ]

Interest Period:    [        ]

3 We confirm that each condition specified in Clause 4.2 (Further conditions precedent) is satisfied on the date of this Drawdown Request.

4 The sum of $[                ] shall be deducted from the Loan and shall be applied as follows:

(a)    $100,000 to be paid to the Arranger in accorance with the Fee Letter; and

(b) $[                ] to be paid to the Agent in payment of fees payable pursuant to clause 11.1 of the Agrement.

5 The balance of the proceeds of the Loan should be paid to the following account of the Borrower:

[Borrower account details]

6 This Drawdown Request is irrevocable.

Yours faithfully

…………………………………

authorised signatory for

SBI Puro Shipping Company Limited

Schedule 4Mandatory Cost Formula

1 The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of compliance with (a) the requirements of the Bank of England, the Financial Conduct Authority and/ or the Prudential Regulation Authority (or, in either case, any other authority which replaces all or any of its functions), (b) the requirements of the European Central Bank or (c) the Swiss National Bank and/or the Swiss Financial Market Supervisory Authority (or, in either case, any other authority which replaces all or any of its functions).

2 On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall calculate, as a percentage rate, a rate (the "Additional Cost Rate") for each Lender, in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Agent as a weighted average of the Lenders' Additional Cost Rates (weighted in proportion to the percentage participation of each Lender in the Loan) and will be expressed as a percentage rate per annum.

3 The Additional Cost Rate for any Lender lending from a Facility Office in a Participating Member State or Switzerland will be the percentage notified by that Lender to the Agent. This percentage will be certified by that Lender in its notice to the Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender's participation in the Loan made from that Facility Office) of complying with the minimum reserve requirements of the European Central Bank or the Swiss National Bank and/or the Swiss Financial Market Supervisory Authority in respect of loans made from that Facility Office.

4 The Additional Cost Rate for any Lender lending from a Facility Office in the United Kingdom will be calculated by the Agent as follows:

E x 0.01/300 per cent per annum

Where:

E is designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Agent as being the average of the most recent rates of charge supplied by the Reference Banks to the Agent pursuant to paragraph 6 below and expressed in pounds per £1,000,000.

For the purposes of this Schedule:

(a) "Fees Rules" means the rules on periodic fees contained in the Financial Conduct Authority and Prudential Regulation Authority Fees or such other law or regulation as may be in force from time to time in respect of the payment of fees for the acceptance of deposits;

(b) "Fee Tariffs" means the fee tariffs specified in the Fees Rules under the activity group A.1 Deposit acceptors (disregarding any minimum fee or zero rated fee required pursuant to the Fees Rules but taking into account any applicable discount rate);

(c) "Participating Member State" means any member state of the European Community that adopts or has adopted the Euro as its lawful currency in accordance with legislation of the European Community relating to Economic and Monetary Union;

(d) "Tariff Base" has the meaning given to it in, and will be calculated in accordance with, the Fees Rules; and

(e) "£" means the lawful currency for the time being of Great Britain and Northern Ireland.

5 If requested by the Agent, each Reference Bank shall, as soon as practicable after publication by the Financial Conduct Authority and the Prudential Regulation Authority, supply to the Agent, the rate of charge payable by that Reference Bank to the Financial Conduct Authority and the Prudential Regulation Authority pursuant to the Fees Rules in respect of the relevant financial year of the Financial Conduct Authority and the Prudential Regulation Authority (calculated for this purpose by that Reference Bank as being the average of the Fee Tariffs applicable to that Reference Bank for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of that Reference Bank.

6 Each Lender shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate. In particular, each Lender shall supply the following information on or prior to the date on which it becomes a Lender:

(a)    the jurisdiction of its Facility Office; and

(b) any other information that the Agent may reasonably require for such purpose.

7 The rates of charge of each Reference Bank for the purpose of E above shall be determined by the Agent based upon the information supplied to it pursuant to paragraphs 5 and 6 above.

8 The Agent shall have no liability to any person if such determination results in an Additional Cost Rate which over or under compensates any Lender and shall be entitled to assume that the information provided by any Lender or Reference Bank pursuant to paragraphs 3, 5 and 6 above is true and correct in all respects.

9 The Agent shall distribute the additional amounts received as a result of the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender and each Reference Bank pursuant to paragraphs 3, 5 and 6 above.

10 Any determination by the Agent pursuant to this Schedule in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the absence of manifest error, be conclusive and binding on all Parties.

11 The Agent may from time to time, after consultation with the Borrower and the Lenders, determine and notify to all Parties any amendments which are required to be made to this Schedule in order to comply with any change in law, regulation or any requirements from time to time imposed by the Bank of England, the Financial Conduct Authority, the Prudential Regulation Authority, the European Central Bank, the Swiss National Bank and/or the Swiss Financial Market Supervisory Authority (or, in any case, any other authority which replaces all or any of its functions) and any such determination shall, in the absence of manifest error, be conclusive and binding on all Parties.

Schedule 5Form of Transfer Certificate

To:    [        ] as Agent and [ ] as Security Agent

From: [The Existing Lender] (the "Existing Lender") and [The New Lender] (the "New Lender")

Dated:

SBI Puro Shipping Company Limited – $26,000,000 Loan Agreement dated [                        ] 2015 (the "Loan Agreement")

1 We refer to the Loan Agreement. This agreement (the "Agreement") shall take effect as a Transfer Certificate for the purposes of the Loan Agreement. Terms defined in the Loan Agreement have the same meaning in this Agreement unless given a different meaning in this Agreement.

2 We refer to Clause 24.5 (Procedure for transfer) of the Loan Agreement:

(a) The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by novation and in accordance with Clause 24.5 (Procedure for transfer) all of the Existing Lender's rights and obligations under the Loan Agreement and the other Finance Documents which relate to that portion of the Existing Lender's Commitment(s) and participations in the Loan under the Loan Agreement as specified in the Schedule.

(b) The proposed Transfer Date is [            ].

(c) The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 31.2 (Addresses) are set out in the Schedule.

3 The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in Clause 24.4.1(c) (Limitation of responsibility of Existing Lenders).

4 This Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.

5 This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

6 This Agreement has been entered into on the date stated at the beginning of this Agreement.

Note: The execution of this Transfer Certificate may not transfer a proportionate share of the Existing Lender's interest in any Encumbrance created or expressed to be created or evidenced by the Security Documentsin all jurisdictions. It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect a transfer of such a share in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.

The Schedule

Commitment/rights and obligations to be transferred

[insert relevant details]

[Facility Office address, fax number and attention details for notices and account details for payments,]

[Existing Lender]    [New Lender]

By:    By:

This Agreement is accepted as a Transfer Certificate for the purposes of the Loan Agreement by the Agent and the Transfer Date is confirmed as [            ].

[Agent]

By:

[Security Agent]

By:        

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Schedule 6Form of Assignment Agreement

To: [ ] as Agent, [ ] as Security Agent and [ ] as Borrower, for and on behalf of each Security Party

From: [the Existing Lender] (the "Existing Lender") and [the New Lender] (the "New Lender")

Dated:

SBI Puro Shipping Company Limited- $26,000,000 Loan Agreement dated [                        ] 2015 (the "Loan Agreement")

1 We refer to the Loan Agreement. This is an Assignment Agreement. This agreement (the "Agreement") shall take effect as an Assignment Agreement for the purpose of the Loan Agreement. Terms defined in the Loan Agreement have the same meaning in this Agreement unless given a different meaning in this Agreement.

2 We refer to Clause 24.6 (Procedure for assignment) of the Loan Agreement:

(a) The Existing Lender assigns absolutely to the New Lender all the rights of the Existing Lender under the Loan Agreement, the other Finance Documents and in respect of any Encumbrance created or expressed to be created or evidenced by the Security Documents which correspond to that portion of the Existing Lender's Commitment(s) and participations in the Loan under the Loan Agreement as specified in the Schedule.

(b) The Existing Lender is released from all the obligations of the Existing Lender which correspond to that portion of the Existing Lender's Commitment(s) and participations in the Loan under the Loan Agreement specified in the Schedule.

(c) The New Lender becomes a Party as a Lender and is bound by obligations equivalent to those from which the Existing Lender is released under paragraph (b).

3 The proposed Transfer Date is [ ].

4 On the Transfer Date the New Lender becomes Party to the relevant Finance Documents as a Lender.

5 The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 31.2 (Addresses) are set out in the Schedule.

6 The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in Clause 24.4.3 (Limitation of responsibility of Existing Lenders).

7 This Agreement acts as notice to the Agent (on behalf of each Finance Party) and, upon delivery in accordance with Clause 24.7 (Copy of Transfer Certificate or Assignment Agreement to Borrower), to the Borrower (on behalf of each Security Party) of the assignment referred to in this Agreement.

8 This Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.

9 This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

10 This Agreement has been entered into on the date stated at the beginning of this Agreement.

LONLIVE\20885848.6    Page 19

Note: The execution of this Assignment Agreement may not transfer a proportionate share of the Existing Lender's interest in any Encumbrance created or expressed to be created or evidenced by the Security Documents in all jurisdictions. It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect a transfer of such a share in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.

LONLIVE\20885848.6    Page 20

The Schedule

Commitment/rights and obligations to be transferred by assignment, release and accession

[insert relevant details]

[Facility office address, fax number and attention details for notices and account details for payments]

[Existing Lender]    [New Lender]

By:    By:

This Agreement is accepted as an Assignment Agreement for the purposes of the Loan Agreement by the Agent and the Transfer Date is confirmed as [                    ].

Signature of this Agreement by the Agent constitutes confirmation by the Agent of receipt of notice of the assignment referred to in this Agreement, which notice the Agent receives on behalf of each Finance Party.

[Agent]

By:

[Security Agent]

By:                    

Schedule 7Form of Compliance Certificate

To:    [Agent]

From:    Scorpio Bulkers Inc.

Dated:

Dear Sirs

SBI Puro Shipping Company Limited– $26,000,000 Loan Agreement dated [                        ] 2015 (the "Agreement")

1 We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.

2 We confirm that we maintain:

(a) Cash of $[  ];

(b) Cash Equivalents of $[  ];

(c) Minimum Liquidity of $[  ], of which [  ]% consists of Cash;

(d) Consolidated Tangible Net Worth of $[  ]; and

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(e) a ratio of Net Debt to Consolidated Total Capitalization of [  ]:1.0.

3 [We confirm that no Default is continuing.]^* 

Signed:	………………………………………………
	Chief Financial Officer
	of
	Scorpio Bulkers Inc.

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Signatures

The Borrower

SBI Puro Shipping     )

Company Limited     )

)

By: /s/ Francesca Gianfranchi

Francesca Gianfranchi

Attorney-in-Fact

)

)

Address:         )

9, Boulevard Charles III    )

MC 98000 Monaco    )

Fax no.: +377 97 77 8346        )

Department Officer: General Counsel        )

The Guarantor

Scorpio Bulkers Inc.    )

)

By: /s/ Micha Withoft

Micha Withoft

Attorney-in-Fact                    )

)

)

Address:     )

9, Boulevard Charles III    )

MC 98000 Monaco    )

Fax no.: +377 97 77 8346        )

Department/Officer: General Counsel        )

The Arranger

ABN AMRO Bank N.V.    )

)

By:/s/ Ian Mace

Ian Mace

Attorney-in-Fact    )

)

Address:     )

Coolsingel 93                )

3012 AE Rotterdam            )

LONLIVE\20885848.6    Page 23

The Netherlands        )

Fax no.: +31 10 401 5323         )

Department/Officer:             )

ECT / Transportation Mid-Office        )

Email:                    )

magda.braam-heijnen@nl.abnamro.com,    )

alper.sanliunal@nl.abnamro.com,        )

martijn.m.van.den.berg@nl.abnamro.com    )

and                    )

tom.van.vonderen@nl.abnamro.com    )

The Agent

ABN AMRO Bank N.V.    )

)

By:/s/ Ian Mace

Ian Mace

Attorney-in-Fact    )

)

Address: )

Coolsingel 93 )

3012 AE Rotterdam )

The Netherlands    )

Fax no.: +31 10 401 5323         )

Department/Officer:             )

ECT / Transportation Mid-Office        )

Email:                    )

magda.braam-heijnen@nl.abnamro.com,    )

alper.sanliunal@nl.abnamro.com,        )

martijn.m.van.den.berg@nl.abnamro.com    )

and                    )

tom.van.vonderen@nl.abnamro.com    )

LONLIVE\20885848.6    Page 24

The Security Agent

ABN AMRO Bank N.V.    )

)

By:/s/ Ian Mace

Ian Mace

Attorney-in-Fact    )

)

Address:     )

Coolsingel 93                )

3012 AE Rotterdam            )

The Netherlands        )

Fax no.: +31 10 401 5323         )

Department/Officer:             )

ECT / Transportation Mid-Office        )

Email:                    )

magda.braam-heijnen@nl.abnamro.com,    )

alper.sanliunal@nl.abnamro.com,        )

martijn.m.van.den.berg@nl.abnamro.com    )

and                    )

tom.van.vonderen@nl.abnamro.com    )

The Original Lender

ABN AMRO Bank N.V.    )

)

By:/s/ Ian Mace

Ian Mace

Attorney-in-Fact    )

The Swap Provider

ABN AMRO Bank N.V.    )

)

By:/s/ Ian Mace

Ian Mace

Attorney-in-Fact    )

)

Address:     )

Coolsingel 93                )

3012 AE Rotterdam            )

LONLIVE\20885848.6    Page 25

The Netherlands        )

Fax no.: +31 10 401 5323         )

Department/Officer:             )

ECT / Transportation Mid-Office        )

Email:                    )

magda.braam-heijnen@nl.abnamro.com,    )

alper.sanliunal@nl.abnamro.com,        )

martijn.m.van.den.berg@nl.abnamro.com    )

and                    )

tom.van.vonderen@nl.abnamro.com    )

LONLIVE\20885848.6    Page 26

EX-4.31

Exhibit - 4.31

Execution version

$19,800,000 Secured Loan Agreement

Dated March 2, 2015

(1) SBI Merengue Shipping Company Limited    (as Borrower)

(2) Scorpio Bulkers Inc.
(as Guarantor)

(3) The Financial Institutions
listed in Schedule 1
(as Original Lenders)

(4) ABN AMRO Bank N.V.
(as Arranger)

(5) ABN AMRO Bank N.V.
(as Agent)

(6) ABN AMRO Bank N.V.
(as Swap Provider)

(7) ABN AMRO Bank N.V.
(as Security Agent)

(8) ABN AMRO Bank N.V., Singapore Branch
(as Sinosure Agent)

LONLIVE\20319920.10

1313\1313\01-53-03754

Contents

Page

Section 1Interpretation2

1Definitions and Interpretation        2

Section 2The Loan        22

2The Loan        22

3Purpose        22

4Conditions of Utilisation        22

Section 3Utilisation        24

5Advance        24

Section 4Repayment, Prepayment and Cancellation    26

6Repayment        26

7Illegality, Prepayment and Cancellation        26

Section 5Costs of Utilisation        30

8Interest        30

9Interest Periods        30

10Changes to the Calculation of Interest        31

11Fees        32

Section 6Additional Payment Obligations        34

12Tax Gross Up and Indemnities        34

13Increased Costs        38

14Other Indemnities        40

15Mitigation by the Lenders        42

16Costs and Expenses        43

Section 7Security and Application of Moneys        45

17Security Documents and Application of Moneys    45

18Guarantee and Indemnity        50

Section 8Representations, Undertakings and Events of Default    54

19Representations        54

20Information Undertakings        59

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21Financial Covenants        62

22General Undertakings        65

23Events of Default        73

Section 9Changes to Parties        80

24Changes to the Lenders        80

25Changes to the Security Parties        85

Section 10The Finance Parties        86

26Role of the Agent, the Security Agent, the Sinosure Agent and the Arranger    86

27Conduct of Business by the Finance Parties    99

28Sharing among the Finance Parties        99

29Sinosure        100

Section 11Administration        104

30Payment Mechanics        104

31Set-Off        108

32Notices        108

33Calculations and Certificates        110

34Partial Invalidity        111

35Remedies and Waivers        111

36Amendments and Waivers        111

37Confidentiality        114

38Disclosure of Lender Details by Agent        118

39Counterparts        120

Section 12Governing Law and Enforcement        121

40Governing Law        121

41Enforcement        121

42Patriot Act Notice        122

Schedule 1The Original Lenders        123

Schedule 2Part I Conditions Precedent        124

Part II Conditions Subsequent129

Schedule 3Drawdown Request        130

Schedule 4Mandatory Cost Formula131

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Schedule 5Form of Transfer Certificate        134

Schedule 6Form of Assignment Agreement        137

Schedule 7Form of Compliance Certificate        140

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Loan Agreement

Dated                                      2015

Between:

(1) SBI Merengue Shipping Company Limited, a company incorporated under the laws of the Republic of the Marshall Islands, with registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960 (the"Borrower"); and

(2) Scorpio Bulkers Inc., a company incorporated under the laws of the Republic of the Marshall Islands, with registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960 (the"Guarantor"); and

(3) The Financial Institutions listed in Schedule 1 (The Original Lenders), each acting through its Facility Office (together the "Original Lenders" and each an "Original Lender"); and

(4) ABN AMRO Bank N.V., acting as arranger through its office at Coolsingel 93, 3012 AE Rotterdam, The Netherlands (in that capacity, the "Arranger"); and

(5) ABN AMRO Bank N.V., acting as agent through its office at Daalsesingel 71, 3511 SW Utrecht, The Netherlands (in that capacity, the "Agent"); and

(6) ABN AMRO Bank N.V., acting as swap provider through its office at Coolsingel 93, 3012 AE Rotterdam, The Netherlands (in that capacity, the "Swap Provider"); and

(7) ABN AMRO Bank N.V., acting as security agent through its office at Coolsingel 93, 3012 AE Rotterdam, The Netherlands (in that capacity, the "Security Agent"); and

(8) ABN AMRO Bank N.V., Singapore Branch, acting as Sinosure agent through its office at One Raffles Quay, South Tower, #26, Singapore 048583 (in that capacity, the "Sinosure Agent").

Preliminary

(A) The Borrower has agreed to purchase the Vessel from the Seller on the terms of the MOA and intends to register the Vessel under the flag of the Republic of the Marshall Islands.

(B) Each of the Original Lenders has agreed to advance to the Borrower its Commitment aggregating, with all the other Commitments, up to $19,800,000 to assist the Borrower to finance part of the purchase price of the Vessel.

(C) Sinosure has agreed to provide a buyer's credit insurance policy covering up to 90% of the political and commercial risks associate with the Loan.

It is agreed as follows:

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Section 1 Interpretation

1 Definitions and Interpretation

1.1 Definitions In this Agreement:

"Acceptable Bank" means a bank or financial institution which has a rating for its long-term unsecured and non-credit-enhanced debt obligations of BBB- or higher by Standard & Poor's Rating Services or Fitch Ratings Ltd or Baa3 or higher by Moody's Investors Service Limited or a comparable rating from an internationally recognised credit rating agency.

"Account" means the bank account to be opened in the name of the Borrower with the Account Bank and designated as the "Account".

"Account Bank" means ABN AMRO Bank N.V., acting through its branch at Coolsingel 93, 3012 AE Rotterdam, The Netherlands or any other bank or financial institution which at any time, with the Security Agent's prior written consent, holds the Account.

"Account Security Deed" means the account security deed referred to in Clause 17.1.4 (Security Documents).

"Administration" has the meaning given to it in paragraph 1.1.3 of the ISM Code.

"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 provided that in respect of the Guarantor only an Affiliate of the Guarantor shall only include (i) any Subsidiary of the Guarantor or (ii) any Holding Company of the Guarantor that either (a) directly or indirectly owns more than 20% of any class of the capital stock of the Guarantor or (b) has possession, directly or indirectly, of the power to vote more than 20% of the voting stock of the Guarantor.

"Annex VI" means Annex VI (Regulations for the Prevention of Air Pollution from Ships) to the International Convention for the Prevention of Pollution from Ships 1973 (as modified in 1978 and 1997).

"Approved Pooling Arrangement" means, in relation to the Vessel, the Scorpio Kamsarmax Pool and any other pooling arrangement:

(a) proposed by the Borrower;

(a) run by any Affiliate of the Commercial Manager; and

(b) approved in writing by the Agent prior to that Vessel's entry into such pooling arrangement.

"Approved Sub-manager" means Zenith Ship Management, Astor Shipmanagement, Synergy Marine, C.P. Offen, Optimum Ship Services Ltd and any Affiliates or Subsidiary of the Technical Manager and the Commercial Manager.

"Approved Shipbroker" means each of Arrow Sale and Purchase Limited, Braemar Seascope Limited, Clarkson PLC, Astrup Fearnleys AS, Howe Robinson, Maersk Brokers, Galbraith's Ltd. and Affinity Shipping LLP.

"Assignments" means all the forms of assignment referred to in Clause 17.1.2 (Security Documents).

"Assignment Agreement" means an agreement substantially in the form set out in Schedule 6 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and assignee.

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

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

(a) the date that is three months after the Delivery Date; and

(b) 31 December 2016.

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

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

exceeds:

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

"Builder" means Tsuneishi Group (Zhoushan) Shipbuilding Inc., a company incorporated under the laws of the People's Republic of China with its registered office at Retiao Village, Xiushan Island, Daishan County, Zhoushan City, Zhejuang Province, the People's Republic of China.

"Building Contract" means the contract dated 4 July 2013 in favour of the Seller on the terms and subject to the conditions of which the Builder has agreed to construct the Vessel for, and deliver the Vessel to, the Seller.

"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in London, New York, Amsterdam and Singapore.

"Capitalized Lease" means, as applied to any person, any lease of any property (whether real, personal or mixed) of which the discounted present value of the rental obligations of such person, as lessee, in conformity with US GAAP, is required to be capitalized on the balance sheet of such person and "Capitalized Lease Obligation" is defined to mean the rental obligations, as aforesaid, under a Capitalized Lease.

"Charged Property" means all of the assets of the Security Parties which from time to time are, or are expressed to be, the subject of the Security Documents.

"Charter" means any charter or contract of employment in respect of the Vessel that, inclusive of options, is capable of exceeding 12 months in duration, but excluding:

^(a)  any charter pursuant to an Approved Pooling Arrangement; and

^(b)  any other charter or contract of employment in respect of the Vessel that the Borrower enters into with a company within the Group.

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

"Commercial Manager" means Scorpio Commercial Management S.A.M., a company incorporated under the laws of Monaco with its registered office at Le Millenium, 9, Boulevard Charles III, MC-98000 Monaco.

"Commitment" means:

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

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

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

"Commitment Fee" means the commitment fee to be paid by the Borrower to the Agent under Clause 11.1 (Commitment Fee).

"Compliance Certificate" means a certificate substantially in the form set out in Schedule 7 (Form of Compliance Certificate).

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

(a) any Security Party or any of its advisers; or

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

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

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

(i) is identified in writing at the time of delivery as non-confidential by any Security Party or any of its advisers; or

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

"Confidentiality Undertaking" means a confidentiality undertaking substantially in a recommended form of the Loan Market Association at the relevant time.

"Confirmation" means a Confirmation exchanged or deemed to be exchanged between the Swap Provider and the Borrower as contemplated by the Master Agreement.

"Contract Price" means $33,000,000.

"Credit Support Document" means any document described as such in the Master Agreement and any other document referred to in any such document which has the effect of creating security in favour of any of the Finance Parties.

"Credit Support Provider" means any person (other than the Borrower) described as such in the Master Agreement.

"CTA" means the Corporation Tax Act 2009.

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"Default" means an Event of Default or any event or circumstance 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.

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

"Delivery Date" means the date of actual delivery of the Vessel to the Borrower by the Seller under the MOA.

"Disruption Event" means either or both of:

(a) a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the 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

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

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

(ii) from communicating with other Parties in accordance with the terms of the Finance Documents,

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

"DOC" means, in relation to the ISM Company, a valid Document of Compliance issued for the ISM Company by the Administration under paragraph 13.2 of the ISM Code.

"Drawdown Date" means the date on which the Loan is advanced under Clause 5 (Advance).

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

"Earnings" means all hires, freights, pool income and other sums payable to or for the account of the Borrower in respect of the Vessel including (without limitation) all remuneration for salvage and towage services, demurrage and detention moneys, contributions in general average, compensation in respect of any requisition for hire, and damages and other payments (whether awarded by any court or arbitral tribunal or by agreement or otherwise) for breach, termination or variation of any contract for the operation, employment or use of the Vessel.

"Encumbrance" means a mortgage, charge, assignment, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

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

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

"Environmental Incident" means:

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

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

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

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

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

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and any successor thereto.

"ERISA Affiliate" means each person (and defined in Section 3(9) of ERISA) which together with the Borrower or the Guarantor would be deemed to be a "single employer" within the meaning of Section 414(b), (c), (m) or (o) of the Uniform Commercial Code (as from time to time in effect in any applicable jurisdiction).

"Event of Default" means any event or circumstance specified as such in Clause 23 (Events of Default).

"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.

"Facility Period" means the period beginning on the date of this Agreement and ending on the date when the whole of the Indebtedness has been paid in full and the Security Parties have ceased to be under any further actual or contingent liability to the Finance Parties under or in connection with the Finance Documents.

"FATCA" means:

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

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

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(c) 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 governmental or taxation authority in any other jurisdiction.

"FATCA Application Date" means:

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

(b) in relation to a "withholdable payment" described in section 1473(1)(A)(ii) of the Code (which relates to "gross proceeds" from the disposition of property of a type that can produce interest from sources within the US), 1 January 2017; or

(c) in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within (a) or (b), 1 January 2017,

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

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

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

"Fee Letter" means any letter or letters dated on or about the date of this Agreement between the Arranger, the Borrower and the Guarantor (or the Agent, the Borrower and the Guarantor or the Security Agent, the Borrower and the Guarantor) setting out any of the fees referred to in Clause 11 (Fees).

"Finance Documents" means this Agreement, the Master Agreement, the Security Documents, the Fee Letter and any other document designated as such by the Agent and the Borrower and "Finance Document" means any one of them.

"Finance Parties" means the Arranger, the Agent, the Security Agent, the Swap Provider, the Lenders and the Sinosure Agent and "Finance Party" means any one of them.

"Financial Indebtedness" means, with respect to any person (the "Debtor") at any date of determination (without duplication):

(a) all obligations of the Debtor for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the Debtor;

(b) all obligations of the Debtor evidenced by bonds, debentures, notes or other similar instruments;

(c) all obligations of the Debtor in respect of any acceptance credit, guarantee or letter of credit facility or equivalent made available to the Debtor (including reimbursement obligations with respect thereto);

(d) all obligations of the Debtor to pay the deferred purchase price of property or services, which purchase price is due more than six months after the date of placing such property in service or taking delivery thereto or the completion of such services, except trade payables;

(e) all Capitalized Lease Obligations of the Debtor as lessee;

(f) all such Financial Indebtedness as described in sub paragraphs (a) to (e) of persons other than the Debtor secured by an Encumbrance on any asset of the Debtor, whether or not such Financial

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Indebtedness is assumed by the Debtor, provided that the amount of such Financial Indebtedness shall be the lesser of (i) the fair market value of such asset at such date of determination and (ii) the amount of such Financial Indebtedness; and

(g) all such Financial Indebtedness as described in sub-paragraphs (a) to (e) of persons other than the Debtor under any guarantee, indemnity to similar obligation entered into by the Debtor to the extent such Financial Indebtedness is guaranteed, indemnified, etc. by the Debtor.

The amount of Financial Indebtedness of any Debtor at any date shall be the outstanding balance at such date of all unconditional obligations as described above and, with respect to contingent obligations described in (f) and (g) above, the maximum liability upon the occurrence of the contingency giving rise to the obligation, provided that (i) the amount outstanding at any time of any Financial Indebtedness issued with an original issue discount is the face amount of such Financial Indebtedness less the remaining unamortized portion of such original issue discount of such Financial Indebtedness at such time, and (ii) Financial Indebtedness shall not include any liability for taxes.

"FMV" means the fair market value of the Vessel as conclusively determined by the arithmetic average of valuations issued by two Approved Shipbrokers on the basis of a charter-free sale for prompt delivery for cash at arm's length on normal commercial terms as between a willing seller and a willing buyer.

"Group"means the Guarantor and its Subsidiaries.

"Guarantee" means the guarantee and indemnity of the Guarantor contained in Clause 18 (Guarantee and Indemnity) and referred to in Clause 17.1.3 (Security Documents).

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

"IAPPC" means a valid international air pollution prevention certificate for the Vessel issued under Annex VI.

"Impaired Agent" means the Agent at any time when:

(a) it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment;

(b) the Agent otherwise rescinds or repudiates a Finance Document; or

(c) an Insolvency Event has occurred and is continuing with respect to the Agent;

unless, in the case of (a):

(i) its failure to pay is caused by:

(A)    administrative or technical error; or

(B)    a Disruption Event; and

payment is made within three Business Days of its due date; or

(ii) the Agent is disputing in good faith whether it is contractually obliged to make the payment in question.

"Indebtedness" means the aggregate from time to time of: the amount of the Loan outstanding; all accrued and unpaid interest on the Loan; and all other sums of any nature (together with all accrued and unpaid interest on any of those sums) payable to any of the Finance Parties under all or any of the Finance Documents.

"Insolvency Event" in relation to an entity means that the entity:

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(a) is dissolved (other than pursuant to a consolidation, amalgamation or merger);

(b) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due;

(c) makes a general assignment, arrangement or composition with or for the benefit of its creditors;

(d) institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation by it or such regulator, supervisor or similar official;

(e) has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not described in (d) and:

(i) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation; or

(ii) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof;

(f) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger);

(g) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets (other than, for so long as it is required by law or regulation not to be publicly disclosed, any such appointment which is to be made, or is made, by a person or entity described in (d));

(h) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter;

(i) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in (a) to (h); or

takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.

"Insurances" means all policies and contracts of insurance (including all entries in protection and indemnity or war risks associations) which are from time to time taken out or entered into in respect of or in connection with the Vessel or her increased value or the Earnings and (where the context permits) all benefits under such contracts and policies, including all claims of any nature and returns of premium.

"Intercompany Loan Agreement" means any loan agreement entered into during the Facility Period between an entity within the same group as the Borrower as lender and the Borrower as borrower.

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"IntercompanyLoanAssignment" means any assignment of an Intercompany Loan Agreement entered into pursuant to Clause 22.18 (No borrowings) and referred to in Clause 17.1.7 (Security Documents) and to be in a form acceptable to the Agent.

"Intercompany Loans" means any loan or loans to be made available to the Borrower pursuant to an Intercompany Loan Agreement.

"Intercompany Subordination and Assignment Agreement" means any subordination and assignment agreement in respect of any Intercompany Loans entered into pursuant to Clause 22.18 (No borrowings) and referred to in Clause 17.1.8 (Security Documents) and to be in a form acceptable to the Agent.

"Interest Payment Date" means each date for the payment of interest in accordance with Clause 8.2 (Payment of interest).

"Interest Period" means 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).

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

"ISM Company" means, at any given time, the company responsible for the Vessel's compliance with the ISM Code under paragraph 1.1.2 of the ISM Code.

"ISPS Code" means the International Ship and Port Facility Security Code.

"ISSC" means a valid international ship security certificate for the Vessel issued under the ISPS Code.

"ITA" means the Income Tax Act 2007.

"Joint Venture" means any joint venture entity, whether a company, unincorporated firm, undertaking, association, joint venture or partnership or any other entity.

"Legal Opinion" means any legal opinion delivered to the Agent under Clause 4.1 (Initial conditions precedent) or Clause 4.3 (Conditions subsequent).

"Legal Reservations" means:

(a) 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;

(b) 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;

(c) 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 general application in the Legal Opinions.

"Lender" means:

(a) any Original Lender; and

(b) any bank, financial institution or other entity which has become a Party as a Lender in accordance with Clause 24 (Changes to the Lenders),

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

"LIBOR" means:

(a) the applicable Screen Rate; or

(b) (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,

as of 11.00 a.m. (London time) on the Quotation Day for the offering of deposits in dollars in an amount comparable to the Loan (or any relevant part of the Loan) and for a period comparable to the relevant Interest Period and, if that rate is less than zero, LIBOR shall be deemed to be zero.

"Loan" means the aggregate amount advanced or to be advanced by the Lenders to the Borrower under Clause 2 (The Loan) or, where the context permits, the principal amount advanced and for the time being outstanding.

"Majority Lenders" means a Lender or Lenders whose Commitments aggregate more than 66²/₃% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 66²/₃% of the Total Commitments immediately prior to the reduction).

"Management Agreement" means the master agreement dated 27 September 2013 entered into between Scorpio Bulkers Inc., the Technical Manager and the Commercial Manager:

(a) as acceded to in respect of the commercial management of the Vessel pursuant to a confirmation letter dated 17 September 2014 between the Borrower, Scorpio Bulkers Inc. and the Commercial Manager; and

(b) as acceded to in respect of the technical management of the Vessel pursuant to a confirmation letter dated 18 July 2014 between the Borrower, Scorpio Bulkers Inc. and the Technical Manager.

"Managers" means:

(a) in relation to the commercial management of the Vessel, the Commercial Manager; and

(b) in relation to the technical management of the Vessel, the Technical Manager,

or any Approved Sub-manager, and such other commercial and/or technical managers of the Vessel nominated by the Borrower as the Agent (acting on the instructions of the Majority Lenders) may approve.

"Managers' Undertakings" means the written undertakings of the Managers whereby, throughout the Facility Period unless otherwise agreed by the Agent:

(a) they will remain the commercial or technical managers of the Vessel (as the case may be);

(b) they will not, without the prior written consent of the Agent, subcontract or delegate the commercial or technical management of the Vessel (as the case may be) to any third party other than an Approved Sub-manager provided that the Borrower shall procure from such Approved Sub-manager a Manager's Undertaking;

(c) if reasonably required by the Agent, the interests of the Managers in the Insurances will be assigned to the Security Agent with first priority; and

(d) (following the occurrence of an Event of Default) all claims of the Managers against the Borrower shall be subordinated to the claims of the Finance Parties under the Finance Documents.

"Mandatory Cost" means the percentage rate per annum calculated by the Agent in accordance with Schedule 4 (Mandatory Cost Formula).

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"Margin" means 2.50% per annum.

"Master Agreement" means any ISDA Master Agreement (or any other form of master agreement relating to interest or currency exchange transactions) entered into between the Swap Provider and the Borrower during the Facility Period, including each Schedule to any Master Agreement and each Confirmation exchanged under any Master Agreement.

"Master Agreement Proceeds" means any and all sums due and payable to the Borrower under the Master Agreement following an Early Termination Date (subject always to all rights of netting and set-off contained in the Master Agreement) and all rights to require and enforce the payment of those sums.

"Master Agreement Proceeds Assignment" means the deed of assignment referred to in Clause 17.1.6 (Security Documents).

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

(a) the business, property or financial condition of the Borrower or the Guarantor; or

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

(c) the validity or enforceability of, or the effectiveness or ranking of any Encumbrance granted or purporting to be granted pursuant to any of, the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents; or

(d) the rights or remedies of any Finance Party under any of the Finance Documents.

"Maximum Loan Amount" means the lesser of:

(a) $19,800,000;

(b) 60% of the Contract Price; and

(c) 60% of the FMV of the Vessel evidenced by the valuation received by the Agent under Clause 4.1 (Initial conditions precedent).

"MOA"means the memorandum of agreement dated 4 October 2014 as novated in favour of the Borrower on the terms and subject to the conditions of which the Seller will sell the Vessel to the Borrower for the Contract Price.

"Mortgage" means the first preferred mortgage referred to in Clause 17.1.1 (Security Documents).

"New Lender" has the meaning given to that term in Clause 24.1 (Assignments and transfers by the Lenders).

"Non-Consenting Lender" has the meaning given to that term in Clause 36.3.4 (Replacement of Lender).

"Operating Expenses" means expenses reasonably incurred by the Borrower in connection with the ownership of the Vessel including but not limited to operation, employment, maintenance, repair and insurance of the Vessel.

"Original Financial Statements" means the audited consolidated financial statements of the Guarantor for the financial year ended 31 December 2013.

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

"Party" means a party to this Agreement.

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"Patriot Act" means the United States Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Improvement and Reauthorization Act of 2005 (H.R. 3199).

"Permitted Disposal" means any sale, lease, licence, transfer or other disposal which is on arm's length terms:

(a) of assets in exchange for other assets comparable or superior as to type, value and quality;

(b) of obsolete or redundant vehicles, plant and equipment for cash; and

(c) arising as a result of any Permitted Encumbrance.

"Permitted Encumbrance" means:

(a) any Encumbrance which has the prior written approval of the Agent;

(b) any Encumbrance created pursuant a Finance Document;

(c) any Encumbrance arising by operation of law and in the ordinary course of trading and not as a result of any default or omission by a Security Party;

(d) any Quasi-Security arising as a result of a disposal which is a Permitted Disposal; or

(e) any liens for current crews' wages and salvage and liens incurred in the ordinary course of trading the Vessel up to an aggregate amount at any time not exceeding $1,000,000.

"Plan" means any "employee benefit plan" as defined in Section 3(3) of ERISA that is subject to Title IV of ERISA which is or was sponsored, maintained or contributed to by, or required to be contributed to by any Security Party or any of their respective ERISA Affiliates.

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

"Quasi-Security" has the meaning given to that term in Clause 22.10 (Negative pledge).

"Quotation Day" means, in relation to any period for which an interest rate is to be determined three 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).

"Receiver" means a receiver or receiver and manager or administrative receiver of the whole or any part of the Charged Property.

"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 Banks could borrow funds in the London interbank market in dollars and for the relevant period, were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in dollars and for that period.

"Reference Banks" means, in relation to LIBOR and Mandatory Cost, the principal London offices of ABN AMRO Bank N.V., ING Bank N.V. and Credit Agricole Corporate and Investment Bank or such other banks as may be appointed by the Borrower with the prior written approval of the Agent.

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

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"Relevant Documents" means the Finance Documents, the MOA, the Management Agreement, the Manager's Undertakings, any Intercompany Loan Agreement and the Sinosure Policy.

"Relevant Interbank Market" means the London interbank market.

"Relevant Jurisdiction" means, in relation to a Security Party:

(a) its Original Jurisdiction;

(b) any jurisdiction where any asset subject to or intended to be subject to a Security Document to be executed by it is situated; and

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

"Repayment Date" means the date for payment of any Repayment Instalment in accordance with Clause 6 (Repayment).

"Repayment Instalment" means any instalment of the Loan to be repaid by the Borrower under Clause 6 (Repayment).

"Repeating Representations" means each of the representations set out in Clause 19.1.1 (Status) to Clause 19.1.6 (Governing law and enforcement), Clause 19.1.10 (No default) to Clause 19.1.19 (Pari passu ranking) and Clause 19.1.26 (Patriot Act).

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

"Requisition Compensation" means all compensation or other money which may from time to time be payable to the Borrower as a result of the Vessel being requisitioned for title or in any other way compulsorily acquired (other than by way of requisition for hire).

"Restricted Person" means a person that is (i) listed on, or owned or controlled by a person listed on any Sanctions List; (ii) located in, incorporated under the laws of, or owned or controlled by, or acting on behalf of, a person located in or organised under the laws of a country or territory that is the target of country-wide Sanctions (including, without limitation, at the date of this agreement Cuba, Iran, Myanmar (Burma), North Korea, Syria and Sudan); or (iii) otherwise a target of Sanctions.

"Sanctions" means any economic sanctions laws, regulations, embargoes or restrictive measures administered, enacted or enforced by: (i) the United States government; (ii) the United Nations; (iii) the European Union or its Member States, including without limitation, the United Kingdom; (iv) any country to which any Security Party or any other member of the Group or any Affiliate of any of them is bound; or (v) 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", and together the "Sanctions Authorities").

"Sanctions List" means the “Specially Designated Nationals and Blocked Persons” list issued by OFAC, the Consolidated List of Financial Sanctions Targets and Investment Ban List issued by HMT, or any similar list issued or maintained or made public by any of the Sanctions Authorities.

"Scorpio Kamsarmax Pool" means, in relation to the Vessel, a pooling arrangement whereby the pool is managed by the Commercial Manager.

"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 the relevant currency and 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

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rate from time to time in place of Reuters. If such page or the service ceases to be available, the Agent may specify another page or service displaying the relevant rate after consultation with the Borrower.

"Secured Parties" means each Finance Party from time to time party to this Agreement and any Receiver or Delegate.

"Security Documents" means the Mortgage, the Assignments, the Guarantee, the Account Security Deed, the Share Pledge, the Master Agreement Proceeds Assignment, any Intercompany Loan Assignment, any Intercompany Subordination and Assignment Agreement and any other Credit Support Documents or (where the context permits) any one or more of them, and any other agreement or document which may at any time be executed by any person as security for the payment of all or any part of the Indebtedness and "Security Document" means any one of them.

"Security Parties" means the Borrower, the Guarantor, any other Credit Support Provider, and any other person who may at any time during the Facility Period be liable for, or provide security for, all or any part of the Indebtedness (excluding always the Managers), and "Security Party" means any one of them.

"Seller"means Wisdom Marine Lines S.A., a company incorporated under the laws of Panama with its registered office at MMG Tower 16^th Floor, 53^rd E. Street, Urbanizacion, Marbella, Panama City, Panama.

"Share Pledge" means the charge or charges of the issued share capital of the Borrower referred to in Clause 17.1.5 (Security Documents).

"Sinosure" means China Export & Credit Insurance Corporation, a corporation organised and existing under the laws of The People's Republic of China and having its principle place of business at 2 Fortune Times Building, No. 11 Fenghuiyuan, Xicheng District, Beijing 100032, The People's Republic of China.

"Sinosure Insurance Premium" means the premium payable to Sinosure in respect of the Sinosure Policy in accordance with Clause 11 (Fees).

"Sinosure Insurance Proceeds" means all sums payable by Sinosure to or for the account of the Lenders or the Sinosure Agent on behalf of the Lenders under or in connection with the Sinosure Policy.

"Sinosure Policy" means the buyer's export credit insurance policy issued or to be issued by Sinosure in respect of the Vessel and providing in the aggregate political and commercial cover for 90% of the Loan outstanding from time to time and accrued interest thereunder, in form and substance satisfactory to the Lenders.

"SMC" means a valid safety management certificate issued for the Vessel by or on behalf of the Administration under paragraph 13.7 of the ISM Code.

"Subsidiary" means a subsidiary undertaking within the meaning of section 1162 of the Companies Act 2006.

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

"Technical Manager" means Scorpio Ship Management S.A.M., a company incorporated under the laws of Monaco with its registered office at Le Millenium, 9, Boulevard Charles III, MC-98000 Monaco.

"Termination Date" means the date falling ten years after the Delivery Date.

"Total Commitments" means the aggregate of the Commitments.

"TotalLoss" means:

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

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

(c) the capture, seizure, arrest, detention, hijacking, theft, condemnation as prize, confiscation or forfeiture of the Vessel (not falling within (b)), unless the Vessel is released and returned to the possession of the Borrowerwithin 30 days after the capture, seizure, arrest, detention, hijacking, theft, condemnation as prize, confiscation or forfeiture in question.

"Transaction" means a transaction entered into between the Swap Provider and the Borrower governed by the Master Agreement.

"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:

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

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

"Treasury Transactions" means any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price.

"Trust Property" means:

(a) all benefits derived by the Security Agent from Clause 17 (Security and Application of Moneys); and

(b) all benefits arising under (including, without limitation, all proceeds of the enforcement of) each of the Security Documents,

with the exception of any benefits arising solely for the benefit of the Security Agent.

"Unpaid Sum" means any sum due and payable but unpaid by any Security Party under the Finance Documents.

"US" means the United States of America.

"US GAAP" means generally accepted accounting principles in the United States of America as in effect from time to time.

"US Tax Obligor" means:

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

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

"VAT" means:

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

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

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"Vessel" means the kamsarmax bulk carrier and everything now or in the future belonging to her on board and ashore, currently under construction by the Builder with the Builder's hull number SS179 on the terms of the Building Contract and, on delivery to the Seller intended to be sold by the Seller to the Borrower on the terms of the MOA, and intended to be registered under the flag of the Republic of the Marshall Islands.

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

1.2.1 any "Lender", the "Borrower", the "Guarantor",the "Arranger", the "Agent", the "Swap Provider", any "Secured Party", the "Security Agent", any "Finance Party", the "Sinosure Agent", "Sinosure" or any "Party" shall be construed so as to include its successors in title, permitted assignees and permitted transferees;

1.2.2 "assets" includes present and future properties, revenues and rights of every description;

1.2.3 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;

1.2.4 a "group of Lenders" includes all the Lenders;

1.2.5 "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;

1.2.6 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);

1.2.7 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;

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

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

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

1.4 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.

1.5 Default A Default is "continuing" if it has not been remedied or waived.

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

1.7 Third party rights

1.7.1 Subject to Clause 1.7.2, 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.

1.7.2 Sinosure may enforce or enjoy the benefit of any term of this Agreement under the Third Parties Act.

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

Section 2 The Loan

2 The Loan

2.1 Amount Subject to the terms of this Agreement, the Lenders agree to make available to the Borrower a term loan not exceeding the Maximum Loan Amount.

2.2 Finance Parties' rights and obligations

2.2.1 The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

2.2.2 The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from a Security Party shall be a separate and independent debt.

2.2.3 A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.

3 Purpose

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

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

4 Conditions of Utilisation

4.1 Initialconditions precedent

4.1.1 The Lenders will only be obliged to comply with Clause 5.3 (Lenders' participation) in relation to the advance of the Loan if on or before the Drawdown Date, the Agent has received all of the documents and other evidence listed in Part I of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Agent and the proposed Drawdown Date coincides with the Delivery Date. The Agent shall notify the Borrower and the Lenders promptly upon being so satisfied.

The Agent shall not be obliged to give such notification unless it has received confirmation from the Sinosure Agent that Sinosure has received all of the documents and evidence listed in paragraph 4(d) (Other documents) of Part I of Schedule 2 (Conditions Precedent) in form and substance satisfactory to Sinosure.

4.1.2 Other than to the extent that the Majority Lenders notify the Agent in writing to the contrary before the Agent gives the notification described in Clause 4.1.1, the Lenders authorise (but do not require) the Agent to give that notification. The Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.

4.2 Further conditions precedent

4.2.1 The Lenders will only be obliged to advance the Loan if on the date of the Drawdown Request and on the proposed Drawdown Date:

(a) no Default has occurred and is continuing or would result from the advance of the Loan; and

(b) the representations made by the Borrower and the Guarantor under Clause 19 (Representations) are true.

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4.3 Conditions subsequent The Borrower undertakes to deliver or to cause to be delivered to the Agent within seven days after the Drawdown Date the additional documents and other evidence listed in Part II of Schedule 2 (Conditions Subsequent).

4.4 No waiver If the Lenders in their sole discretion agree to advance all or any part of the Loan to the Borrower before all of the documents and evidence required by Clause 4.1 (Initial conditions precedent) have been delivered to or to the order of the Agent, the Borrower undertakes to deliver all outstanding documents and evidence to or to the order of the Agent no later than seven days after the Drawdown Date or such other date specified by the Agent (acting on the instructions of all the Lenders).

The advance of all or any part of the Loan under this Clause 4.4 shall not be taken as a waiver of the Lenders' right to require production of all the documents and evidence required by Clause 4.1 (Initial conditions precedent).

4.5 Form and content All documents and evidence delivered to the Agent under this Clause shall:

4.5.1 be in form and substance acceptable to the Agent; and

4.5.2 if required by the Agent, be certified, notarised, legalised or attested in a manner acceptable to the Agent.

Section 3 Utilisation

5 Advance

5.1 Delivery of a Drawdown Request The Borrower may request the Loan to be advanced, in a single advance, by delivery to the Agent of a duly completed Drawdown Request not more than ten and not fewer than four Business Days before the proposed Drawdown Date. Any Drawdown Request which becomes effective, in accordance with Clause 32.3, after 10.00 a.m. (Amsterdam time) in the place of receipt shall be deemed only to become effective on the following day. The Borrower may request that part of the Loan be advanced to the Seller and part of the Loan be advanced to the Builder in accordance with the MOA which shall be advanced on the same Business Day.

5.2 Completion of a Drawdown Request A Drawdown Request is irrevocable and will not be regarded as having been duly completed unless:

5.2.1 it is signed by an authorised signatory of the Borrower;

5.2.2 the proposed Drawdown Date is a Business Day within the Availability Period; and

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

5.3 Lenders' participation

5.3.3 Subject to Clauses 2 (The Loan), 3 (Purpose) and 4 (Conditions of Utilisation), each Lender shall make its participation in the Loan available by the Drawdown Date through its Facility Office.

5.3.4 The amount of each Lender's participation in the Loan will be equal to the proportion borne by its Commitment to the Total Commitments.

5.4 Cancellation of Commitment The Commitment shall be cancelled on the earlier of (i) the Drawdown Date and (ii) the end of the Availability Period, to the extent that it is unutilised at that time.

5.5 Notice to Sinosure The Sinosure Agent shall provide Sinosure with a written notice of the disbursement of the Loan within ten days after the Drawdown Date.

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5.6 Termination of Lenders' obligations

5.6.1 Notwithstanding anything contained in the Finance Documents, the obligations of the Lenders to make the Loan available shall terminate in the event that any of the following events take place:

(a) the Sinosure Policy is cancelled, terminated, rescinded, repudiated or suspended or becomes invalid, illegal or invalid or otherwise ceases to remain in full force or does not constitute legal, valid, binding and enforceable obligations of any party thereto; or

(b) if it becomes unlawful or impossible for Sinosure to discharge any liability under the Sinosure Policy or to comply with any obligation which are material under the Sinosure Policy; or

(c) any consent necessary to enable Sinosure to:

(i) issue and maintain the Sinosure Policy;

(ii) discharge any liability under the Sinosure Policy; or

(iii) comply with any provision of the Sinosure Policy which any of the Lenders considers material,

is not granted, expires without being renewed or is revoked or any condition thereof is not satisfied; or

(d) the Agent, the Sinosure Agent or any Lender has received notice in writing of Sinosure's intention to repudiate, terminate or suspend the application of the Sinosure Policy.

5.6.2 If any of the events described in Clause 5.6.1 takes place, the Agent on behalf of the Lenders shall facilitate negotiation with the Borrower in good faith for a maximum period of 30 days with a view to reaching a potential restructuring of the Loan or to arranging a new financing facility for the Vessel to mitigate the loss of the Sinosure Policy on such terms and conditions as are acceptable to the Lenders, provided always that no Lender shall be committed to agree to any such potential restructuring of the Loan or such new financing facility notwithstanding other Lenders may have agreed to do so.

Section 4 Repayment, Prepayment and Cancellation

6 Repayment

6.1 Repayment of Loan The Borrower agrees to repay the Loan to the Agent for the account of the Lenders by 40 consecutive quarterly instalments each in the sum of $412,500, the first instalment falling due on the date which is three calendar months after the Delivery Date, subsequent instalments falling due at consecutive intervals of three calendar months thereafter and the final instalment together with a balloon payment of $3,300,000 (the "Balloon") falling due on the Termination Date. All outstanding Indebtedness shall be due and payable on the Termination Date.

6.2 Reduction of Repayment Instalments If the aggregate amount advanced to the Borrower is less than $19,800,000, the amount of each Repayment Instalment and the Balloon shall be reduced pro rata to the amount actually advanced.

6.3 Reborrowing The Borrower may not reborrow any part of the Loan which is repaid or prepaid.

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7 Illegality, Prepayment and Cancellation

7.1 Illegality If it becomes unlawful in any jurisdiction (other than by reason of Sanctions) for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in the Loan or it becomes unlawful for any Affiliate of a Lender for that Lender to do so:

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

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

7.1.7 the Borrower shall repay that Lender's participation in the Loan on the last day of the current Interest Period or, if earlier, the date specified by that Lender in the notice delivered to the Agent and notified by the Agent to the Borrower (being no earlier than the last day of any applicable grace period permitted by law).

7.2 Voluntary cancellation The Borrower may, if it gives the Agent not less than ten Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being an amount which is an integral multiple of $1,000,000) of the undrawn amount of the Loan. Any cancellation under this Clause 7.2 shall reduce the Commitments of the Lenders rateably.

7.3 Voluntary prepayment of Loan The Borrower may prepay the whole or any part of the Loan (but, if in part, being an amount which is an integral multiple of $1,000,000) subject as follows:

7.3.1 it gives the Agent not less than ten Business Days' (or such shorter period as the Majority Lenders may agree) prior notice;

7.3.2 it pays to the Agent for the account of the Lenders, in addition to the amount prepaid, a fee of an amount equal to one per cent of the amount prepaid in the event that the Borrower prepays the whole of the Loan, which fee shall be paid on the date of the prepayment in the event that such a prepayment occurs on or prior to the second anniversary of the Drawdown Date; and

7.3.3 any prepayment under this Clause 7.3 shall satisfy the obligations under Clause 6.1 (Repayment of Loan) in inverse order of maturity.

7.4 Right of cancellation and prepayment in relation to a single Lender

7.4.3 If:

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

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

the Borrower may, whilst the circumstance giving rise to the requirement for that increase or indemnification continues, give the Agent notice of cancellation of the Commitment(s) of that Lender and its intention to procure the repayment of that Lender's participation in the Loan.

7.4.4 On receipt of a notice referred to in Clause 7.4.1 in relation to a Lender, the Commitment(s) of that Lender shall immediately be reduced to zero.

7.4.5 On the last day of the Interest Period which ends after the Borrower has given notice under Clause 7.4.1 in relation to a Lender (or, if earlier, the date specified by the Borrower in that notice), the Borrower shall repay that Lender's participation in the Loan together with all interest and other amounts accrued under the Finance Documents.

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^7.5  Mandatory prepayment on sale or Total Loss If the Vessel is sold by the Borrower or becomes a Total Loss, the Borrower shall, simultaneously with any such sale or on the earlier of the date falling 180 days after any such Total Loss and the date on which the proceeds of any such Total Loss are realised, prepay the whole of the Indebtedness.

^7.6  Cancellation on default under the MOA In the event that:

^7.6.1  any of the events or circumstances specified in Clauses 23.1.6 (Insolvency), 23.1.7 (Insolvency proceedings) and 23.1.8 (Creditors' process) occurs in relation the Seller; or

^7.6.2  the MOA is terminated, cancelled or otherwise ceases to remain in full force and effect at any time prior to its contractual expiry date,

the Agent may give the Borrower notice of the cancellation of the Commitments of the Lenders.

7.7 Mandatory prepayment on termination of Sinosure Policy If:

7.7.1 the Sinosure Policy is cancelled, terminated, rescinded, repudiated or suspended or becomes invalid, illegal or invalid or otherwise ceases to remain in full force or does not constitute legal, valid, binding and enforceable obligations of any party thereto; or

7.7.2 it becomes unlawful or impossible for Sinosure to discharge any liability under the Sinosure Policy or to comply with any obligation which are material under the Sinosure Policy; or

7.7.3 any consent necessary to enable Sinosure to:

(a) issue and maintain the Sinosure Policy;

(b) discharge any liability under the Sinosure Policy; or

(c) comply with any provision of the Sinosure Policy which any of the Lenders considers material,

is not granted, expires without being renewed or is revoked or any condition thereof is not satisfied; and/or

7.7.4 the Agent, the Sinosure Agent or any Lender has received notice in writing of Sinosure's intention to repudiate, terminate or suspend the application of the Sinosure Policy; or

7.7.5 the Lenders are unable to rely on the Sinosure Policy for any reason whatsoever,

the Agent on behalf of the Lenders shall facilitate negotiation with the Borrower in good faith for a maximum period of 30 days with a view to reaching a potential restructuring of the Loan or to arranging a new financing facility for the Vessel to mitigate the loss of the Sinosure Policy on such terms and conditions as are acceptable to the Lenders, provided always that no Lender shall be committed to agree to any such potential restructuring of the Loan or such new financing facility notwithstanding other Lenders may have agreed to do so.

In the event that the parties do not agree on such a solution within such 30 day period, the Borrower shall immediately on the Agent's written demand make a full prepayment of the Loan.

7.8 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.

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Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs and subject to Clause 7.3.2 (Voluntary prepayment of Loan), without premium or penalty.

In the event of a prepayment under this Agreement the Borrower shall, if applicable, terminate such Transactions as to ensure compliance with the provisions of Clause 22.27 (Permitted Transactions).

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

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

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

Section 5 Costs of Utilisation

8 Interest

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

8.1.1 Margin;

8.1.2 LIBOR; and

8.1.3 Mandatory Cost, if any

8.2 Payment of interest Interest shall accrue day to day, shall be calculated on the basis of a 360 day year, and 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 months, on the dates falling at three monthly intervals after the first day of the Interest Period).

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

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

8.4 Notification of rates of interest The Agent shall promptly notify the Borrower of the determination of a rate of interest under this Agreement.

9 Interest Periods

9.1 Selection of Interest Periods The Borrower may select in a written notice to the Agent the duration of an Interest Period for the Loan subject as follows:

9.1.1 each notice is irrevocable and must be delivered to the Agent by the Borrower not later than 11.00 a.m. (Amsterdam time) on the Quotation Day;

9.1.2 if the Borrower fails to give a notice in accordance with Clause 9.1.1, the relevant Interest Period will, subject to Clauses 9.2 (Interest Periods to meet Repayment Dates) and 9.3 (Non-Business Days), be three months;

9.1.3 subject to this Clause 9, the Borrower may select an Interest Period of one or three months;

9.1.4 an Interest Period shall not extend beyond the Termination Date; and

9.1.5 each Interest Period shall start on the Drawdown Date or (if the Loan is already made) on the last day of its preceding Interest Period and end on the date which numerically corresponds to the Drawdown Date or the last day of the preceding Interest Period in the relevant calendar month except that, if there is no numerically corresponding date in that calendar month, the Interest Period shall end on the last Business Day in that month.

9.2 Interest Periods to meet Repayment Dates If an Interest Period will expire after the next Repayment Date, there shall be a separate Interest Period for a part of the Loan equal to the Repayment Instalment due on that next Repayment Date and that separate Interest Period shall expire on that next Repayment Date.

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

10 Changes to the Calculation of Interest

10.1 Absence of quotations 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 am on the Quotation Day, the applicable LIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.

10.2 Market disruption If a Market Disruption Event occurs for any Interest Period, then the rate of interest on each Lender's share of the Loan for that Interest Period shall be the percentage rate per annum which is the sum of:

10.2.1 the Margin;

10.2.2 the rate notified to the Agent by that Lender as soon as practicable, and in any event by close of business on the date falling three Business Days after the Quotation Day (or, if earlier, on the date falling three Business Days prior to the date on which interest is due to be paid in respect of that Interest Period), to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in the Loan from whatever source it may reasonably select; and

10.2.3 the Mandatory Cost, if any, applicable to that Lender's participation in the Loan.

In this Agreement "Market Disruption Event" means:

(a) at or about noon on the Quotation Day for the relevant Interest Period LIBOR is to be determined by reference to the Reference Banks and none or only one of the Reference Banks supplies a rate to the Agent to determine LIBOR for dollars and the relevant Interest Period; or

(b) before close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders (whose participations in the Loan exceed 66²/₃% of the Loan) that the cost to it of funding its participation in the Loan from whatever source it may reasonably select would be in excess of LIBOR.

10.3 Alternative basis of interest or funding

10.3.1 If a Market Disruption Event occurs and the Agent or the Borrower so requires, the Agent and the Borrower shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest.

10.3.2 Any alternative basis agreed pursuant to Clause 10.3.1 shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties.

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

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

11 Fees

11.1 Commitment Fee The Borrower shall pay to the Agent (for the account of the Lenders in proportion to their Commitments) a feecomputed at the rate of one per cent per annum of the undrawn portion of the Total Commitments during the period commencing on the date of this Agreement to and including the earlier to occur of (i) the Drawdown Date and (ii) the end of the Availability Period.

The accrued commitment fee is payable on:

11.1.4 the last day of each successive period of six months which ends during the period commencing on the date of this Agreement to and including the earlier to occur of (i) the Drawdown Date and (ii) the end of the Availability Period; and

11.1.5 on the earlier of (i) the Drawdown Date and (ii) the end of the Availability Period.

11.2 Upfront fee The Borrower shall pay to the Arranger an upfront fee in the amount and at the times agreed in a Fee Letter.

11.3 Structuring The Borrower shall pay to the Arranger a structuring fee in the amount and at the times agreed in a Fee Letter

11.4 Sinosure Insurance Premium The Borrower:

11.4.1 acknowledges that the Sinosure Agent (acting on behalf of the Lenders) shall procure the placement of the Sinosure Policy and the Lenders shall benefit from the Sinosure Policy throughout the duration of the Facility Period;

11.4.2 agrees to pay:

(i) the Sinosure Insurance Premium to allow the Sinosure Policy to be issued;

(ii) any related costs and expenses that are incurred by Sinosure in respect of the issue of the Sinosure Policy;

(iii) any additional Sinosure Insurance Premium (if applicable, as determined by Sinosure) when there is any amendment or waiver of any term of a Finance Document; and

(iv) any related costs and expenses that are incurred by Sinosure when there is any amendment or waiver of any term of a Finance Document,

each as determined by Sinosure;

11.4.3 agrees that its obligation to make the payments set out in Clause 11.4.2 in respect of the Sinosure Insurance Premium (or any part of it) shall be an absolute obligation and shall not be affected by any matter whatsoever;

11.4.4 acknowledges that any refund of the Sinosure Insurance Premium (or any part of it) shall be made in accordance with the general terms of the Sinosure Policy and any applicable regulations of Sinosure; and

11.4.5 acknowledges that no Finance Party is in any way involved in the determination of the amount of the Sinosure Insurance Premium and agrees that the Borrower shall have no claim or defence against any Finance Party in connection with the amount of such Sinosure Insurance Premium.

Section 6 Additional Payment Obligations

12 Tax Gross Up and Indemnities

12.1 Definitions In this Agreement:

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

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

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

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

Unless a contrary indication appears, in this Clause 12 a reference to "determines" or "determined" means a determination made in the absolute discretion of the person making the determination.

12.2 Tax gross-up The Borrower shall (and shall procure that each other Security Party shall) make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law, subject as follows:

12.2.6 the Borrower shall promptly upon becoming aware that it or any other Security Party must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Borrower and any such other Security Party;

12.2.7 if a Tax Deduction is required by law to be made by the Borrower or any other Security Party, the amount of the payment due from the Borrower or that other Security Party shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required;

12.2.8 if the Borrower or any other Security Party is required to make a Tax Deduction, the Borrower shall (and shall procure that such other Security Party shall) make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law; and

12.2.9 within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Borrower shall (and shall procure that such other Security Party shall) deliver to the Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

12.3 Tax indemnity

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

12.3.7 Clause 12.3.1 shall not apply:

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

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

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

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

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

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

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

12.3.8 A Protected Party making, or intending to make a claim under Clause 12.3.1 shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Borrower.

12.3.9 A Protected Party shall, on receiving a payment from the Borrower under this Clause 12.3, notify the Agent.

12.4 Tax Credit If the Borrower or any other Security Party makes a Tax Payment and the relevant Finance Party determines that:

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

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

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

12.5 Stamp taxes 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.

12.6 VAT

12.6.1 All amounts expressed to be payable under a Finance Document by any Party or any Security Party to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, subject to Clause 12.6.2, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party or any Security Party under a Finance Document and such Finance Party is required to account to the relevant tax authority for the VAT, that Party or Security Party must pay to such Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and such Finance Party must promptly provide an appropriate VAT invoice to the Borrower).

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

(a) (where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this Clause 12.6.2(a) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and

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

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

12.6.4 Any reference in this Clause 12.6 to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term "representative member" to have the same meaning as in the Value Added Tax Act 1994).

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

12.7 FATCA information

12.7.1 Subject to Clause 12.7.3, each Party shall, within ten Business Days of a reasonable request by another Party:

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

(iii) a FATCA Exempt Party; or

(iv) not a FATCA Exempt Party;

(d) 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

(e) 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.

12.7.2 If a Party confirms to another Party pursuant to Clause 12.7.1(a)(i) that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.

12.7.3 Clause 12.7.1 shall not oblige any Finance Party to do anything, and Clause 12.7.1(c) shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of:

(c) any law or regulation;

(d) any fiduciary duty; or

(e) any duty of confidentiality.

12.7.4 If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with Clause 12.7.1(a) or 12.7.1(b) (including, for the avoidance of doubt, where Clause 12.7.3 applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.

12.8 FATCA Deduction

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

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

13 Increased Costs

13.1 Increased costs Subject to Clause 13.3 (Exceptions) the Borrower shall, within three Business Days of a demand by the Agent, pay to the Agent for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any law or regulation or any request from or requirement of any central bank or other fiscal, monetary or other authority made after the date of this Agreement (including Basel III and any other which relates to capital adequacy or liquidity controls or which affects the manner in which that Finance Party allocates capital resources to obligations under this Agreement and/or the Master Agreement) or (iii) the implementation or application of or compliance with Basel III, CRR or CRD IV or any other law or regulation which implements Basel III, CRR or CRD IV (whether such implementation, application or compliance is by a government, regulator, a Lender or any Affiliate of a Lender) or (iv) any change in the risk weight allocated by that Finance Party to the Borrower after the date of this Agreement.

In this Agreement:

(a)     "Increased Costs" means:

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

(iv) an additional or increased cost; or

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

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

(b) "Basel III" means (a) the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated, (b) the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement – Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated and (c) any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III";

13.1.10 "CRR" means Regulation EU No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU No 648/2012), as amended, supplemented or restated; and

13.1.11 "CRD IV" means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC, as amended, supplemented or restated.

13.2 Increased cost claims

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

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

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

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

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

13.3.5 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);

13.3.6 compensated for by the payment of the Mandatory Cost;

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

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

In this Clause 13.3, a reference to a "Tax Deduction" has the same meaning given to the term in Clause 12.1 (Definitions).

14 Other Indemnities

14.1 Currency indemnity If any sum due from the Borrower or the Guarantor 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:

14.1.12 making or filing a claim or proof against the Borrower or the Guarantor (as the case may be), or

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

the Borrower or the Guarantor (as the case may be)shall as an independent obligation, within three 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 Finance Party at the time of its receipt of that Sum.

The Borrower and the Guarantor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.

14.2 Other indemnities

14.2.9 The Borrower shall, within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability incurred by that Finance Party as a result of:

(a) the occurrence of any Event of Default;

(b) a failure by the Borrower to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 28 (Sharing among the Finance Parties);

(c) funding, or making arrangements to fund, the Loan following delivery by the Borrower of a Drawdown Request but the 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 a Finance Party alone); or

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

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

14.2.11 Subject to any limitations set out in Clause 14.2.2, the indemnity in that Clause shall cover any cost, loss or liability incurred by each Indemnified Person in any jurisdiction:

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

(b) in connection with any Environmental Claim.

14.3 Indemnity to the Agent The Borrower shall promptly indemnify the Agent against:

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

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

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

(c) instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under this Agreement; and

14.3.2 any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Agent (otherwise than by reason of the Agent's gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 30.12 (Disruption to Payment Systems etc.) notwithstanding the Agent's negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) in acting as Agent under the Finance Documents.

14.4 Indemnity to the Security Agent The Borrower and the Guarantor shall promptly indemnify the Security Agent and every Receiver and Delegate against any cost, loss or liability incurred by any of them as a result of:

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

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

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

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

14.4.10 any default by any Security Party in the performance of any of the obligations expressed to be assumed by it in the Finance Documents; or

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

14.5 Sinosure indemnity The Borrower shall indemnify the Sinosure Agent and each Lender on demand and hold each of those parties harmless from and against any duly evidenced additional premiums, cost or expense as provided for under the Sinosure Policy which Sinosure may charge, invoice or set-off against amounts owing to the Sinosure Agent or the Lenders, including without limitation as a result of a change of the delivery schedule of the Vessel or otherwise properly incurred by the Sinosure Agent or the Lenders in connection with compliance with the Sinosure Policy.

14.6 Indemnity survival The indemnities contained in this Agreement shall survive repayment of the Loan.

15 Mitigation by the Lenders

15.1 Mitigation Each Finance Party shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to any of Clause 7.1 (Illegality), Clause 12 (Tax Gross Up and Indemnities) or Clause 13 (Increased Costs) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office. The above does not in any way limit the obligations of any Security Party under the Finance Documents.

15.2 Limitation of liability The Borrower shall promptly indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 15.1 (Mitigation). A Finance Party is not obliged to take any steps under Clause 15.1 if, in its opinion (acting reasonably), to do so might be prejudicial to it.

16 Costs and Expenses

16.1 Transaction expenses The Borrower shall promptly on demand pay the Agent, the Security Agent, the Sinosure Agent, Sinosure and the Arranger the amount of all costs and expenses (including legal fees) reasonably incurred by any of them (and, in the case of the Security Agent, by any Receiver or Delegate) in connection with:

16.1.3 the negotiation, preparation, printing, execution, syndication and perfection of this Agreement and any other documents referred to in this Agreement;

16.1.4 the negotiation, preparation, printing, execution and perfection of any other Finance Documents executed after the date of this Agreement;

16.1.5 any other document which may at any time be required by a Finance Party to give effect to any Finance Document or which a Finance Party is entitled to call for or obtain under any Finance Document (including, without limitation, any valuation of the Vessel); and

16.1.6 any discharge, release or reassignment of any of the Security Documents.

16.2 Amendment costs If (a) a Security Party requests an amendment, waiver or consent or (b) an amendment is required under Clause 30.11 (Change of currency), the Borrower shall, within three Business Days of demand, reimburse each of the Agent, the Security Agent, the Sinosure Agent and Sinosure for the amount of all duly documented costs and expenses (including legal fees) reasonably incurred by the Agent, the Security Agent, the Sinosure Agent and Sinosure (and, in the case of the Security Agent, by any Receiver or Delegate) in responding to, evaluating, negotiating or complying with that request or requirement.

16.3 Enforcement and preservation costs The Borrower shall, within three Business Days of demand, pay to each Finance Party, Sinosure and each other Secured Party the amount of all costs and expenses (including legal fees) incurred by that Finance Party in connection with the enforcement of, or the preservation of any rights under, any Finance Document and any proceedings instituted by or against the Security Agent as a consequence of taking or holding the Security Documents or enforcing those rights including (without limitation) any losses, costs and expenses which that Finance Party or other Secured Party may from time to time sustain, incur or become liable for by reason of that Finance Party or other Secured Party being mortgagee of the Vessel and/or a lender to the Borrower, or by reason of that Finance Party or other Secured Party being deemed by any court or authority to be an operator or controller, or in any way concerned in the operation or control, of the Vessel.

16.4 Other costs The Borrower shall, within three Business Days of demand, pay to each Finance Party, Sinosure and each other Secured Party the amount of all sums which that Finance Party or other Secured Party may pay or become actually or contingently liable for on account of the Borrower in connection with the Vessel (whether alone or jointly or jointly and severally with any other person) including (without limitation) all sums which that Finance Party or other Secured Party may pay or guarantees which it may give in respect of the Insurances, any expenses incurred by that Finance Party or other Secured Party in connection with the maintenance or repair of the Vessel or in discharging any lien, bond or other claim relating in any way to the Vessel, and any sums which that Finance Party or other Secured Party may pay or guarantees which it may give to procure the release of the Vessel from arrest or detention.

Section 7 Security and Application of Moneys

17 Security Documents and Application of Moneys

17.1 Security Documents As security for the payment of the Indebtedness, the Borrower shall execute and deliver to the Security Agent or cause to be executed and delivered to the Security Agent the following documents in such forms and containing such terms and conditions as the Security Agent shall require:

17.1.12 a first preferred mortgage over the Vessel;

17.1.13 a first priority deed or deeds of assignment of the Insurances, Earnings, any Charterand Requisition Compensation of the Vessel; and the first priority assignment of Insurances from the Managers contained in the Managers' Undertakings;

17.1.14 the guarantee and indemnity from the Guarantor;

17.1.15 a first priority account security deed in respect of all amounts from time to time standing to the credit of the Account;

17.1.16 a first priority charge of all the issued shares of the Borrower;

17.1.17 a first priority deed of assignment over the Master Agreement Proceeds;

17.1.18 a first priority deed of assignment of any Intercompany Loan Agreement; and

17.1.19 a subordination agreement by which the rights of any lender under any Intercompany Loan are fully subordinated to the rights of the Finance Parties under the Finance Documents.

17.2 Account The Borrower shall maintain the Account with the Account Bank for the duration of the Facility Period free of Encumbrances and rights of set off other than those created by or under the Finance Documents and rights of set-off in favour of the Account Bank as account holder.

17.3 Earnings The Borrower shall procure that all Earnings, proceeds from any Insurances, any liquidated damages, any Requisition Compensation and the advanced Loan are credited to the Account.

17.4 Application of Account The Borrower shall procure that there is transferred from the Account to the Agent for the account of the Lenders:

17.4.1 on each Repayment Date, the amount of the Repayment Instalment then due; and

17.4.2 on each Interest Payment Date, the amount of interest then due

and the Borrower irrevocably authorises the Security Agent to instruct the Account Bank to make those transfers.

17.5 Borrower's obligations not affected If for any reason the amount standing to the credit of the Account is insufficient to pay any Repayment Instalment or to make any payment of interest when due, the Borrower's obligation to pay that Repayment Instalment or to make that payment of interest shall not be affected.

17.6 Application of Earnings During the Facility Period the Earnings are to be applied as follows:

17.6.1 firstly, towards payment of Operating Expenses;

17.6.2 secondly, towards payment of all other sums other than principal and interest owing to the Finance Parties under the Finance Documents and Sinosure under the Sinosure Policy;

17.6.3 thirdly, towards payment of debt service under this Agreement; and

17.6.4 fourthly, towards payment of debt service under the Master Agreement,

and subject to no Event of Default being continuing, the balance of the funds in the Account will be freely available to the Borrower.

17.7 Relocation of Account On and at any time an Event of Default is continuing, the Security Agent may without the consent of the Borrower instruct the Account Bank to relocate the Account to any other branch of the Account Bank, without prejudice to the continued application of this Clause 17 and the rights of the Finance Parties under the Finance Documents.

17.8 Access to information The Borrower agrees that the Security Agent (and its nominees) may from time to time during the Facility Period review the records held by the Account Bank (whether in written or electronic form) in relation to the Account, and irrevocably waives any right of confidentiality which may exist in relation to those records.

^17.9  Statements Without prejudice to the rights of the Security Agent under Clause 17.8 (Access to information), the Borrower shall procure that the Account Bank provides to the Security Agent, no less frequently than each calendar month during the Facility Period, written statements of account showing all entries made to the credit and debit of the Account during the immediately preceding calendar month.

17.10 Application after acceleration From and after the giving of notice to the Borrower by the Agent under Clause 23.2 (Acceleration), the Borrower shall procure that all sums from time to time standing to the credit of the Account are immediately transferred to the Security Agent or any Receiver or Delegate for application in accordance with Clause 17.11 (Application of moneys by Security Agent) and the Borrower irrevocably authorises the Security Agent to instruct the Account Bank to make those transfers.

17.11 Application of moneys by Security Agent The Borrower and the Finance Parties irrevocably authorise the Security Agent or any Receiver or Delegate to apply all moneys which it receives and is entitled to receive:

17.11.1 pursuant to a sale or other disposition of the Vessel or any right, title or interest in the Vessel; or

17.11.2 by way of payment of any sum in respect of the Master Agreement Proceeds, any Intercompany Loan Agreement, the Insurances, Earnings, any Charter or any Requisition Compensation; or

17.11.3 by way of transfer of any sum from the Account; or

17.11.4 otherwise under or in connection with any Security Document,

in or towards satisfaction of the Indebtedness in the following order:

17.11.5 first, any unpaid fees, costs, expenses and default interest due to the Agent and the Security Agent (and, in the case of the Security Agent, to any Receiver or Delegate) under all or any of the Finance Documents, such application to be apportioned between the Agent and the Security Agent pro rata to the aggregate amount of such items due to each of them;

17.11.6 second, any unpaid fees, costs, expenses (including any sums paid by the Lenders under Clause 26.11 (Indemnity)) of the Lenders due under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such items due to each of them;

17.11.7 third, any accrued but unpaid default interest due to the Lenders under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such default interest due to each of them;

17.11.8 fourth, any other accrued but unpaid interest due to the Lenders under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such interest due to each of them;

17.11.9 fifth, any principal of the Loan due and payable but unpaid under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such principal due to each of them; and

17.11.10 sixth, any other sum due and payable to any Finance Party but unpaid under all or any of the Finance Documents, such application to be apportioned between the Finance Parties pro rata to the aggregate amount of any such sum due to each of them,

Provided that any part of the Indebtedness arising out of the Master Agreement shall be satisfied only after every other part of the Indebtedness for the time being due and payable has been satisfied in full; and

Without prejudice to the foregoing, if Sinosure has paid and the Sinosure Agent or the Lenders have received all amounts payable under the Sinosure Policy, Sinosure may provide for a different manner of application from that set out in Clause 17.11 above either as regards a specified sum or sums or as regards sums in a specified category or categories.

17.1 Sinosure Insurance Proceeds

17.1.20 If the Sinosure Agent or the Lenders receive any Sinosure Insurance Proceeds, the Sinosure Agent or the Lenders (as the case may be) shall pay the amount actually received by it to the Security Agent to be applied in or towards satisfaction of any principal of the Loan due and payable but unpaid under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such principal due to each of them. Any Sinosure Insurance Proceeds received by the Sinosure Agent or the Lenders (as the case may be) or applied by the Security Agent pursuant to this Clause 17.12.1 shall not be deemed to satisfy, reduce, release or prejudice any of the obligations of any Security Party under any Finance Document in whole or in part which obligations shall remain due and payable notwithstanding the receipt or application of the Sinosure Insurance Proceeds.

17.1.21 Notwithstanding any provision to the contrary in any Finance Document, in the event Sinosure pays out in full or in part the Sinosure Insurance Proceeds in accordance with the Sinosure Policy, the obligations of the Security Parties under the Finance Documents shall not be reduced or affected and Sinosure shall be entitled, to the extent of such payment, to exercise the rights the Finance Parties may hold (whether presently or in the future) against any Security Party pursuant to the relevant Finance Document or any relevant laws and/or regulations, as the case may be (but without prejudice to the exercise of such rights by the Finance Parties) unless and until such Sinosure Insurance Proceeds and the interest accrued thereon are fully reimbursed to Sinosure and with respect to the obligations of the Security Parties owed to the Finance Parties under the Finance Documents (or any of them), such obligations shall additionally be owed to Sinosure by way of subrogation of the rights of the Finance Parties.

17.1.22 Each of the Lenders agrees that as soon as Sinosure irrevocably and unconditionally pays in full all moneys due under the Sinosure Policy then each of the Lenders shall promptly transfer to Sinosure their respective Commitments in proportion to and in accordance with the schedule of payments made by Sinosure under the Sinosure Policy whereupon Sinosure shall, upon receipt by the Agent of a duly completed Transfer Certificate in accordance with the provisions of Clause 24.5 (Procedure for transfer), and modified to the extent agreed between the Finance Parties and Sinosure for consistency with the terms and conditions of the Sinosure Policy, be a transferee and as such shall be entitled to the rights and benefits of the Lenders under the Finance Documents to the extent of its interest. Notwithstanding any provisions to the contrary in any Finance Document, the Borrower consents to such assignment and transfer.

17.1.23 The Borrower shall indemnify Sinosure, the Sinosure Agent and the Lenders in respect of any costs or expenses (including legal fees) suffered or incurred by Sinosure, the Sinosure Agent and the Lenders in connection with the transfer referred to hereinabove or in connection with any review by Sinosure of any Default or dispute between any Security Party and any of the Finance Parties occurring prior to the transfer referred to this Clause 17.12.

17.2 Retention on account Moneys to be applied by the Security Agent or any Receiver or Delegate under Clause 17.11 (Application of moneys by Security Agent) or Clause 17.12 (Sinosure Insurance Proceeds) shall be applied as soon as practicable after the relevant moneys are received by it, or otherwise become available to it, save that (without prejudice to any other provisions contained in any of the Security Documents) the Security Agent or any Receiver or Delegate may retain any such moneys by crediting them to a suspense account for so long and in such manner as the Security Agent or such Receiver or Delegate may from time to time determine with a view to preserving the rights of the Finance Parties or any of them to prove for the whole of the Indebtedness (or any relevant part) against the Borrower or any other person liable.

17.3 Additional security If at any time the aggregate of the FMV of the Vessel and the value of any additional security (such value to be the face amount of the deposit (in the case of cash), determined conclusively by appropriate advisers appointed by the Agent (in the case of other charged assets), and determined by the Agent in its discretion (in all other cases)) for the time being provided to the Security Agent under this Clause 17.14 is less than 130% of the amount of theLoan then outstanding (the "VTL Coverage"), the Borrower shall, within 30 days of the Agent's request, at the Borrower's option:

17.3.3 pay to the Security Agent or to its nominee a cash deposit in the amount of the shortfall to be secured in favour of the Security Agent as additional security for the payment of the Indebtedness; or

17.3.4 give to the Security Agent other additional security in amount and form acceptable to the Security Agent in its discretion; or

17.3.5 prepay the Loan in the amount of the shortfall.

Clauses 6.3 (Reborrowing), 7.3.3 (Voluntary prepayment of Loan) and 7.8 (Restrictions) shall apply, mutatis mutandis, to any prepayment made under this Clause 17.14 and the value of any additional security provided shall be determined by the Agent in its discretion.

If the Borrower has provided additional security in accordance with the Agent's request under this Clause 17.14, the Borrower may no less than six months after the Borrower has provided additional security in accordance with the Agent's request under this Clause 17.14 request that the Agent test compliance with the VTL Coverage. The Borrower shall bear the cost of valuations obtained by the Agent pursuant to this paragraph to determine the FMV of the Vessel and the value of any additional security provided in accordance with the Agent's request under this Clause 17.14. If the Agent shall determine when testing compliance with the VTL Coverage pursuant to this paragraph that all or any part of that additional security may be released without resulting in a shortfall in the VTL Coverage, provided that no Event of Default is continuing then the Security Agent shall effect a release of all or any part of that additional security in accordance with the Agent's instructions, but this shall be without prejudice to the Agent's right to make a further request under this Clause 17.14 should the value of the remaining security subsequently merit it.

The Agent may obtain valuations to determine the FMV of the Vessel for the purpose of testing compliance of this Clause 17.14 at any time. The Agent shall bear the cost of valuations obtained by the Agent to determine the FMV of the Vessel for the purpose of testing compliance of this Clause 17.14 provided that if an Event of Default is continuing the Borrower shall bear the cost of valuations obtained by the Agent to determine the FMV of the Vessel for the purpose of testing compliance of this Clause 17.14.

17.4 Contingent Amount The Borrower and the Swap Provider have agreed to enter into Master Agreements for the hedging of the Borrower's exposure to interest rate fluctuations.   The Borrower and the Swap Provider have agreed that the Mortgage shall secure any obligations payable by the Borrower to the Swap Provider at any time pursuant to any Master Agreement in a maximum aggregate amount of up to $7,920,000.  The Borrower and the Swap Provider have further agreed that each of the other Security Documents shall not have any limitation as to the amount payable by the Borrower to the Swap Provider at any time pursuant to any Master Agreement which is secured by such other Security Documents.

18 Guarantee and Indemnity

18.1 Guarantee and indemnity The Guarantor irrevocably and unconditionally jointly and severally:

18.1.5 guarantees to each Finance Party punctual performance by each other Security Party of all that Security Party's obligations under the Finance Documents;

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

18.1.7 agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of a Security Party not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due. The amount payable by the Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 18 if the amount claimed had been recoverable on the basis of a guarantee.

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

18.3 Reinstatement If any discharge, release or arrangement (whether in respect of the obligations of any Security Party 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 will continue or be reinstated as if the discharge, release or arrangement had not occurred.

18.4 Waiver of defences The obligations of the Guarantor under this Clause 18 will not be affected by an act, omission, matter or thing which, but for this Clause 18.4, would reduce, release or prejudice any of its obligations under this Clause 18 (without limitation and whether or not known to it or any Finance Party) including:

18.4.1 any time, waiver or consent granted to, or composition with, any Security Party or other person;

18.4.2 the release of any other Security Party or any other person under the terms of any composition or arrangement with any creditor of any Security Party;

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

18.4.4 any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of a Security Party or any other person;

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

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

18.4.7 any insolvency or similar proceedings.

18.5 Guarantor intent Without prejudice to the generality of Clause 18.4 (Waiver of defences), the Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.

18.6 Immediate recourse 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. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

18.7 Appropriations Until all amounts which may be or become payable by the Security Parties 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:

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

18.7.2 hold in an interest-bearing suspense account any moneys received from the Guarantor or on account of the Guarantor's liability under this Clause 18.

18.8 Deferral of Guarantor's rights Until all amounts which may be or become payable by the Security Parties 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:

18.8.1 to be indemnified by a Security Party;

18.8.2 to claim any contribution from any other guarantor of any Security Party's obligations under the Finance Documents;

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

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

18.8.5 to exercise any right of set-off against any Security Party; and/or

18.8.6 to claim or prove as a creditor of any Security Party in competition with any Finance Party.

If the Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Security Parties 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).

^18.9  Additional security 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.

18.10 Subordination The Guarantor agrees and undertakes with the Finance Parties that all claims of whatsoever nature which it has or may have at any time against the Borrower or any other Security Party or any of their respective property or assets shall rank after and be in all respects subordinate to any and all claims, whether actual or contingent, which the Finance Parties have or may have at any time against the Borrower or such other Security Party or any of its property or assets and that it will not without the prior written consent of the Agent (acting on the instructions of the Majority Lenders):

18.10.11 demand or accept payment in whole or in part of any moneys owing to it by the Borrower or any other Security Party;

18.10.12 take any steps to enforce its rights to recover any moneys owing to it by the Borrower or any other Security Party and more particularly (but without limitation) take or issue any judicial or other legal proceedings against the Borrower or other Security Party or any of their respective property or assets; or

18.10.13 prove in the liquidation or other dissolution of the Borrower or other Security Party in competition with a Finance Party.

Section 8 Representations, Undertakings and Events of Default

19 Representations

19.1 Representations The Borrower and the Guarantormake the representations and warranties set out in this Clause 19 to each Finance Party.

19.1.6 Status Each of the Security Parties:

(a) is a corporation duly incorporated and validly existing under the law of its jurisdiction of incorporation; and

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

19.1.7 Binding obligations Subject to the Legal Reservations:

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

(d) (without limiting the generality of Clause 19.1.2(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.

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

(a) any law or regulation applicable to such Security Party;

(b) the constitutional documents of such Security Party; or

(c) any agreement or instrument binding upon such Security Party or any of such Security Party's assets or constitute a default or termination event (however described) under any such agreement or instrument.

19.1.9 Power and authority

(a) Each of the Security Parties 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.

(b) No limit on the powers of any Security Party 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.

19.1.10 Validity and admissibility in evidence All Authorisations required or desirable:

(a) to enable each of the Security Parties 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 each Finance Party to enforce and exercise all its rights under the Relevant Documents; and

(b) to make the Relevant Documents to which any Security Party is a party admissible in evidence in its Relevant Jurisdictions,

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

19.1.11 Governing law and enforcement

(a) The choice of governing law of any Finance Document will be recognised and enforced in the Relevant Jurisdictions of each relevant Security Party.

(b) 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 Security Party.

19.1.12 Insolvency No corporate action, legal proceeding or other procedure or step described in Clause 23.1.7 (Insolvency proceedings) or creditors' process described in Clause 23.1.8 (Creditors' process) has been taken or threatened in relation to a Security Party; and none of the circumstances described in Clause 23.1.6 (Insolvency) applies to a Security Party.

19.1.13 No filing or stamp taxes Under the laws of the Relevant Jurisdictions of each relevant Security Party 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 registration of the Mortgage at the Ships Registry where title to the Vessel is registered in the ownership of the Borrower and payment of associated fees, which registration, filing, taxes and fees will be made and paid promptly after the date of the relevant Finance Document.

19.1.14 Deduction of Tax None of the Security Parties 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.

19.1.15 No default

(a) No Event of Default and, on the date of this Agreement and the Drawdown Date, no Default has occurred and is continuing or is reasonably likely to result from the advance of the Loan or the entry into, the performance of, or any transaction contemplated by, any of the Relevant Documents.

(b) 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 Security Parties or to which its assets are subject which has or is reasonably likely to have a Material Adverse Effect.

19.1.16 No misleading information Save as disclosed in writing to the Agent and the Arranger prior to the date of this Agreement:

(a) all material information provided to a Finance Party by or on behalf of any of the Security Parties 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 any Finance Party 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

(b) all other written information provided by any of the Security Parties (including its advisers) to a Finance Party was true, complete and accurate in all material respects as at the date it was provided and is not misleading in any respect.

19.1.17 Financial statements

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

(b) The audited Original Financial Statements give a true and fair view of the Guarantor's financial condition and results of operations during the relevant financial year.

(c) There has been no material adverse change in the Guarantor's assets, business or financial condition since the date of the Original Financial Statements.

(d) The Guarantor's most recent financial statements delivered pursuant to Clause 20.1 (Financial statements):

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

(ii) 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.

(e) Since the date of the most recent financial statements delivered pursuant to Clause 20.1(Financial statements) there has been no material adverse change in the business, assets or financial condition of the Guarantor.

19.1.18 No proceedings pending or threatened No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which are reasonably likely to have a Material Adverse Effect have been started or threatened against any of the Security Parties.

19.1.19 No breach of laws None of the Security Parties has breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.

19.1.20 Environmental laws

(a) Each of the Security Parties is in compliance with Clause 22.3 (Environmental compliance) and 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.

(b) No Environmental Claim has been commenced or is threatened against any of the Security Parties where that claim has or is reasonably likely, if determined against that Security Party, to have a Material Adverse Effect.

19.1.21 Taxation

(a) None of the Security Parties is materially overdue in the filing of any Tax returns or is overdue in the payment of any amount in respect of Tax.

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

(c) Each of the Security Parties is resident for Tax purposes only in its Original Jurisdiction.

19.1.22 Anti-corruption law Each of the Security Parties and each Affiliate of any of them has conducted its businesses in compliance with applicable anti-corruption laws and has instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.

19.1.23 No Encumbrance or Financial Indebtedness

(a) No Encumbrance exists over all or any of the present or future assets of the Borrower.

(b) The Borrower does not have any Financial Indebtedness outstanding other than as permitted by this Agreement.

19.1.24 Pari passu ranking The payment obligations of each of the Security Parties 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.

19.1.25 No adverse consequences

(a) It is not necessary under the laws of the Relevant Jurisdictions of any of the Security Parties:

(i) in order to enable any Finance Party to enforce its rights under any Finance Document; or

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

that any Finance Party should be licensed, qualified or otherwise entitled to carry on business in any of the Relevant Jurisdictions of any of the Security Parties.

(b) No Finance Party is or will be deemed to be resident, domiciled or carrying on business in any of the Relevant Jurisdictions of any of the Security Parties by reason only of the execution, performance and/or enforcement of any Finance Document.

19.1.26 Disclosure of material facts Neither the Borrower nor the Guarantor is aware of any material facts or circumstances which have not been disclosed to the Agent 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 Borrower.

19.1.27 Completeness of Relevant Documents The copies of any Relevant Documents provided or to be provided by the Borrower to the Agent 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 Agent.

^19.1.28  No Immunity No Security Party or any of its assets is immune to any legal action or proceeding

19.1.29 Money laundering Any borrowing by the 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.

19.1.30 Sanctions As regards Sanctions:

(a) none of the Security Parties or any Affiliate of any of them is a Prohibited Person or is owned or controlled by, or acting directly or indirectly on behalf of or for the benefit of, a Prohibited Person and none of such persons owns or controls a Prohibited Person;

(b) no proceeds of the Loan shall be made available, directly or indirectly, to or for the benefit of a Prohibited Person or otherwise shall be, directly or indirectly, applied in a manner or for a purpose prohibited by Sanctions; and

(c) each of the Security Parties and each Affiliate of any of them is in compliance with all Sanctions.

19.1.31 Patriot Act To the extent applicable the Borrower and the Guarantor are in compliance with (i) the Trading with the Enemy Act, and each of the foreign assets control regulations of the United States Treasury Department (31 C.F.R, Subtitle B, Chapter V) and any other enabling legislation or executive order relating thereto and (ii) the Patriot Act.  No part of the proceeds of the Loan will be used, directly or indirectly, for any payments to any government official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

19.2 Repetition Each Repeating Representation is deemed to be repeated by the Borrower and the Guarantorby reference to the facts and circumstances then existing on the date of the Drawdown Request, on the Drawdown Date, on the first day of each Interest Period.

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20 Information Undertakings

The undertakings in this Clause 20 remain in force for the duration of the Facility Period.

20.1 Financial statements The Guarantor shall supply to the Agent in sufficient copies for all of the Lenders:

20.1.3 as soon as the same become available, but in any event within 120 days after the end of each of its financial years, its audited consolidated financial statements for that financial year; and

20.1.4 as soon as the same become available, but in any event within 90 days after the end of each half year during each of its financial years, its unaudited consolidated semi-annual management accounts for that half year.

20.2 Compliance Certificate

20.2.8 The Borrower shall supply to the Agent, with each set of its annual financial statements delivered pursuant to Clause 20.1.1 (Financial statements) and each set of its management accounts delivered pursuant to Clause 20.1.2 (Financial statements), a Compliance Certificate setting out (in reasonable detail) computations as to compliance with Clause 21 (Financial Covenants) as at the date as at which those financial statements were drawn up.

20.2.9 The Borrower shall supply to the Agent on 31 December and 30 June of each year during the Facility Period a Compliance Certificate stating only that no Event of Default is continuing.

20.2.10 The Borrower shall supply to the Agent, with each set of its annual financial statements delivered pursuant to Clause 20.1.1 (Financial statements), valuations issued no more than 30 days prior to such date by two Approved Shipbrokers evidencing the FMV of the Vessel which the Agent shall use in order to determine compliance with Clause 17.14 (Additional Security), such valuations being at the cost of the Borrower.

^20.2.11  Each Compliance Certificate shall be signed by the chief financial officer of the Guarantor and, in the case of each Compliance Certificate issued together with its annual financial statements, by the Borrower's auditors.

20.3 Requirements as to financial statements

Each set of financial statements delivered by the Guarantor under Clause 20.1 (Financial statements):

20.3.5 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; and

20.3.6 shall be prepared using US 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 Agent that there has been a change in US GAAP, the accounting practices or reference periods and its auditors deliver to the Agent:

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

(d) sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Agent to determine whether Clause 21 (Financial Covenants) has been complied with and make an accurate comparison between the financial position indicated in those financial statements and the Original Financial Statements.

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

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

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

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

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

20.4.4 promptly on request, such further information regarding the financial condition, assets and operations of any Security Party (including any requested amplification or explanation of any item in the financial statements, budgets or other material provided by any Security Party under this Agreement, any changes to management of the Borrower or the Guarantor and an up to date copy of its shareholders' register (or equivalent in its Original Jurisdiction)) as any Finance Party through the Agent may reasonably request; and

20.4.5 promptly on request, such further information as any Finance Party through the Agent may reasonably request.

20.5 Notification of default

20.5.3 The Borrower and the Guarantorshall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence.

20.5.4 Promptly upon a request by the Agent, the Borrower shall supply to the Agent a certificate signed by two of its directors or senior officers on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).

20.6 "Know your customer" checks

20.6.7 If:

(a) 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;

(b) any change in the status of a Security Party after the date of this Agreement; or

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

obliges the Agent or any Lender (or, in the case of Clause 20.6.1(c), 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, the Borrower shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any

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Lender (for itself or, in the case of the event described in Clause 20.6.1(c), on behalf of any prospective new Lender) in order for the Agent, such Lender or, in the case of the event described in Clause 20.6.1(c), any prospective new Lender to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents including without limitation obtaining, verifying and recording certain information and documentation that will allow the Agent and any Lender to identify each Security Party in accordance with the requirements to the Patriot Act.

20.6.8 Each Lender shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself) in order for the Agent to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

21 Financial Covenants

The following financial covenants shall apply to the Guarantor on a consolidated basis throughout the Facility Period, to be tested by reference to each set of its annual financial statements delivered pursuant to Clause 20.1.1 (Financial statements) and each set of its management accounts delivered pursuant to Clause 20.1.2 (Financial statements):

21.1 Minimum Liquidity Cash and Cash Equivalents shall at all times be the greater of (i) $50,000,000 or (ii) $850,000 per vessel owned by the Group (the “Minimum Liquidity”). For the purpose of this test, Cash and Cash Equivalents can include unutilised and freely available parts of revolving credit facilities with a maturity date in excess of 12 months after the date of the annual financial statements delivered pursuant to Clause 20.1.1 (Financial statements) or the set of management accounts delivered pursuant to Clause 20.1.2 (Financial statements) (as the case may be) provided that 66²/₃% of the Minimum Liquidity shall at all times consist of Cash.

21.2 Minimum Tangible Net Worth The Guarantor shall maintain a Consolidated Tangible Net Worth of not less than $500,000,000 plus (a) 25% of the Guarantor's cumulative, positive consolidated net income for each fiscal quarter commencing on or after 31 December 2013 and (b) 50% of the value of the equity proceeds realized from any issuance of equity interests in the Guarantor occurring on or after 31 December 2013.

21.3 Maximum Leverage A ratio of Net Debt to Consolidated Total Capitalisation of not more than 0.60 to 1.00.

21.4 Minimum Interest Coverage A ratio of Consolidated EBITDA to Consolidated Net Interest Expense calculated on a four quarter trailing basis greater than:

21.4.5 for the period commencing on 30 September 2015 to 3131 December 2016, 1.00 to 1.00;

21.4.6 for the period commencing on 1 January 2017 to 31 December 2017, 2.00 to 1.00; and

21.4.7 for the period commencing on 1 January 2018 for the remainder of the Facility period, 2.50 to 1.00.

Following the date of this Agreement, should US GAAP requirements materially change so as to impact the covenants detailed in this Clause 21, the Guarantor and the Agent shall discuss the required amendments to the covenants detailed in this Clause 21so as to reflect such changes to US GAAP.

The following definitions shall apply to this Clause 21:

“Cash” means any credit balance on any deposit, savings, current or other account, and any cash in hand held with banks or other financial institutions of the Group which is:

(a)freely withdrawable on demand;

21.4.8 not subject to any Encumbrance (other than pursuant to any Security Document);

21.4.9 denominated and payable in a freely transferable and freely convertible currency; and

21.4.10 capable of being remitted to the Group.

“Cash Equivalents” means:

(a) unencumbered securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof);

(b) time deposits, certificates of deposit or deposits (in each case, unencumbered) in the interbank market of any commercial bank of recognized standing organized under the laws of the United States of America, any state thereof or any foreign jurisdiction having capital and surplus in excess of $500,000,000; and

(c) such other securities or instruments as the Majority Lenders shall agree in writing,

and in respect of both (a) and (b) above, with a rating category of at least “A-” by Standard & Poor's Rating Services and “A” by Moody's Investors Service Limited (or the equivalent used by another rating agency) (provided that, in the case of (b) above only, such rating category shall not be applicable for time deposits, certificates of deposit or deposits (in each case, unencumbered) in the interbank market of any commercial bank which is a Lender), and in each case having maturities of not more than ninety (90) days from the date of acquisition.

“Consolidated EBITDA” means, for any accounting period, the consolidated net income of the Guarantor for that accounting period:

(a) plus, to the extent deducted in computing the net income of the Guarantor for that accounting period, the sum, without duplication, of:

(i)     all federal, state, local and foreign income taxes and tax distributions;

(ii) Consolidated Net Interest Expense;

(iii) depreciation, depletion, amortization of intangibles and other non-cash charges or non-cash losses (including non-cash transaction expenses and the amortization of debt discounts) and any extraordinary losses not incurred in the ordinary course of business;

(iv) expenses incurred in connection with a special or intermediate survey (including any underwater survey done in lieu thereof) of a vessel owned by the Group during such period; and

(v) any drydocking expenses;

(b) minus, to the extent added in computing the consolidated net income of the Guarantor for that accounting period, (i) any non-cash income or losses, non-cash gains or losses and (ii) any extraordinary gains or losses on asset sales not incurred in the ordinary course of business.

“Consolidated Funded Debt” means, for any accounting period, the sum of the following for the Guarantor determined (without duplication) on a consolidated basis for such period and in accordance with US GAAP consistently applied:

(a) all Financial Indebtedness; and

(a) all obligations to pay a specific purchase price for goods or services whether or not delivered or accepted (including take-or-pay and similar obligations which in accordance with US GAAP would be shown on the liability side of a balance sheet),

provided that balance sheet accruals for future dry docking expenses shall not be classified as Consolidated Funded Debt.

“ConsolidatedNet Interest Expense” means the aggregate of all interest, commissions, discounts and other costs, charges or expenses accruing that are due from the Guarantor and all of its Subsidiaries during the relevant accounting period less (i) interest income received, (ii) commitment fees and (iii) amortization of deferred charges and arrangement fees, determined on a consolidated basis in accordance with US GAAP and as shown in the consolidated statements of income for the Guarantor.

“Consolidated Tangible Net Worth” means, on a consolidated basis, the total shareholders’ equity (including retained earnings) of the Guarantor, minus goodwill.

“Consolidated Total Capitalization” means Consolidated Tangible Net Worth plus Consolidated Funded Debt.

“Net Debt” means Financial Indebtedness less Cash and Cash Equivalents.

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22 General Undertakings

The undertakings in this Clause 22 remain in force for the duration of the Facility Period.

22.1 Authorisations The Borrower and the Guarantor shall promptly:

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

22.1.8 supply certified copies to the Agent of,

any Authorisation required under any law or regulation of a Relevant Jurisdiction to:

(a) enable any Security Party to perform its obligations under the Finance Documents to which it is a party;

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

(c) enable any Security Party to carry on its business where failure to do so has or is reasonably likely to have a Material Adverse Effect.

22.2 Compliance with laws

The Borrower and the Guarantor shall comply (and shall procure that each other Security Party 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 anti-corruption laws, to which Clause 22.5 applies) failure so to comply has or is reasonably likely to have a Material Adverse Effect.

22.3 Environmental compliance

The Borrower and the Guarantor shall:

22.3.11 comply with all Environmental Laws;

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

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

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

22.4 Environmental Claims

The Borrower and the Guarantor shall promptly upon becoming aware of the same, inform the Agent in writing of:

22.4.9 any Environmental Claim against any of the Security Parties which is current, pending or threatened; and

22.4.10 any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any of the Security Parties,

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

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22.5 Anti-corruption law

22.5.1 The Borrower and the Guarantor shall not (and shall procure that no other Security Party will) directly or indirectly use the proceeds of the Loan for any purpose which would breach the Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other similar legislation in other jurisdictions.

22.5.2 The Borrower and the Guarantor shall (and shall procure that each other Security Party and each Affiliate of any of them shall):

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

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

22.6 Taxation

22.6.14 The Borrower and the Guarantor shall (and shall procure that each other Security Party 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:

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

(b) 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 Agent under Clause 20.1 (Financial statements); and

(c) 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.

22.6.15 Neither the Borrower nor the Guarantor may (and no other Security Party may) change its residence for Tax purposes.

22.7 Evidence of good standing The Borrower will from time to time if requested by the Agent provide the Agent with evidence in form and substance satisfactory to the Agent that the Security Parties and all corporate shareholders of any of the Security Parties remain in good standing.

22.8 Pari passu ranking The Borrower and the Guarantor shall ensure that at all times any unsecured and unsubordinated claims of a Finance Party against it under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.

22.9 Protection of Sinosure Policy

22.9.1 If at any time in the opinion of the Agent, the Sinosure Agent or Sinosure, any provision of a Finance Document contradicts or conflicts with any provision of the Sinosure Policy or Sinosure requires any further action to be taken or documents to be entered into for the Sinosure Policy to remain in full force and effect, the Borrower shall take such action as the Agent, the Sinosure Agent or Sinosure shall require to remove any contradiction or conflict and to ensure the Sinosure Policy remains in full force and effect.

22.9.2 Without prejudice to Clause 22.9.1, the Borrower and the Guarantor shall:

(a) take such action or refrain from taking such action as the Agent, the Sinosure Agent or Sinosure shall require in order to ensure that the beneficiaries under the Sinosure Policy

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to comply with and continue to benefit from the Sinosure Policy or to maintain the effectiveness of the Sinosure Policy; and

(b) not do or omit to do or cause anything to be done or omitted which might be contrary to or incompatible with the obligations undertaken by the Lenders under or in connection with the Sinosure Policy;

(c) execute all such documents and instruments and do all such other acts and things as Sinosure or any Finance Party may:

(i) reasonably require in order to comply with, and carry out the transactions contemplated by, the Finance Documents and any documents required to be delivered under the Finance Documents; and

(ii) require in order for the beneficiaries under the Sinosure Policy to comply with and continue to benefit from the Sinosure Policy or to maintain the effectiveness of the Sinosure Policy.

22.9.3    The Borrower will:

(a) cooperate with the Agent, the Sinosure Agent or the Lenders on their reasonable request to take all steps necessary on the part of the Borrower to ensure that the Sinosure Policy remains in full force and effect throughout the Facility Period; and

(b) use reasonable endeavours to assist the Sinosure Agent or the Lenders in making any claim under the Sinosure Policy to the extent they are able to.

22.9.4 The Borrower will promptly supply to the Sinosure Agent or the Lenders copies of all financial or other information reasonably required by the Sinosure Agent or the Lenders to satisfy any request for information made by Sinosure to the Sinosure Agent or the Lenders pursuant to the Sinosure Policy.

22.10 Negative pledge

In this Clause 22.10 "Quasi-Security" means an arrangement or transaction described in Clause 22.10.2.

Except as permitted under Clause 22.10.3:

22.10.1 the Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will) create nor permit to subsist any Encumbrance over any of its assets; and

22.10.2 the Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will):

(c) sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by a Security Party;

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

(e) 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

(f) enter into any other preferential arrangement having a similar effect,

in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.

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22.10.3 Clauses 22.10.1 and 22.10.2 do not apply to any Encumbrance or (as the case may be) Quasi-Security, which is a Permitted Encumbrance.

22.11 Disposals

22.11.1 Except as permitted under Clause 22.11.2, the Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will) without the prior written consent of the Agent 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.

22.11.2 Clause 22.11.1 does not apply to any sale, lease, transfer or other disposal which is a Permitted Disposal.

22.12 Arm's length basis

22.12.1 Except as permitted under Clause 22.12.2, the Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will) enter into any transaction with any person except on arm's length terms and for full market value.

22.12.2 Fees, costs and expenses payable under the Relevant Documents in the amounts set out in the Relevant Documents delivered to the Agent under Clause 4.1 (Initial conditions precedent) or agreed by the Agent shall not be a breach of this Clause 22.12.

22.13 Merger The Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will) enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction.

22.14 Change of business The Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will) make any substantial change to the general nature of its business from that carried on at the date of this Agreement.

22.15 No other business The Borrower shall not engage in any business other than the ownership, operation, chartering and management of the Vessel.

22.16 No acquisitions The Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will) 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.

22.17 No Joint Ventures The Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will):

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

22.17.2 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).

22.18 No borrowings The Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will) incur or allow to remain outstanding any Financial Indebtedness except for:

22.18.1 the Loan

22.18.2 any Intercompany Loans made available pursuant to an Intercompany Loan Agreement provided that:

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(d) the rights of any lender under such Intercompany Loan are (i) fully subordinated to the rights of the Finance Parties under the Finance Documents and (ii) assigned to the Security Agent pursuant to an Intercompany Subordination and Assignment Agreement; and

(e) the rights of the Borrower under such Intercompany Loan Agreement are assigned to the Security Agent pursuant to an Intercompany Loan Assignment,

and in each case any lender under such Intercompany Loan and the Borrower shall enter into such supporting and ancillary documentation in respect of such Intercompany Subordination and Assignment Agreement and Intercompany Loan Assignment as the Agent may reasonably request and the Agent shall be permitted to obtain such legal opinions in respect of such Intercompany Subordination and Assignment Agreement and Intercompany Loan Assignment as the Agent may reasonably require (the costs in respect of which shall be for the account of the Borrower);

22.18.3 under any Master Agreement; or

22.18.4 any Financial Indebtedness arising in the ordinary course of business in connection with the chartering, operation or repair of the Vessel.

22.19 No substantial liabilities Except in the ordinary course of business, the Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will) incur any liability to any third party which is in the Agent's opinion of a substantial nature.

22.20 No loans or credit The Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will) 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 the Vessel.

22.21 No guarantees or indemnities The Borrower shall not (and shall procure that no other Security Party (other than the Guarantor) will) incur or allow to remain outstanding any guarantee in respect of any obligation of any person.

22.22 No dividends or payments pursuant to Intercompany Loans In the event that an Event of Default is continuing or an Event of Default would result from undertaking of any of the below the Borrower shall not:

(a) 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 its share capital (or any class of its share capital);

(b) repay or distribute any dividend or share premium reserve;

(c) redeem, repurchase, defease, retire or repay any of its share capital or resolve to do so;

(d) issue any new shares in its share capital or resolve to do so; or

(e) make any payment or repayment pursuant to any Intercompany Loan or Intercompany Loan Agreement.

22.23 Inspection of records The Borrower and the Guarantor will permit the inspection of its financial records and accounts from time to time by the Agent or its nominee.

22.24 No change in Relevant Documents The Borrower and the Guarantor shall not (and shall procure that no other Security Party will) amend, vary, novate, supplement, supersede, waive or terminate any term of, any of the Relevant Documents which are not Finance Documents and excluding the MOA and the Management

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Agreement, or any other document delivered to the Agent pursuant to Clause 4.1 (Initial conditions precedent) or Clause 4.2 (Further conditions precedent) or Clause 4.3 (Conditions subsequent).

22.25 Further assurance

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

(a) 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 Security Agent or the Finance Parties provided by or pursuant to the Finance Documents or by law;

(b) to confer on the Security Agent or confer on the Finance Parties an Encumbrance over any property and assets of the Borrower (or that other Security Party 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

(c) to facilitate the realisation of the assets which are, or are intended to be, the subject of the Security Documents.

22.25.2 The Borrower and the Guarantor shall (and shall procure that each other Security Party 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 Security Agent or the Finance Parties by or pursuant to the Finance Documents.

^22.26  No dealings with Master Agreement The Borrower shall not assign, novate or encumber or in any other way transfer any of its rights or obligations under the Master Agreement, nor enter into any interest rate exchange or hedging agreement with anyone other than the Swap Provider.

^22.27  Permitted Transactions The Borrower shall not maintain outstanding Transactions the aggregate notional amount of which shall exceed the amount of the Loan from time to time.

^22.28  No change of ownership of the Borrower The Guarantor will not permit any change in the beneficial ownership or control of the Borrower from that advised to the Agent by the Borrower at the date of this Agreement and will procure that the Borrower will remain a wholly owned subsidiary of the Guarantor.

^22.29  Employees and ERISA Compliance Neither the Borrower nor the Guarantor shall employ any individuals, sponsor, maintain or become obligated to contribute to any Plan or any other pension scheme.  The Borrower and the Guarantor shall provide prompt written notice to the Agent in the event that the Borrower or the Guarantor becomes aware that it has incurred or is reasonably likely to incur any liability with respect to any Plan or any other pension scheme, that, individually or in the aggregate with any other such liability would be reasonably expected to have a Material Adverse Effect

22.30 Sanctions

22.30.1 The Borrower and the Guarantor:

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(a) each undertake that it, each Security Party, any other member of the Group, or any Affiliate of any of them, or any director, officer, agent, employee or person acting on behalf of any of the foregoing, is not a Restricted Person and does not act directly or indirectly on behalf of a Restricted Person;

(b) shall, and shall procure that each Security Party, each other member of the Group, and each Affiliate of any of them, shall, not use any revenue or benefit derived from any activity or dealing with a Restricted Person in discharging any obligation due or owing to the Finance Parties;

(c) shall procure that no proceeds from any activity or dealing with a Restricted Person are credited to any bank account held with any Finance Party in its name, in the name of any Security Party, in the name of any other member of the Group, or any Affiliate of any of them;

(d) each undertake that it, each Security Party, each other member of the Group, and each Affiliate of any of them, has taken reasonable measures to ensure compliance with Sanctions;

(e) shall, and shall procure that each Security Party and each other member of the Group shall, to the extent permitted by law promptly upon becoming aware of them supply to the Agent details of any claim, action, suit, proceedings or investigation against it with respect to Sanctions by any Sanctions Authority; and

(f) shall not accept, obtain or receive any goods or services from any Restricted Person, except (without limiting Clause 22.2 (Compliance with laws)), to the extent relating to any warranties and/or guarantees given and/or liabilities incurred in respect of an activity or dealing with a Restricted Person by a Security Party in accordance with this Agreement.

22.30.2 Each Party acknowledges and agrees that the Borrower and the Guarantor do not undertake the requirements under Clause 22.30.1 in favour of any Lender incorporated or having its registered office in the Federal Republic of Germany and no such Lender shall have any right thereunder and shall be deemed not to be a party to the provisions of this Clause 22.30.

22.31 Assignment of Claims The Guarantor shall not assign any claims that it may have against another Security Party, against the Vessel or in respect of a Relevant Document.

22.32 Use of proceeds

22.32.1 The Borrower and the Guarantor shall not, and shall procure that each Security Party, any other member of the Group, and any Affiliate of any of them, shall not, permit or authorise any other person to, directly or indirectly, use, lend, make payments of, contribute or otherwise make available, all or any part of the proceeds of the Loan or other transactions contemplated by this Agreement to fund or facilitate trade, business or other activities: (i) involving or for the benefit of any Restricted Person; or (ii) in any other manner that could result in any Security Party or a Finance Party being in breach of any Sanctions or becoming a Restricted Person.

22.32.2 Each Party acknowledges and agrees that the Borrower and the Guarantor do not undertake the requirements under Clause 22.32.1 in favour of any Lender incorporated or having its registered office in the Federal Republic of Germany and no such Lender shall have any right thereunder and shall be deemed not to be a party to the provisions of this Clause 22.32.

23 Events of Default

23.1 Events of Default Each of the events or circumstances set out in this Clause 23.1 is an Event of Default.

23.1.6 Non-payment A Security Party 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:

(a) its failure to pay is caused by:

(i) administrative or technical error; or

(ii) a Disruption Event; and

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

23.1.7 Other specific obligations

(d) Any requirement of Clause 21 (Financial Covenants) is not satisfied.

(e) A Security Party does not comply with any obligation in a Finance Document relating to the Insurances or with Clause 17.14 (Additional security).

23.1.8 Other obligations

(a) A Security Party does not comply with any provision of a Finance Document (other than those referred to in Clause 23.1.1 (Non-payment) and Clause 23.1.2 (Other specific obligations).

(b) No Event of Default under this Clause 23.1.3 will occur if the failure to comply is capable of remedy and is remedied within ten Business Days of the earlier of (i) the Agent giving notice to the Borrower and (ii) the Borrower becoming aware of the failure to comply.

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

23.1.10 Cross default Any Financial Indebtedness of the Borrower or the Guarantor:

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

(h) 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

(i) 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.

No Event of Default will occur under this Clause 23.1.5 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within (a) to (c) is either (i) in the case of the Borrower, less than $500,000 or its equivalent in any other currency or currencies (unless such sum is being contested in good faith) or (ii) in the case of the Guarantor, less than $10,000,000 or its equivalent in any other currency or currencies (unless such sum is being contested in good faith).

23.1.11 Insolvency

(d) The Borrower or Guarantor 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.

(e) The value of the assets of a Security Party is less than its liabilities (taking into account contingent and prospective liabilities).

(f) A moratorium is declared in respect of any indebtedness of a Security Party. If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.

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

(a) 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 the Borrower or the Guarantor;

(b) a composition, compromise, assignment or arrangement with any creditor of the Borrower or the Guarantor;

(c) the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager, or trustee or other similar officer in respect of the Borrower or the Guarantor or any of its assets; or

(d) enforcement of any Encumbrance over any assets of the Borrower or the Guarantor,

or any analogous procedure or step is taken in any jurisdiction.

This Clause 23.1.7 shall not apply to any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within five days of commencement.

23.1.13 Creditors' process Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of a Security Party.

23.1.14 Unlawfulness and invalidity

(a) It is or becomes unlawful for a Security Party to perform any of its obligations under the Finance Documents or any Encumbrance created or expressed to be created or evidenced by the Security Documents ceases to be effective.

(b) Any obligation or obligations of any Security Party under any Finance Documents 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 Lenders under the Finance Documents.

(c) 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 a Finance Party) to be ineffective.

23.1.15 Cessation of business The Borrower or the Guarantor ceases, or threatens to cease, to carry on all or a substantial part of its business.

23.1.16 Change in ownership or control of the Borrower The Borrower ceases to be ultimately owned and controlled by the Guarantor or ceases to be a wholly owned subsidiary of the Guarantor.

23.1.17 Expropriation The authority or ability of the Borrower or the Guarantor to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to the Borrower or the Guarantor or any of its assets.

23.1.18 Repudiation and rescission of agreements

(f) A Security Party 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.

(g) Subject to Clause 23.1.13(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 Majority Lenders, likely to have a material adverse effect on the interests of the Lenders under the Finance Documents.

(h) The Management Agreementis 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 Majority Lenders.

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

23.1.20 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 Security Parties or any other person (except a Finance Party) 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 Agent considers is, or may be, prejudicial to the interests of any Finance Party, or ceases to remain in full force and effect.

23.1.21 Reduction of capital The Borrower reduces its authorised or issued or subscribed capital.

23.1.22 Loss of Vessel The 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 Security Agent 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 23.1.17 include an event similar to a Total Loss in relation to any other vessel) shall not be an Event of Default if:

(a) the 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

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

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

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

This Clause 23.1.18 shall not apply to any challenge or contest which is frivolous or vexatious and is discharged, stayed or dismissed within five days of commencement.

23.1.24 War The country of registration of the Vessel becomes involved in war (whether or not declared) or civil war or is occupied by any other power and the Agent in its discretion considers that, as a result, the security conferred by any of the Security Documents is materially prejudiced.

No Event of Default under this Clause 23.1.19 will occur if within ten Business Days of the earlier of (i) the Agent giving notice to the Borrower and (ii) the Borrower becoming aware of such events and circumstances described in this Clause 23.1.19 occurring, the Borrower registers the Vessel under a different flag acceptable to the Agent (acting reasonably), registers a Mortgage over the Vessel with first priority in favour of the Security Agent (such Mortgage being in a form and substance acceptable to the Agent (acting reasonably)) and provides such supporting corporate authorisations, legal opinions and other supporting documents reasonably requested by the Agent.

^23.1.25  Master Agreement termination A notice is given by the Swap Provider under section 6(a) of the Master Agreement, or by any person under section 6(b)(iv) of the Master Agreement, in either case designating an Early Termination Date for the purpose of the Master Agreement, or the Master Agreement is for any other reason terminated, cancelled, suspended, rescinded, revoked or otherwise ceases to remain in full force and effect.

This Clause 23.1.20 shall not apply to any Transactions that are terminated pursuant to Clause 7.8 (Restrictions).

^23.1.26  Notice of determination The Guarantor gives notice to the Security Agent to determine any obligations under the Guarantee.

23.1.27 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 a Security Party or its assets which have or are reasonably likely to have a Material Adverse Effect.

This Clause 23.1.22 shall not apply to any litigation, arbitration, administrative, governmental, regulatory or other investigations, proceedings or disputes which are frivolous or vexatious and is discharged, stayed or dismissed within 30 days of commencement.

23.1.28 Material adverse change Any event or circumstance occurs which the Majority Lenders reasonably believe has or is reasonably likely to have a Material Adverse Effect.

23.1.29 Sanctions

(g) Any of the Security Parties 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.

(h) 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.

(i) Any of the Security Parties or any Affiliate of any of them is not in compliance with all Sanctions.

23.2 Acceleration On and at any time after the occurrence of an Event of Default which is continuing the Agent may, and shall if so directed by the Majority Lenders:

23.2.14 by notice to the Borrower cancel the Total Commitments, at which time they shall immediately be cancelled;

23.2.15 by notice to the Borrower 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;

23.2.16 by notice to the Borrower declare that the Loan is payable on demand, at which time it shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders; and/or

23.2.17 exercise or direct the Security Agent to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents.

23.3 Sinosure The Agent agrees that it will consult with Sinosure and the Sinosure Agent prior to issuing a notice pursuant to Clause 23.2 (Acceleration).

Section 9 Changes to Parties

24 Changes to the Lenders

24.1 Assignments and transfers by the Lenders Subject to this Clause 24, a Lender (the "Existing Lender") may:

24.1.18 assign any of its rights; or

24.1.19 transfer by novation any of its rights and obligations,

under any Finance Document to another bank or financial institution which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets or to Sinosure pursuant to Clause 17.12 (Sinosure Insurance Proceeds) (the "New Lender").

24.2 Conditions of assignment or transfer

24.2.11 An Existing Lender must obtain the prior written consent of Sinosure before it may make an assignment or transfer in accordance with Clause 24.1 (Assignments and transfers by the Lenders).

24.2.12 An assignment will only be effective on:

(d) receipt by the Agent of written confirmation from the New Lender (in form and substance satisfactory to the Agent) that the New Lender will assume the same obligations to the other Finance Parties as it would have been under if it was an Original Lender; and

(e) performance by the Agent of all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to such assignment to a New Lender, the completion of which the Agent shall promptly notify to the Existing Lender and the New Lender.

24.2.13 A transfer will only be effective if the procedure set out in Clause 24.5 (Procedure for transfer) is complied with.

24.2.14 If:

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

(b) as a result of circumstances existing at the date the assignment, transfer or change occurs, the Borrower would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 12 (Tax Gross Up and Indemnities) or Clause 13 (Increased Costs),

then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred. This Clause 24.2.4 shall not apply in respect of an assignment or transfer made in the ordinary course of the primary syndication of the Loan.

24.2.15 Each New Lender confirms, for the avoidance of doubt, that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the transfer or assignment becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender.

24.3 Assignment or transfer fee Unless the Agent otherwise agrees and excluding an assignment or transfer (i) to an Affiliate of a Lender, (ii) to a Related Fund or (iii) made in connection with primary syndication of the Loan, the New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Agent (for its own account) a fee of $3,000.

24.4 Limitation of responsibility of Existing Lenders

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

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

(b) the financial condition of any Security Party;

(c) the performance and observance by any Security Party of its obligations under the Relevant Documents or any other documents; or

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

and any representations or warranties implied by law are excluded.

24.4.17 Each New Lender confirms to the Existing Lender and the other Finance Parties that it:

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

(g) will continue to make its own independent appraisal of the creditworthiness of each Security Party and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.

24.4.18 Nothing in any Finance Document obliges an Existing Lender to:

(d) accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause 24; or

(e) support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Security Party of its obligations under the Relevant Documents or otherwise.

24.5 Procedure for transfer

24.5.1 Subject to the conditions set out in Clause 24.2 (Conditions of assignment or transfer) a transfer is effected in accordance with Clause 24.5.3 when the Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to Clause 24.2.2(b), as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate.

24.5.2 The Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the transfer to such New Lender.

24.5.3 Subject to Clause 24.9 (Pro rata interest settlement), on the Transfer Date:

(c) to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents the Borrower and the Guarantor and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and their respective rights against one another shall be cancelled (being the "Discharged Rights and Obligations");

(d) the Borrower and the Guarantorand the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as the Borrower and the Guarantor and the New Lender have assumed and/or acquired the same in place of the Borrower and the Guarantorand the Existing Lender;

(e) the Agent, the Security Agent, the Arranger, the Sinosure Agent, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Agent, the Security Agent, the Arranger, the Sinosure Agent, and the Existing Lender shall each be released from further obligations to each other under this Agreement; and

(f) the New Lender shall become a Party as a "Lender".

24.6 Procedure for assignment

24.6.1 Subject to the conditions set out in Clause 24.2 (Conditions of assignment or transfer) an assignment may be effected in accordance with Clause 24.6.3 when the Agent executes an otherwise duly completed Assignment Agreement delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to Clause 24.6.2, as soon as reasonably practicable after receipt by it of a duly completed Assignment Agreement appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Assignment Agreement.

24.6.2 The Agent shall only be obliged to execute an Assignment Agreement delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary "know your customer" or similar checks under all applicable laws and regulations in relation to the assignment to such New Lender.

24.6.3 Subject to Clause 24.9 (Pro rata interest settlement), on the Transfer Date:

(d) the Existing Lender will assign absolutely to the New Lender its rights under the Finance Documents and in respect of any Encumbrance created or expressed to be created or evidenced by the Security Documents and expressed to be the subject of the assignment in the Assignment Agreement;

(e) the Existing Lender will be released from the obligations (the "Relevant Obligations") expressed to be the subject of the release in the Assignment Agreement (and any corresponding obligations by which it is bound in respect of any Encumbrance created or expressed to be created or evidenced by the Security Documents); and

(f) the New Lender shall become a Party as a "Lender" and will be bound by obligations equivalent to the Relevant Obligations.

24.6.4 Lenders may utilise procedures other than those set out in this Clause 24.6 to assign their rights under the Finance Documents (but not, without the consent of the relevant Security Party or unless in accordance with Clause 24.5 (Procedure for transfer), to obtain a release by that Security Party from the obligations owed to that Security Party by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that they comply with the conditions set out in Clause 24.2 (Conditions of assignment or transfer).

24.7 Copy of Transfer Certificate or Assignment Agreement to Borrower The Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate or an Assignment Agreement, send to the Borrower a copy of that Transfer Certificate or Assignment Agreement.

24.8 Security over Lenders' rights In addition to the other rights provided to Lenders under this Clause 24, each Lender may without consulting with or obtaining consent from any Security Party, at any time charge, assign or otherwise create Encumbrances in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:

24.8.4 any charge, assignment or other Encumbrance to secure obligations to a federal reserve or central bank; and

24.8.5 in the case of any Lender which is a fund, any charge, assignment or other Encumbrance granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities,

except that no such charge, assignment or Encumbrance shall:

(a) release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Encumbrance for the Lender as a party to any of the Finance Documents; or

(b) require any payments to be made by a Security Party other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents.

24.9 Pro rata interest settlement

24.9.3 If the Agent has notified the Lenders that it is able to distribute interest payments on a "pro rata basis" to Existing Lenders and New Lenders then (in respect of any transfer pursuant to Clause 24.5 (Procedure for transfer) or any assignment pursuant to Clause 24.6 (Procedure for assignment) the Transfer Date of which is after the date of such notification and is not on the last day of an Interest Period):

(e) any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date ("Accrued Amounts") and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than three months, on the next of the dates which falls at three monthly intervals after the first day of that Interest Period); and

(f) the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt:

(i) when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and

(ii) the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 24.9, have been payable to it on that date, but after deduction of the Accrued Amounts.

24.9.4 In this Clause 24.9 references to "Interest Period" shall be construed to include a reference to any other period for accrual of fees.

25 Changes to the Security Parties

25.1 No assignment or transfer by Security Parties No Security Party may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.

Section 10 The Finance Parties

26 Role of the Agent, the Security Agent, the Sinosure Agent and the Arranger

26.1 Appointment of the Agent, the Security Agent and the Sinosure Agent

26.1.3 Each of the Arranger, the Sinosure Agent and the Lenders appoints the Agent to act as its agent under and in connection with the Finance Documents and each of the Arranger, the Sinosure Agent, the Lenders and the Agent appoints the Security Agent to act as its security agent for the purpose of the Security Documents.

26.1.4 Each of the Arranger, the Sinosure Agent and the Lenders authorises the Agent and each of the Arranger, the Sinosure Agent, the Lenders and the Agent authorises the Security Agent to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Agent or the Security Agent (as the case may be) under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions.

^26.1.5  The Swap Provider appoints the Security Agent to act as its security agent for the purpose of the Security Documents and authorises the Security Agent to exercise the rights, powers, authorities and discretions specifically given to the Security Agent under or in connection with the Security Documents together with any other incidental rights, powers, authorities and discretions.

^26.1.6  Except in Clause 26.15 (Replacement of the Agent) and Clause 26.22 (Period without role for Agent) or where the context otherwise requires, references in this Clause 26 to the "Agent" shall mean the Agent, the Security Agent individually and collectively and references in this Clause 26 to the "Finance Documents" or to any "Finance Document" shall not include the Master Agreement.

^26.1.7  Each Lender hereby appoints and authorises the Sinosure Agent to act as its agent in connection herewith and for all purposes under the Sinosure Policy, with power to take all actions on behalf of the Lenders under the Sinosure Policy.

26.2 Instructions

26.2.19 The Agent shall:

(a) unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Agent in accordance with any instructions given to it by:

(i) all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and

(ii) in all other cases, the Majority Lenders; and

(b) not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with Clause 26.2.1(a).

26.2.20 The Agent shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Lender or group of Lenders, the Sinosure Agent or Sinosure, from that Lender, group of Lenders, the Sinosure Agent or Sinosure) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Agent may refrain from acting unless and until it receives any such instructions or clarification that it has requested.

26.2.21 Save in the case of decisions stipulated to be a matter for any other Lender, group of Lenders, the Sinosure Agent or Sinosure under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.

26.2.22 The Agent may refrain from acting in accordance with any instructions of any Lender or group of Lenders, the Sinosure Agent or Sinosure until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability which it may incur in complying with those instructions.

26.2.23 In the absence of instructions, the Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders.

26.2.24 The Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender's consent) in any legal or arbitration proceedings relating to any Finance Document. This Clause 26.2.6 shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Finance Documents or the enforcement of the Finance Documents.

26.3 Duties of the Agent

26.3.4 The Agent's duties under the Finance Documents are solely mechanical and administrative in nature.

26.3.5 Subject to Clause 26.3.3, the Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent for that Party by any other Party.

26.3.6 Without prejudice to Clause 24.7 (Copy of Transfer Certificate or Assignment Agreement to Borrower), Clause 26.3.1 shall not apply to any Transfer Certificate or any Assignment Agreement.

26.3.7 Except where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.

26.3.8 If the Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the Finance Parties.

26.3.9 If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent, the Arranger, the Sinosure Agent or the Security Agent) under this Agreement it shall promptly notify the other Finance Parties.

26.3.10 The Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied).

26.4 Role of the Arranger Except as specifically provided in the Finance Documents, the Arranger has no obligations of any kind to any other Party under or in connection with any Finance Document.

26.5 No fiduciary duties

26.5.5 Subject to Clause 26.12 (Trust) which relates to the Security Agent only, nothing in any Finance Document constitutes the Agent, the Sinosure Agent or the Arranger as a trustee or fiduciary of any other person.

26.5.6 Neither the Agent, the Sinosure Agent nor the Arranger shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.

26.6 Business with Security Parties The Agent, the Sinosure Agent and the Arranger may accept deposits from, lend money to and generally engage in any kind of banking or other business with the Borrower and any other Security Party or its Affiliate.

26.7 Rights and discretions of the Agent

26.7.5 The Agent may:

(f) rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;

(g) assume that:

(i) any instructions received by it from the Majority Lenders, any Lenders or any group of Lenders are duly given in accordance with the terms of the Finance Documents; and

(ii) unless it has received notice of revocation, that those instructions have not been revoked; and

(iii) rely on a certificate from any person:

(A) as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or

(B) to the effect that such person approves of any particular dealing, transaction, step, action or thing,

as sufficient evidence that that is the case and, in the case of (A), may assume the truth and accuracy of that certificate.

26.7.6 The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders or security agent for the Finance Parties (as the case may be)) that:

(a) no Default has occurred (unless it has actual knowledge of a Default arising under Clause 23.1 (Events of Default));

(b) any right, power, authority or discretion vested in any Party or the Majority Lenders has not been exercised; and

(c) any notice or request made by the Borrower (other than a Drawdown Request) is made on behalf of and with the consent and knowledge of all the Security Parties.

26.7.7 The Agent may engage and pay for the advice or services of any lawyers, accountants, surveyors or other experts.

26.7.8 Without prejudice to the generality of Clause 26.7.3 or Clause 26.7.5, the Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Agent (and so separate from any lawyers instructed by the Lenders) if the Agent in its reasonable opinion deems this to be desirable.

26.7.9 The Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying.

26.7.10 The Agent may act in relation to the Finance Documents through its officers, employees and agents and the Agent shall not:

(a) be liable for any error of judgment made by any such person; or

(b) be bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct, omission or default on the part, of any such person,

unless such error or such loss was directly caused by the Agent's gross negligence or wilful misconduct.

26.7.11 Unless a Finance Document expressly provides otherwise the Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.

26.7.12 Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor the Arranger is obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.

26.7.13 The Agent is not obliged to disclose to any Finance Party any details of the rate notified to the Agent by any Lender or the identity of any such Lender for the purpose of Clause 10.2.2 (Market Disruption).

26.7.14 Notwithstanding any provision of any Finance Document to the contrary, the Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.

26.8 Responsibility for documentation Neither the Agent nor the Arranger is responsible or liable for:

26.8.3 the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent, the Arranger, a Security Party or any other person given in or in connection with any Relevant Document or the transactions contemplated in the Finance Documents; or

26.8.4 the legality, validity, effectiveness, adequacy or enforceability of any Relevant Document or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with any Relevant Document; or

26.8.5 any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.

26.9 No duty to monitor The Agent shall not be bound to enquire:

26.9.1 whether or not any Default has occurred;

26.9.2 as to the performance, default or any breach by any Party of its obligations under any Finance Document; or

26.9.3 whether any other event specified in any Finance Document has occurred.

26.10 Exclusion of liability

26.10.1 Without limiting Clause 26.10.2 (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Agent) the Agent shall not be liable (including, without limitation, for negligence or any other category of liability whatsoever) for:

(c) any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Finance Document or any Encumbrance created or expressed to be created or evidenced by the Security Documents, unless directly caused by its gross negligence or wilful misconduct;

(d) exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Finance Document, any Encumbrance created or expressed to be created or evidenced by the Security Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Finance Document or any Encumbrance created or expressed to be created or evidenced by the Security Documents;

(e) any shortfall which arises on the enforcement or realisation of the Trust Property; or

(f) without prejudice to the generality of Clauses 26.10.1(a), 26.10.1(b) and 26.10.1(c), any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:

(i) any act, event or circumstance not reasonably within its control; or

(ii) the general risks of investment in, or the holding of assets in, any jurisdiction,

including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of: nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.

26.10.2 No Party (other than the Agent) may take any proceedings against any officer, employee or agent of the Agent in respect of any claim it might have against the Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Relevant Document and any officer, employee or agent of the Agent may rely on this Clause subject to Clause 1.7 (Third Party Rights) and the provisions of the Third Parties Act.

26.10.3 The Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Agent if the Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Agent for that purpose.

26.10.4 Nothing in this Agreement shall oblige the Agent or the Arranger to carry out:

(c) any "know your customer" or other checks in relation to any person;

(d) any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Lender,

on behalf of any Lender and each Lender confirms to the Agent and the Arranger that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Agent or the Arranger.

26.10.5 Without prejudice to any provision of any Finance Document excluding or limiting the Agent's liability, any liability of the Agent arising under or in connection with any Finance Document or any Encumbrance created or expressed to be created or evidenced by the Security Documents shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Agent or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Agent at any time which increase the amount of that loss. In no event shall the Agent be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Agent has been advised of the possibility of such loss or damages.

26.11 Lenders' indemnity to the Agent

26.11.1 Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Agent and every Receiver and Delegate, within three Business Days of demand, against any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by any of them (otherwise than by reason of the relevant Agent's, Receiver's or Delegate's gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 30.12 (Disruption to payment systems etc.)notwithstanding the Agent's negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) in acting as Agent, Receiver or Delegate under, or exercising any authority conferred under, the Finance Documents (unless the relevant Agent, Receiver or Delegate has been reimbursed by a Security Party pursuant to a Finance Document).

26.11.2 Subject to Clause 26.11.3, the Borrower shall immediately on demand reimburse any Lender for any payment that Lender makes to the Agent pursuant to Clause 26.11.1

26.11.3 Clause 26.11.2 shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the Agent to a Security Party.

26.12 Trust The Security Agent agrees and declares, and each of the other Finance Parties acknowledges, that, subject to the terms and conditions of this Clause 26.12, the Security Agent holds the Trust Property on trust for the Finance Parties absolutely. Each of the other Finance Parties agrees that the obligations, rights and benefits vested in the Security Agent shall be performed and exercised in accordance with this Clause 26.12. The Security Agent shall have the benefit of all of the provisions of this Agreement benefiting it in its capacity as security agent for the Finance Parties, and all the powers and discretions conferred on trustees by the Trustee Act 1925 (to the extent not inconsistent with this Agreement). In addition:

26.12.1 the Security Agent and any Delegate may indemnify itself or himself out of the Trust Property against all liabilities, costs, fees, damages, charges, losses and expenses sustained or incurred by it or him in relation to the taking or holding of any of the Trust Property or in connection with the exercise or purported exercise of the rights, trusts, powers and discretions vested in the Security Agent or any Delegate by or pursuant to the Security Documents or in respect of anything else done or omitted to be done in any way relating to the Security Documents;

26.12.2 the other Finance Parties acknowledge that the Security Agent shall be under no obligation to insure any property nor to require any other person to insure any property and shall not be responsible for any loss which may be suffered by any person as a result of the lack or insufficiency of any insurance;

26.12.3 the Finance Parties agree that the perpetuity period applicable to the trusts declared by this Agreement shall be the period of 125 years from the date of this Agreement;

26.12.4 the Security Agent shall not be liable for any failure, omission, or defect in perfecting the security constituted or created by any Finance Document including, without limitation, any failure to register the same in accordance with the provisions of any of the documents of title of any Security Party to any of the assets thereby charged or effect or procure registration of or otherwise protect the security created by any Security Document under any registration laws in any jurisdiction and may accept without enquiry such title as any Security Party may have to any asset;

26.12.5 the Security Agent shall not be under any obligation to hold any title deed, Finance Document or any other documents in connection with the Finance Documents or any other documents in connection with the property charged by any Finance Document or any other such security in its own possession or to take any steps to protect or preserve the same, and may permit any Security Party to retain all such title deeds, Finance Documents and other documents in its possession; and

26.12.6 save as otherwise provided in the Finance Documents, all moneys which under the trusts therein contained are received by the Security Agent may be invested in the name of or under the control of the Security Agent in any investment for the time being authorised by English law for the investment by trustees of trust money or in any other investments which may be selected by the Security Agent, and the same may be placed on deposit in the name of or under the control of the Security Agent at such bank or institution (including the Security Agent) and upon such terms as the Security Agent may think fit.

The provisions of Part I of the Trustee Act 2000 shall not apply to the Security Agent or the Trust Property.

26.13 Parallel Debt

26.13.3     Notwithstanding any other provision of this Agreement, the Borrower and the Guarantor hereby irrevocably and unconditionally undertake to pay to the Security Agent as creditor in its own right and not as representative of the other Finance Parties, sums equal to and in the currency of each amount payable by the Borrower or the Guarantor (as the case may be) to each of the Finance Parties under each of the Finance Documents as and when that amount falls due for payment under the relevant Finance Document (the "Parallel Debt"). Any security granted to secure such Parallel Debt shall not be held on trust by the Security Agent.

26.13.4     The Security Agent shall have its own independent right to demand payment of the amounts payable by the Borrower and the Guarantor (including, without limitation, through any suit, execution, enforcement of security, recovery of guarantees and applications for and voting in any kind of insolvency proceeding) under this Clause 26.

26.13.5     Any amount due and payable by the Borrower or the Guarantor (as the case may be) to the Security Agent under this Clause 26 shall be decreased to the extent that the other Finance Parties have received payment in full or in part (which payment has not been rescinded or otherwise restored or returned) of the corresponding amount under the other provisions of the Finance Documents, and any amount due and payable by the Borrower or the Guarantor (as the case may be) to the other Finance Parties under those provisions shall be decreased to the extent that the Security Agent has received payment in full or in part (which payment has not been rescinded or otherwise restored or returned) of the corresponding amount under this Clause 26.

26.14 Resignation of the Agent

26.14.5 The Agent may resign and appoint one of its Affiliates acting through an office as successor by giving notice to the other Finance Parties, Sinosure and the Borrower.

26.14.6 Alternatively the Agent may resign by giving 30 days' notice to the other Finance Parties, Sinosure and the Borrower, in which case the Majority Lenders (after consultation with the Borrower) may appoint a successor Agent.

26.14.7 If the Majority Lenders have not appointed a successor Agent in accordance with Clause 26.14.2 within 20 days after notice of resignation was given, the retiring Agent (after consultation with the Borrower) may appoint a successor Agent.

26.14.8 If the Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent and the Agent is entitled to appoint a successor Agent under Clause 26.14.3, the Agent may (if it concludes (acting reasonably) that it is necessary to do so in order to persuade the proposed successor Agent to become a party to this Agreement as Agent) agree with the proposed successor Agent amendments to this Clause 26 and any other term of this Agreement dealing with the rights or obligations of the Agent consistent with then current market practice for the appointment and protection of corporate trustees.

26.14.9 The retiring Agent shall, make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents. The Borrower shall, within three Business Days of demand, reimburse the retiring Agent for the amount of all costs and expenses (including legal fees) properly incurred by it in making available such documents and records and providing such assistance.

26.14.10 The Agent's resignation notice shall only take effect upon the appointment of a successor and (in the case of the Security Agent) the transfer of all the Trust Property to that successor.

26.14.11 Upon the appointment of a successor, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under Clause 26.14.5) but shall remain entitled to the benefit of Clause 14.3 (Indemnity to the Agent) and this Clause 26. Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

26.14.12 The Agent shall resign in accordance with Clause 26.14.2 (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Agent pursuant to Clause 26.14.3) if on or after the date which is three months before the earliest FATCA Application Date relating to any payment to the Agent under the Finance Documents, either:

(a) the Agent fails to respond to a request under Clause 12.7 (FATCA information) and a Lender reasonably believes that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

(b) the information supplied by the Agent pursuant to Clause 12.7 (FATCA information) indicates that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or

(c) the Agent notifies the Borrower and the Lenders that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

and (in each case) a Lender reasonably believes that a Party will be required to make a FATCA Deduction that would not be required if the Agent were a FATCA Exempt Party, and that Lender, by notice to the Agent, requires it to resign.

26.15 Replacement of the Agent

26.15.1 After consultation with the Borrower, the Majority Lenders may, by giving 30 days' notice to the Agent (or, at any time the Agent is an Impaired Agent, by giving any shorter notice determined by the Majority lenders) replace the Agent by appointing a successor Agent.

26.15.2 The retiring Agent shall (at its own cost if it is an Impaired Agent and otherwise at the expense of the Lenders) make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its function as Agent under the Finance Documents.

26.15.3 The appointment of the successor Agent shall take effect on the date specified in the notice from the Majority Lenders to the retiring Agent. As from this date, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under Clause 26.15.2 but shall remain entitled to the benefit of Clause 14.3 (Indemnity to the Agent) and this Clause 26.

26.15.4 Any successor Agent and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

26.16 Confidentiality

26.16.1 In acting as agent for the Finance Parties, the Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.

26.16.2 If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent shall not be deemed to have notice of it.

26.16.3 Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor the Arranger is obliged to disclose to any other person (i) any Confidential Information or (ii) any other information if the disclosure would or might in its reasonable opinion constitute a breach of any laws or a breach of a fiduciary duty.

26.17 Relationship with the Lenders

26.17.1 Subject to Clause 24.9 (Pro rata interest settlement), the Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Agent's principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office:

(e) entitled to or liable for any payment due under any Finance Document on that day; and

(f) entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,

unless it has received not less than five Business Days' prior notice from that Lender to the contrary in accordance with the terms of this Agreement.

26.17.2 Each Lender shall supply the Agent with any information required by the Agent in order to calculate the Mandatory Cost in accordance with Schedule 4 (Mandatory Cost Formula).

26.17.3 Any Lender may by notice to the Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or dispatched to that Lender under the Finance Documents. Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under Clause 32.6 (Electronic communication)) electronic mail address and/or any other information required to enable the sending and receipt of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, fax number, electronic mail address, department and officer by that Lender for the purposes of Clause 32.2 (Addresses) and Clause 32.6.1(b) (Electronic communication) and the Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.

26.18 Credit appraisal by the Lenders Without affecting the responsibility of any Security Party for information supplied by it or on its behalf in connection with any Relevant Document, each Lender confirms to the Agent and the Arranger that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Relevant Document including but not limited to:

26.18.2 the financial condition, status and nature of each Security Party;

26.18.3 the legality, validity, effectiveness, adequacy or enforceability of any Relevant Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Relevant Document;

26.18.4 whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Relevant Document, the transactions contemplated by the Relevant Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of under or in connection with any Relevant Document; and

26.18.5 the right or title of any person in or to, or the value or sufficiency of any part of the Charged Property, the priority of any Encumbrance created or expressed to be created or evidenced by the Security Documents or the existence of any Encumbrance affecting the Charged Property.

26.19 Reference Banks If a Reference Bank ceases to be a Lender, the Agent shall (in consultation with the Borrower) appoint another bank to be a Reference Bank to replace that Reference Bank.

26.20 Agent's management time Any amount payable to the Agent under Clause 14.3 (Indemnity to the Agent), Clause 14.4 (Indemnity to the Security Agent), Clause 16 (Costs and expenses) and Clause 26.11 (Lenders' indemnity to the Agent) shall include the cost of utilising the Agent's management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Agent may notify to the Borrower and the Lenders, and is in addition to any fee paid or payable to the Agent under Clause 11 (Fees).

26.21 Deduction from amounts payable by the Agent If any Party owes an amount to the Agent under the Finance Documents the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.

26.22 Period without role for Agent

26.22.1 In this Clause 26.22, a "Non-Agent Period" means the period in which the Agent has no role pursuant to Clause 26.22.2.

26.22.2 The Agent shall not have a role under this Agreement, other than entering into the Finance Documents in its capacity as Agent, and the other provisions of this Clause 26 shall not apply to the extent that they relate to the Agent if and for as long as each of the following conditions are met:

(a) the only Lender is the Original Lender; and

26.22.3 no Default is continuing nor has the Original Lender (acting reasonably) determined that a Default has occurred and is continuing and the Original Lender has notified the Borrower in writing that it has instructed the Agent to commence acting in its role as the Agent.

26.22.4 During a Non-Agent Period:

(d) subject to Clause 26.22.3(c), all references to "the Agent" (other than in this Clause 26.22) and all references to "an Agent", or "a Party" in any Finance Document shall, where it relates to the Agent, be construed as references to "the Original Lenders" or "the Original Lender";

(e) all payments which are expressed to be made to, received by or    made available to or by the Agent (as applicable), must be made to, received by or made available to or by the Original Lender; and

(f) the reference to "the Agent" in:

(i) Clause 26.8 (Responsibility for documentation) to and including Clause 26.11 (Lenders' indemnity to the Agent);

(ii) Clause 14.2 (Other indemnities); and

(iii) Clause 16 (Costs and Expenses),

must at all times be construed as reference to each of the Agent and the Original Lender in its former and/or existing role of the Agent pursuant to Clause 26.22.3(a).

27 Conduct of Business by the Finance Parties

No provision of this Agreement will:

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

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

27.3 oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.

28 Sharing among the Finance Parties

28.1 Payments to Finance Parties If a Finance Party (a "Recovering Finance Party") receives or recovers any amount from a Security Party other than in accordance with Clause 30 (Payment Mechanics) (a "Recovered Amount") and applies that amount to a payment due under the Finance Documents then:

28.1.11 the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery, to the Agent;

28.1.12 the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Agent and distributed in accordance with Clause 30 (Payment Mechanics), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and

28.1.13 the Recovering Finance Party shall, within three Business Days of demand by the Agent, pay to the Agent an amount (the "Sharing Payment") equal to such receipt or recovery less any amount which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 30.6 (Partial payments).

28.2 Redistribution of payments The Agent shall treat the Sharing Payment as if it had been paid by the relevant Security Party and distribute it between the Finance Parties (other than the Recovering Finance Party) (the "Sharing Finance Parties") in accordance with Clause 30.6 (Partial payments) towards the obligations of that Security Party to the Sharing Finance Parties.

28.3 Recovering Finance Party's rightsOn a distribution by the Agent under Clause 28.2 (Redistribution of payments) of a payment received by a Recovering Finance Party from a Security Party, as between the relevant Security Party and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Security Party.

28.4 Reversal of redistribution If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:

28.4.6 each Sharing Finance Party shall, upon request of the Agent, pay to the Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the "Redistributed Amount"); and

28.4.7 as between the relevant Security Party and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Security Party.

28.5 Exceptions

28.5.15 This Clause 28 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the relevant Security Party.

28.5.16 A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if:

(a) it notified that other Finance Party of the legal or arbitration proceedings; and

(b) that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.

29 Sinosure

29.1 Sinosure Policy Each Lender represents and warrants to each other Lender that:

29.1.5 it has reviewed the Sinosure Policy and is aware of the provisions thereof;

29.1.6 the representations and warranties made by each Lender under the Sinosure Policy are true and correct with respect to such Lender in all respects;

29.1.7 no information provided by such Lender in writing to Sinosure prior to the date hereof was incomplete, untrue or incorrect in any respect except to the extent that such Lender, in the exercise of reasonable care and due diligence prior to the giving of the information, could not have discovered the error or omission; and

29.1.8 it has not taken (or failed to take), and agrees that it shall not take (or fail to take), any action that would result in any Lender being in breach of any of their respective obligations as insured parties under the Sinosure Policy.

29.2 Communication relating to Sinosure Policy Each Lender and the Sinosure Agent agree to furnish promptly to each Lender, a copy of each written communication received by it from, or sent by it to, Sinosure expressly relating to the Sinosure Policy. Each Lender agrees not to take any action under the Sinosure Policy without the consent of all of the Lenders (which consent shall not be unreasonably withheld), unless it has reasonably determined that such action would not be material to the coverage provided to the Lenders thereunder.

29.3 Claims under the Sinosure Policy Each Lender acknowledges and agrees that it shall have no entitlement to make any claim or to take any action whatsoever under or in connection with the Sinosure Policy unless a notice has been issued pursuant to Clause 23.2 and in accordance with the Sinosure Policy.

29.4 Sinosure Agent actions The Sinosure Agent agrees to take such actions under the Sinosure Policy (including with respect to any amendment, modification or supplement to the Sinosure Policy) as may be directed on the unanimous instructions of the Lenders from time to time; provided that, anything herein or in the Sinosure Policy to the contrary notwithstanding, the Sinosure Agent shall not be obliged to take any such action or to expend or risk its own funds or otherwise incur any liability in the performance of any of its duties or the exercise of any of its rights or powers hereunder or thereunder if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it or if such action would be contrary to applicable law.

29.5 Sinosure Agent indemnity Each Lender severally agrees to indemnify, in proportion to their Commitment, the Sinosure Agent and its affiliates, and its and their respective officers, directors, employees and agents for all liabilities, damages, costs and expenses sustained or incurred by, or asserted against the Sinosure Agent or any of its affiliates or its or their respective officers, directors, employees or agents arising out of or by reason of any action taken by the Sinosure Agent or any of its affiliates or its or their respective officers, directors, employees or agents or as a result of any misrepresentations and/or other breaches under Clause 29 (Sinosure Policy), provided that no Lender shall be liable for any of the foregoing to the extent they arise from the gross negligence or wilful misconduct of the Sinosure Agent. Each Lender expressly confirms and agrees that the Sinosure Agent shall not be liable for any loss caused as a result of the breach by any such Lender of its obligations under Clause 29.1 (Sinosure Policy). The provisions of Clause 26.14 (Resignation of the Agent), pertaining to the procedures to be followed in connection with the appointment of a successor Agent shall constitute, mutatis mutandis, the procedures to be followed in connection with the appointment of a successor Sinosure Agent.

29.6 Reimbursement of premium Each Lender agrees to reimburse the Sinosure Agent and each other Lender in their proportion of the Commitment in respect of the Sinosure Insurance Premium (or any part thereof) if such premium (or any part thereof) is paid by the Sinosure Agent or another Lender and the Sinosure Agent or that other Lender is not put in funds or fully reimbursed in accordance with the terms of Clause 14.5 (Sinosure Indemnity).

29.7 Prior consultation with Sinosure The Borrower acknowledges that the Lenders, the Sinosure Agent and the Agent may, under the terms of the Sinosure Policy be required:

29.7.6 to consult with Sinosure, prior to the exercise of certain decisions under the Finance Documents to which they are a party (including the exercise of such voting rights in relation to any substantial amendment to any Finance Document); and

29.7.7 to follow certain instructions given by Sinosure.

Each Finance Party will be deemed to have acted reasonably if it has acted on the instructions of Sinosure (in accordance with the terms of the Sinosure Policy) in the making of any such decision or the taking or refraining to take any action under any Finance Document to which it is a party.

29.8 Action contrary to Sinosure instructions or to the Sinosure Policy If, in respect of any matter in relation to or arising out of any of the Finance Documents where the approval, consent, authorisation or instruction of Sinosure is required under the terms of the Finance Documents or the Sinosure Policy, the Lenders or any one or more of them wish to take any step or action under or in relation to which conflicts with, or in contrary to, the provisions of the Sinosure Policy, the approval, consent, authorisation or instruction of Sinosure, such step or action may only be taken with the consent of all the Lenders.

29.9 Sinosure override

29.9.7 Each of the Agent, the Sinosure Agent and the Security Agent shall be authorised to take all such actions as they may deem necessary to ensure that all requirements of Sinosure under or in connection with the Sinosure Policy are complied with (unless all the Lenders instruct otherwise in writing).

29.9.8 Neither the Agent, the Sinosure Agent nor the Security Agent shall be obliged to do anything if, in their opinion (upon consultation with Sinosure), to do so could result in a breach of any requirements of Sinosure under or in connection with the Sinosure Policy or affect the validity of the Sinosure Policy (unless all the Lenders instruct otherwise in writing).

29.10 Liability of Sinosure Agent Neither the Sinosure Agent nor any of its directors, officers, employees or agents shall be liable to the Lenders for anything done or omitted to be done by the Sinosure Agent under or in connection with the Sinosure Policy, unless as a result of the Sinosure Agent's gross negligence or wilful misconduct.

Section 11 Administration

30 Payment Mechanics

30.1 Payments to the Agent On each date on which a Security Party or a Lender is required to make a payment under a Finance Document (other than the Master Agreement), that Security Party or that Lender shall make the same available to the Agent for value on the due date at the time and in such funds specified by the Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.

Payment shall be made to such account in the principal financial centre of the country of that currency with such bank as the Agent specifies.

30.2 Distributions by the Agent Each payment received by the Agent under the Finance Documents for another Party shall, subject to Clause 30.3 (Distributions to a Security Party) and Clause 30.4 (Clawback and pre-funding) be made available by the Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Agent by not less than five Business Days' notice with a bank specified by that Party in the principal financial centre of the country of that currency.

30.3 Distributions to a Security Party The Agent may (with the consent of a Security Party or in accordance with Clause 31 (Set-Off)) apply any amount received by it for that Security Party in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Security Party under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.

30.4 Clawback and pre-funding

30.4.6 Where a sum is to be paid to the Agent under the Finance Documents for another Party, the Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.

30.4.7 Unless Clause 30.4.3 applies, if the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Agent shall on demand refund the same to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its cost of funds.

30.4.8 If the Agent is willing to make available amounts for the account of the Borrower before receiving funds from the Lenders then if and to the extent that the Agent does so but it proves to be the case that it does not then receive funds from a Lender in respect of a sum which it paid to the Borrower:

(i) the Borrower shall on demand refund it to the Agent; and

(j) the Lender by whom those funds should have been made available or, if that Lender fails to do so, the Borrower, shall on demand pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding cost incurred by it as a result of paying out that sum before receiving those funds from that Lender.

30.5 Impaired Agent

30.5.4 If, at any time, the Agent becomes an Impaired Agent, a Security Party or a Lender which is required to make a payment under the Finance Documents to the Agent in accordance with Clause 30.1 (Payments to the Agent) may instead either:

(d) pay that amount direct to the required recipient(s); or

(e) if in its absolute discretion it considers that it is not reasonably practicable to pay that amount direct to the required recipient(s), pay that amount or the relevant part of that amount to an interest-bearing account held with an Acceptable Bank in relation to which no Insolvency Event has occurred and is continuing, in the name of the Security Party or the Lender making the payment (the "Paying Party") and designated as a trust account for the benefit of the Party or Parties beneficially entitled to that payment under the Finance Documents (the "Recipient Party" or "Recipient Parties").

In each case such payments must be made on the due date for payment under the Finance Documents.

30.5.5 All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the Recipient Party or the Recipient Parties pro rata to their respective entitlements.

30.5.6 A Party which has made a payment in accordance with this Clause 30.5 shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to the credit of the trust account.

30.5.7 Promptly upon the appointment of a successor Agent in accordance with Clause 26.15 (Replacement of the Agent), each Paying Party shall (other than to the extent that that Party has given an instruction pursuant to Clause 30.5.5) give all requisite instructions to the bank with whom the trust account is held to transfer the amount (together with any accrued interest) to the successor Agent for distribution to the relevant Recipient Party or Recipient Parties in accordance with Clause 30.2 (Distributions by the Agent).

30.5.8 A Paying Party shall, promptly upon request by a Recipient Party and to the extent:

(c) that it has not given an instruction pursuant to Clause 30.5.4; and

(d) that it has been provided with the necessary information by that Recipient Party,

give all requisite instructions to the bank with whom the trust account is held to transfer the relevant amount (together with any accrued interest) to that Recipient Party.

30.6 Partial payments

30.6.8 If the Agent receives a payment that is insufficient to discharge all the amounts then due and payable by a Security Party under the Finance Documents (other than the Master Agreement), the Agent shall apply that payment towards the obligations of that Security Party under the Finance Documents (other than the Master Agreement)in the following order:

(g) first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent or the Security Agent under the Finance Documents;

(h) secondly, in or towards payment pro rata of any accrued interest, fee or commission due but unpaid under this Agreement;

(i) thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement; and

(j) fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents,

provided that any part of the Indebtedness arising out of the Master Agreement shall be satisfied only after every other part of the Indebtedness for the time being due and payable has been satisfied in full.

30.6.9 The Agent shall, if so directed by the Majority Lenders, vary the order set out in Clauses 30.6.1(b) to 30.6.1(d).

30.6.10 Clauses 30.6.1 and 30.6.2 will override any appropriation made by a Security Party.

30.7 No set-off by Security Parties All payments to be made by a Security Party under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.

30.8 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).

During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.

30.9 Currency of account

^30.9.6  Subject to Clauses 30.9.2 to 30.9.5, dollars is the currency of account and payment for any sum due from a Security Party under any Finance Document.

30.9.7 A repayment or payment of all or part of the Loan or an Unpaid Sum shall be made in the currency in which the Loan or Unpaid Sum is denominated on its due date.

30.9.8 Each payment of interest shall be made in the currency in which the sum in respect of which the interest is payable was denominated when that interest accrued.

30.9.9 Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.

^30.9.10  Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.

30.10 Control account The Agent shall open and maintain on its books a control account in the name of the Borrower showing the advance of the Loan and the computation and payment of interest and all other sums due under this Agreement. The Borrower's obligations to repay the Loan and to pay interest and all other sums due under this Agreement shall be evidenced by the entries from time to time made in the control account opened and maintained under this Clause 30.10 and those entries will, in the absence of manifest error, be conclusive and binding.

30.11 Change of currency

30.11.5 Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:

(f) any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Agent (after consultation with the Borrower); and

(g) any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Agent (acting reasonably).

30.11.6 If a change in any currency of a country occurs, this Agreement will, to the extent the Agent (acting reasonably and after consultation with the Borrower) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Interbank Market and otherwise to reflect the change in currency.

30.12 Disruption to payment systems etc. If either the Agent determines in its discretion that a Disruption Event has occurred or the Agent is notified by the Borrower that a Disruption Event has occurred:

30.12.4 the Agent may, and shall if requested to do so by the Borrower, consult with the Borrower with a view to agreeing with the Borrower such changes to the operation or administration of the Loan as the Agent may deem necessary in the circumstances;

30.12.5 the Agent shall not be obliged to consult with the Borrower in relation to any changes mentioned in Clause 30.12.1 if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to any such changes;

30.12.6 the Agent may consult with the Finance Parties in relation to any changes mentioned in Clause 30.12.1 but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances;

30.12.7 any such changes agreed upon by the Agent and the Borrower shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of Clause 36 (Amendments and Waivers);

30.12.8 the Agent shall not be liable for any damages, costs or losses whatsoever (including, without limitation, for negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this Clause 30.12; and

30.12.9 the Agent shall notify the Finance Parties of all changes agreed pursuant to Clause 30.12.4.

31 Set-Off

31.1 Set-off A Finance Party may set off any matured obligation due from the Borrower or the Guarantor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to the Borrower or the Guarantor (as the case may be), regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.

^31.2  Master Agreement rights The rights conferred on the Swap Provider by this Clause 31 shall be in addition to, and without prejudice to or limitation of, the rights of netting and set off conferred on the Swap Provider by the Master Agreement.

32 Notices

32.1 Communications in writing Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax, letter or electronic mail.

32.2 Addresses The address, fax number and electronic mail address (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:

32.2.9 in the case of the Borrower, that identified with its name below;

^32.2.10  in the case of the Guarantor, that identified with its name below;

32.2.11 in the case of each Lender, that notified in writing to the Agent on or prior to the date on which it becomes a Party;

^32.2.12  in the case of the Swap Provider, that identified with its name below;

^32.2.13  in the case of the Arranger, that identified with its name below;

32.2.14 in the case of the Agent or the Security Agent, that identified with its name below; and

32.2.15 in the case of the Sinosure Agent, that identified with its name below,

or any substitute address, fax number, or department or officer as the Party may notify to the Agent (or the Agent may notify to the other Parties, if a change is made by the Agent) by not less than five Business Days' notice.

32.3 Delivery Any communication or document made or delivered by one Party to another under or in connection with the Finance Documents will only be effective:

32.3.9 if by way of fax, when received in legible form;

32.3.10 if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address; or

32.3.11 if by way of electronic mail, then in accordance with Clause 32.6.2 and Clause 32.6.3,

and, if a particular department or officer is specified as part of its address details provided under Clause 32.2 (Addresses), if addressed to that department or officer.

Any communication or document to be made or delivered to the Agent or the Security Agent will be effective only when actually received by the Agent or the Security Agent and then only if it is expressly marked for the attention of the department or officer identified with the Agent's or the Security Agent's signature below (or any substitute department or officer as the Agent or the Security Agent shall specify for this purpose).

All notices from or to a Security Party (save in respect of the Master Agreement) shall be sent through the Agent.

Subject to Clause 5.1 (Delivery of a Drawdown Request), any communication or document which becomes effective, in accordance with this Clause 32.3, after 5.00 p.m. in the place of receipt shall be deemed only to become effective on the following day.

32.4 Notification of address and fax number Promptly upon changing its address, fax number or electronic mail address, the Agent shall notify the other Parties.

32.5 Communication when Agent is Impaired Agent If the Agent is an Impaired Agent the Parties may, instead of communicating with each other through the Agent, communicate with each other directly and (while the Agent is an Impaired Agent) all the provisions of the Finance Documents which require communications to be made or notices to be given to or by the Agent shall be varied so that communications may be made and notices given to or by the relevant Parties directly. This provision shall not operate after a replacement Agent has been appointed.

32.6 Electronic communication

32.6.9 Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic means to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted form of communication and if those two Parties:

(c) notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and

(d) notify each other of any change to their address or any other such information supplied by them by not less than five Business Days' notice.

32.6.10 Any electronic communication made between those two Parties will be effective only when actually received in readable form and in the case of any electronic communication made by a Party to the Agent or the Security Agent only if it is addressed in such a manner as the Agent or the Security Agent shall specify for this purpose.

32.6.11 Any electronic communication which becomes effective, in accordance with Clause 32.6.2, after 5.00 p.m. in the place of receipt shall be deemed only to become effective on the following day.

32.7 English language Any notice given under or in connection with any Finance Document must be in English. All other documents provided under or in connection with any Finance Document must be:

32.7.11 in English; or

32.7.12 if not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.

33 Calculations and Certificates

33.1 Accounts In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by the Agent pursuant to Clause 30.10 (Control account) are prima facie evidence of the matters to which they relate.

33.2 Certificates and determinations Any certification or determination by the Agent of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.

33.3 Day count convention Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Interbank Market differs, in accordance with that market practice.

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34 Partial Invalidity

If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

35 Remedies and Waivers

No failure to exercise, nor any delay in exercising, on the part of any Finance Party or Secured Party, any right or remedy under a Finance Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any Finance Document. No election to affirm any Finance Document on the part of any Finance Party or Secured Party shall be effective unless it is in writing. No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.

36 Amendments and Waivers

36.1 Required consents

36.1.4 Subject to Clause 36.2 (Exceptions) any term of the Finance Documents (other than the Master Agreement) may be amended or waived only with the consent of the Majority Lenders, Sinosure and the Borrower and any such amendment or waiver will be binding on all Parties.

36.1.5 The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause 36.

36.1.6 Without prejudice to the generality of Clauses 26.7.3, 26.7.4 and 26.7.5 (Rights and discretions of the Agent), the Agent may engage, pay for and rely on the services of lawyers in determining the consent level required for and effecting any amendment, waiver or consent under this Agreement.

36.2 Exceptions

36.2.12 An amendment, waiver or (in the case of a Security Document) a consent of, or in relation to, any term of any Finance Document that has the effect of changing or which relates to:

(b) the definition of "Majority Lenders" in Clause 1.1 (Definitions);

(c) an extension to the date of payment of any amount under the Finance Documents;

(d) a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable;

(e) a change in currency of payment of any amount under the Finance Documents;

(f) an increase in any Commitment, an extension of the Availability Period or any requirement that a cancellation of Commitments reduces the Commitments of the Lenders rateably;

(g) any provision which expressly requires the consent of all the Lenders;

(h) Clause 2.2 (Finance Parties' rights and obligations), Clause 24 (Changes to the Lenders), this Clause 36, Clause 40 (Governing Law) or Clause 41.1 (Jurisdiction of English courts);

(i) (other than as expressly permitted by the provisions of any Finance Document) the nature or scope of:

(i) any Guarantee;

(ii) the Charged Property; or

(iii) the manner in which the proceeds of enforcement of the Security Documents are distributed; or

(j) the release of the Guarantee or of any Encumbrance created or expressed to be created or evidenced by the Security Documents unless permitted under this Agreement or any other Finance Document or relating to a sale or disposal of an asset which is the subject of any Encumbrance created or expressed to be created or evidenced by the Security Documents where such sale or disposal is expressly permitted under this Agreement or any other Finance Document;

shall not be made, or given, without the prior consent of all the Lenders.

36.2.13 An amendment or waiver which relates to the rights or obligations of the Agent, the Security Agent or the Arranger (each in their capacity as such) may not be effected without the consent of the Agent, the Security Agent or, as the case may be, the Arranger.

36.2.14 Except with Sinosure's prior consent, the Agent shall not be entitled to exercise or refrain from exercising any right, power, authority or discretion, or give or withhold any consent, the exercise or giving of which is, by the terms of this Agreement or the Sinosure Policy, would require Sinosure's prior consent and any amendment or waiver which relates to any matter which, by the terms of any Finance Document, requires the prior consent of Sinosure shall not be entered into or provided by the Agent until Sinosure has agreed to its terms.

36.3 Replacement of Lender

36.3.13 If:

(g) any Lender becomes a Non-Consenting Lender (as defined in Clause 36.3.4); or

(h) the Borrower or any other Security Party becomes obliged to repay any amount in accordance with Clause 7.1 (Illegality) or to pay additional amounts pursuant to Clause 12.2 (Tax gross-up), Clause 12.3 (Tax Indemnity) or Clause 13.1 (Increased costs) to any Lender,

then the Borrower may, on ten Business Days' prior written notice to the Agent and such Lender, replace such Lender by requiring such Lender to (and, to the extent permitted by law, such Lender shall) transfer pursuant to Clause 24 (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 (a "Replacement Lender") selected by the Borrower, which confirms its willingness to assume and does assume all the obligations of the transferring Lender in accordance with Clause 24 (Changes to the Lenders) for a purchase price in cash payable at the time of 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 24.9 (Pro rata interest settlement), Break Costs and other amounts payable in relation thereto under the Finance Documents.

36.3.14 The replacement of a Lender pursuant to this Clause 36.3 shall be subject to the following conditions:

(j) the Borrower shall have no right to replace the Agent or Security Agent;

(k) neither the Agent nor the Lender shall have any obligation to the Borrower to find a Replacement Lender;

(l) in the event of a replacement of a Non-Consenting Lender such replacement must take place no later than 15 Business Days after the date on which that Lender is deemed a Non-Consenting Lender;

(m) in no event shall the Lender replaced under this Clause 36.3 be required to pay or surrender to such Replacement Lender any of the fees received by such Lender pursuant to the Finance Documents; and

(n) the Lender shall only be obliged to transfer its rights and obligations pursuant to Clause 36.3.1 once it is satisfied that it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to that transfer.

36.3.15 A Lender shall perform the checks described in Clause 36.3.2(e) as soon as reasonably practicable following delivery of a notice referred to in Clause 36.3.1 and shall notify the Agent and the Borrower when it is satisfied that it has complied with those checks.

36.3.16 In the event that:

(a) the Borrower or the Agent (at the request of the Borrower) has requested the Lenders to give a consent in relation to, or to agree to a waiver or amendment of, any provisions of the Finance Documents;

(b) the consent, waiver or amendment in question requires the approval of all the Lenders; and

(c) Lenders whose Commitments aggregate more than 66²/₃% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 66²/₃% of the Total Commitments prior to that reduction) have consented or agreed to such waiver or amendment,

then any Lender who does not and continues not to consent or agree to such waiver or amendment shall be deemed a "Non-Consenting Lender".

37 Confidentiality

37.1 Confidential Information Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 37.2 (Disclosure of Confidential Information) and Clause 37.3 (Disclosure to numbering service providers), and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.

37.2 Disclosure of Confidential Information Any Finance Party may disclose:

37.2.17 to Sinosure, to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this Clause 37.2.1 is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information provided that Sinosure shall be permitted to disclose Confidential Information to any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;

37.2.18 to any person:

(a) to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Agent or Security Agent and, in each case, to any of that person's Affiliates, Related Funds, Representatives and professional advisers;

(b) with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Security Parties and to any of that person's Affiliates, Related Funds, Representatives and professional advisers;

(c) appointed by any Finance Party or by a person to whom Clause 37.2.2(a) or 37.2.2(b) applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under Clause 26.17.2 (Relationship with the Lenders));

(d) who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in Clause 37.2.2(a) or 37.2.2(b);

(e) to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;

(f) to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes;

(g) to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 24.8 (Security over Lenders' rights);

(h) who is either an insurance company, a reinsurance company, an insurance broker or a reinsurance broker that in either case is providing or may potentially provide insurance cover either (i) in respect of the assets that are the subject of the Finance Document or (ii) pursuant to and in accordance with the terms of the Finance Documents;

(i) who is a Party; or

(j) with the consent of the Borrower;

in each case, such Confidential Information as that Finance Party shall consider appropriate if:

(i) in relation to Clauses 37.2.2(a), 37.2.2(b) and 37.2.2(c), the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;

(ii) in relation to Clause 37.2.2(d), the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;

(iii) in relation to Clauses 37.2.2(e), 37.2.2(f) and 37.2.2(g), the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances;

37.2.19 to any person appointed by that Finance Party or by a person to whom Clause 37.2.2(a) or 37.2.2(b) applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this Clause 37.2.3 if the service provider to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking; and

^37.2.20  to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Security Parties if the rating agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information.

37.3 Disclosure to numbering service providers

37.3.13 Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Loan and/or one or more Security Parties the following information:

(o) names of Security Parties;

(p) country of domicile of Security Parties;

(q) place of incorporation of Security Parties;

(r) date of this Agreement;

(s) Clause 40 (Governing law);

(t) the names of the Agent and the Arranger;

(u) date of each amendment and restatement of this Agreement;

(v) amount of Total Commitments;

(w) currencies of the Loan;

(x) type of Loan;

(y) ranking of the Loan;

(z) Termination Date;

(aa) changes to any of the information previously supplied pursuant to (a) to (l); and

(bb) such other information agreed between such Finance Party and that Security Party,

to enable such numbering service provider to provide its usual syndicated loan numbering identification services.

37.3.14 The Parties acknowledge and agree that each identification number assigned to this Agreement, the Loan and/or one or more Security Parties by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.

37.3.15 The Borrower represents that none of the information set out in Clauses 37.3.1(a) to 37.3.1(n) is, nor will at any time be, unpublished price-sensitive information.

37.3.16 The Agent shall notify the Borrower and the other Finance Parties of:

(a) the name of any numbering service provider appointed by the Agent in respect of this Agreement, the Loan and/or one or more Security Parties; and

(b) the number or, as the case may be, numbers assigned to this Agreement, the Loan and/or one or more Security Parties by such numbering service provider.

37.4 Entire agreement This Clause 37 constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.

37.5 Inside information Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.

37.6 Notification of disclosure Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Borrower:

37.6.4 of the circumstances of any disclosure of Confidential Information made pursuant to Clause 37.2.2(e) (Disclosure of Confidential Information) except where such disclosure is made to any of the persons referred to in that Clause during the ordinary course of its supervisory or regulatory function; and

37.6.5 upon becoming aware that Confidential Information has been disclosed in breach of this Clause 37.

37.7 Continuing obligations The obligations in this Clause 37 are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of 12 months from the earlier of:

37.7.6 the date on which all amounts payable by the Security Parties under or in connection with the Finance Documents have been paid in full and the Loan has been cancelled or otherwise ceases to be available; and

37.7.7 the date on which such Finance Party otherwise ceases to be a Finance Party.

38 Disclosure of Lender Details by Agent

38.1 Supply of Lender details to Borrower The Agent shall provide to the Borrower within ten Business Days of a request by the Borrower (but no more frequently than once per calendar month) a list (which may be in electronic form) setting out the names of the Lenders as at the date of that request, their respective Commitments, the address and fax number (and the department or officer, if any, for whose attention any communication is to be made) of each Lender for any communication to be made or document to be delivered under or in connection with the Finance Documents, the electronic mail address and/or any other information required to enable the sending and receipt of information by electronic mail or other electronic means to and by each Lender to whom any communication under or in connection with the Finance Documents may be made by that means and the account details of each Lender for any payment to be distributed by the Agent to that Lender under the Finance Documents.

38.2 Supply of Lender details at Borrower's direction

38.2.17 The Agent shall, at the request of the Borrower, disclose the identity of the Lenders and the details of the Lenders' Commitments to any:

(k) other Party or any other person if that disclosure is made to facilitate, in each case, a refinancing of the Financial Indebtedness arising under the Finance Documents or a material waiver or amendment of any term of any Finance Document; and

(l) Security Party.

38.2.18 Subject to Clause 38.2.3, the Borrower shall procure that the recipient of information disclosed pursuant to Clause 38.2.1 shall keep such information confidential and shall not disclose it to anyone and shall ensure that all such information is protected with security measures and a degree of care that would apply to the recipient's own confidential information.

38.2.19 The recipient may disclose such information to any of its officers, directors, employees, professional advisers, auditors and partners as it shall consider appropriate if any such person is informed in writing of its confidential nature, except that there shall be no such requirement to so inform if that person is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by duties of confidentiality in relation to the information.

38.3 Supply of Lender details to other Lenders

38.3.7 If a Lender (a "Disclosing Lender") indicates to the Agent that the Agent may do so, the Agent shall disclose that Lender's name and Commitment to any other Lender that is, or becomes, a Disclosing Lender.

38.3.8 The Agent shall, if so directed by the Requisite Lenders, request each Lender to indicate to it whether it is a Disclosing Lender.

38.4 Lender enquiry If any Lender believes that any entity is, or may be, a Lender and:

38.4.10 that entity ceases to have an Investment Grade Rating; or

38.4.11 an Insolvency Event occurs in relation to that entity,

the Agent shall, at the request of that Lender, indicate to that Lender the extent to which that entity has a Commitment.

38.5 Lender details definitions In this Clause 38:

"Investment Grade Rating" means, in relation to an entity, a rating for its long-term unsecured and non-credit-enhanced debt obligations of BBB- or higher by Standard & Poor's Rating Services or Fitch Ratings Ltd or Baa3 or higher by Moody's Investors Service Limited or a comparable rating from an internationally recognised credit rating agency.

"Requisite Lenders" means a Lender or Lenders whose Commitments aggregate 15 per cent (or more) of the Total Commitments (or if the Total Commitments have been reduced to zero, aggregated 15 per cent (or more) of the Total Commitments immediately prior to that reduction).

39 Counterparts

Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.

Section 12 Governing Law and Enforcement

40 Governing Law

This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

41 Enforcement

41.1 Jurisdiction of English courts The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement or any non-contractual obligation arising out of or in connection with this Agreement) (a "Dispute"). Each Party agrees that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

This Clause 41.1 is for the benefit of the Finance Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, any Finance Party may take concurrent proceedings in any number of jurisdictions.

41.2 Waiver of Jury Trial EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MIGHT HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE FINANCE DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER FINANCE DOCUMENTS BY, AMONGST OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS CLAUSE 41.

41.3 Service of process

41.3.8 Without prejudice to any other mode of service allowed under any relevant law, the Borrower and the Guarantor:

(i) irrevocably appoints Scorpio UK Limited currently of 10 Lower Grosvenor Place, London SW1W 0EN, England (Attention: General Counsel) as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and

(j) agrees that failure by a process agent to notify the Borrower or the Guarantor (as the case may be) of the process will not invalidate the proceedings concerned.

41.3.9 If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process or terminates its appointment as agent for service of process, the Borrower or the Guarantor (as the case may be) must immediately (and in any event within five days of such event taking place) appoint another agent on terms acceptable to the Agent. Failing this, the Agent may appoint another agent for this purpose.

42 Patriot Act Notice

Each of the Finance Parties hereby notifies the Borrower and the Guarantor that pursuant to the requirements of the Patriot Act and the policies and practices of the Finance Parties, the Finance Parties are required to obtain, verify and record certain information and documentation that identifies each Security Party, which

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information includes the name and address of each Security Party  and such other information that will allow the Finance Parties to identify each Security Party  in accordance with the Patriot Act.

This Agreement has been entered into on the date stated at the beginning of this Agreement.

Schedule 1The Original Lenders

Name of Original Lender	Commitment
ABN AMRO Bank N.V.	$19,800,000

Schedule 2Part I
Conditions Precedent

1 Security Parties

(a) Constitutional documents Copies of the constitutional documents of the Borrower and the Guarantor together with such other evidence as the Agent may reasonably require that the Borrower and the Guarantor are each duly incorporated in its country of incorporation and remains in existence with power to enter into, and perform its obligations under, the Relevant Documents to which it is or is to become a party.

(b) Certificates of good standing A certificate of good standing in respect of the Borrower and the Guarantor (if such a certificate can be obtained).

(c) Board resolutions A copy of a resolution of the board of directors of the Borrower and the Guarantor:

(i) approving the terms of, and the transactions contemplated by, the Relevant Documents to which it is a party and resolving that it execute those Relevant Documents; and

(ii) authorising a specified person or persons to execute those Relevant Documents (and all documents and notices to be signed and/or dispatched under those documents) on its behalf.

(d) Specimen signatures A specimen of the signature of each person authorised by the resolutions referred to in (c).

(e) Officer's certificates An original certificate of a duly authorised officer of the Borrower and the Guarantor:

(i) certifying that each copy document relating to it specified in this Part I of Schedule 2 is correct, complete and in full force and effect;

(ii) setting out the names of the directors, officers and shareholders of the Borrower and the Guarantor (as the case may be) and the proportion of shares held by each shareholder; and

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(iii) confirming that borrowing or guaranteeing or securing, as appropriate, the Loan would not cause any borrowing, guarantee, security or similar limit binding on that Security Party to be exceeded.

(f) Powers of attorney The original notarially attested and legalised power of attorney of each of the Borrower and the Guarantor under which the Relevant Documents to which it is or is to become a party are to be executed or transactions undertaken by the Borrower and the Guarantor.

2 Security and related documents

(a) Vessel documents Photocopies, certified as true, accurate and complete by a director, the secretary or the legal advisers of the Borrower, of:

(i) the MOA;

(ii) such documents as the Agent may reasonably require to evidence the novation in favour of the Borrower as purchaser of the Vessel pursuant to the MOA;

(iii) the builder's certificate and/or bill of sale transferring title in the Vessel to the Seller under the Building Contract free of all encumbrances, maritime liens or other debts;

(iv) the bill of sale transferring title in the Vessel to the Borrower under the MOA free of all encumbrances, maritime liens or other debts;

(v) the protocol of delivery and acceptance evidencing the unconditional physical delivery of the Vessel by the Builder to the Seller pursuant to the Building Contract;

(vi) the protocol of delivery and acceptance evidencing the unconditional physical delivery of the Vessel by the Seller to the Borrower pursuant to the MOA;

(vii) the commercial invoice issued by the Seller in respect of the final contract price of the Vessel pursuant to the MOA;

(viii) either evidence that the deposit to be paid by the Borrower pursuant to clause 2 of the MOA has been paid or evidence that the deposit to be paid by the Borrower pursuant to clause 2 of the MOA has been released to the Seller in accordance with clause 2 of the MOA;

(ix) evidence of the amounts to be paid by the Borrower to the Seller and to the Builder respectively pursuant to clause 3 of the MOA;

(x) such other documents that are to be delivered by the Seller to the Borrower pursuant to the terms and conditions of the MOA;

(xi) any Charter;

(xii) the Management Agreement together with a confirmation from the parties thereto that the Vessel has been delivered into the Management Agreement;

(xiii) the Vessel's current Safety Construction, Safety Equipment, Safety Radio and Load Line Certificates;

(xiv) evidence of the Vessel's current Certificate of Financial Responsibility issued pursuant to the United States Oil Pollution Act 1990;

(xv) the Vessel's current SMC;

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(xvi) the ISM Company's current DOC;

(xvii) the Vessel's current ISSC;

(xviii) the Vessel's current IAPPC;

(xix) the Vessel's current Tonnage Certificate;

in each case together with all addenda, amendments or supplements.

(b) Evidence of Borrower's title Evidence that on the Delivery Date (i) the Vessel will be at least provisionally registered under the flag stated in Preliminary (A) in the ownership of the Borrower and (ii) the Mortgage will be capable of being registered against the Vessel with first priority.

(c) Evidence of insuranceand insurance report Evidence that the Vessel is insured in the manner required by the Security Documents and that letters of undertaking will be issued in the manner required by the Security Documents, together with (if required by the Agent) the written approval of the Insurances by way of a written report from an insurance adviser appointed by the Agent, but at the expense of the Borrower.

(d) Confirmation of class An interim Class Certificate for hull and machinery confirming that the Vessel is classed with the highest class applicable to vessels of her type with Nippon Kaiji Kyokai or such other classification society as may be acceptable to the Agent.

(e) Valuation Two valuations dated not more than 30 days prior to the Drawdown Date evidencing the FMV of the Vessel, certifying that the amount of the Loan requested to be advanced pursuant to the Drawdown Request is no greater than 60% of the FMV of the Vessel, such valuations to be obtained by the Agent at the expense of the Borrower.

(f) Security Documents The Security Documents, together with all other documents required by any of them, including, without limitation, (i) all notices of assignment and/or charge and evidence that those notices will be duly acknowledged by the recipients and (ii) all share certificates, certified copy share registers or registers of members, transfer forms, proxy forms, letters of resignation and letters of undertaking.

^(g)  Mandates Such duly signed forms of mandate, and/or other evidence of the opening of the Account, as the Security Agent may require.

(h) No disputes The written confirmation of the Borrower that there is no dispute under any of the Relevant Documents as between the parties to any such document.

⁽ⁱ⁾  Account Bank's confirmation The written confirmation of the Account Bank that the Account has been opened with the Account Bank and to its actual knowledge is free from Encumbrances other than as created by or pursuant to the Security Documents and rights of set off in favour of the Account Bank as account holder.

^(j)  Master Agreement The Master Agreement (but not the execution of any Transaction thereunder).

^(k)  Managers' Undertakings The Managers' Undertakings.

(l) Intercompany Loan Agreement A photocopy, certified as true, accurate and complete by a director, the secretary or the legal advisers of the Borrower, of any Intercompany Loan Agreement.

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3 Legal opinions

The following legal opinions, each addressed to the Agent, the Security Agent, the Swap Provider, the Sinosure Agent and the Lenders and capable of being relied upon by any persons who become Lenders pursuant to the primary syndication of the Loan or confirmation satisfactory to the Agent that such opinions will be given:

(a) a legal opinion of Stephenson Harwood LLP, legal advisers to the Agent as to English law substantially in the form distributed to the Lenders prior to signing this Agreement;

(b) a legal opinion of the following legal advisers to the Agent:

(i) Seward and Kissel LLP as to Marshall Islands law;

(ii) Clifford Chance LLP as to Netherlands law; and

(iii) King and Wood as to PRC law.

4 Sinosure related documents

(a) Evidence of Sinosure authority Evidence satisfactory to the Agent (acting on the unanimous instructions of the Lenders) that the Sinosure Policy has been duly authorised by Sinosure.

(b) Sinosure Policy A copy of the Sinosure Policy duly executed by Sinosure, including an English translation in form and substance acceptable to the Agent (acting on the unanimous instructions of the Lenders), which translation shall be at the expense of the Borrower, pursuant to which 90% of the Loan together with interest thereon shall be covered.

(a) Sinosure Insurance Premium A copy of the debit note issued by Sinosure evidencing the amount of the Sinosure Insurance Premium, and evidence in form and substance acceptable to the Agent (acting on the unanimous instructions of the Lenders) of the payment to, and receipt by, Sinosure of the Sinosure Insurance Premium and any costs and expenses which are then due and payable to Sinosure.

(b) Other documents Such other documentation and evidence as may be requested by Sinosure under the Sinosure Policy not otherwise comprised in the documents listed in this Part I of Schedule 2.

(c) Sinosure Confirmation Confirmation from the Sinosure Agent and the Lenders that neitherthe Sinosure Agent nor the Lenders have been informed that Sinosure intend to repudiate or suspend the Sinosure Policy.

5 Other documents and evidence

(a) Drawdown Request A duly completed Drawdown Request.

(b) Process agent Evidence that any process agent referred to in Clause 41.2 (Service of process) and any process agent appointed under any other Finance Document has accepted its appointment.

(c) Other Authorisations A copy of any other Authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable (if it has notified the Borrower accordingly) in connection with the entry into and performance of the transactions contemplated by any Relevant Document or for the validity and enforceability of any Relevant Document.

(d) Financial statements A copy of the Original Financial Statements of the Guarantor.

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(e) Fees The Fee Letter and evidence that the fees, costs and expenses then due from the Borrower under Clause 11 (Fees) and Clause 16 (Costs and Expenses) have been paid or will be paid by the Drawdown Date.

(f) "Know your customer" documents Such documentation and other evidence as is reasonably requested by the Agent and the Sinosure Agent in order for the Lenders and Sinosure to comply with all necessary "know your customer" or similar identification procedures in relation to the transactions contemplated in the Finance Documents.

(g) Capital injected Evidence satisfactory to the Agent that all sums payable by the Borrower pursuant to the MOA that are not financed pursuant to the Loan have been paid in accordance with the MOA.

Part II
Conditions Subsequent

1 Evidence of Borrower's title Certificate of ownership and encumbrance (or equivalent) issued by the Registrar of Ships (or equivalent official) of the flag stated in Preliminary (A) confirming that (a) the Vessel is permanently registered under that flag in the ownership of the Borrower, (b) the Mortgage has been registered with first priority against the Vessel and (c) there are no further Encumbrances registered against the Vessel.

2 Letters of undertaking Letters of undertaking in respect of the Insurances as required by the Security Documents together with copies of the relevant policies or cover notes or entry certificates duly endorsed with the interest of the Finance Parties.

3 Acknowledgements of notices Acknowledgements of all notices of assignment and/or charge given pursuant to the Security Documents.

4 Legal opinions Such of the legal opinions specified in Part I of this Schedule 2 as have not already been provided to the Agent.

5 Master's receipt The master's receipt for the Mortgage.

6 Sinosure Policy An original counterpart of the Sinosure Policy duly executed by Sinosure, including an English translation in form and substance acceptable to the Agent (acting on the unanimous instructions of the Lenders), which translation shall be at the expense of the Borrower, pursuant to which 90% of the Loan together with interest thereon shall be covered.

7 Sinosure Insurance Premium A copy of the invoice issued by Sinosure evidencing the amount of the Sinosure Insurance Premium.

8 Confirmation by Sinosure Written confirmation by Sinosure addressed to the Agent that the Sinosure Policy is in full force and effect.

Schedule 3Drawdown Request

From: SBI Merengue Shipping Company Limited

To: [Agent]

Dated:

Dear Sirs

SBI Merengue Shipping Company Limited – $19,800,000 Loan Agreement dated [                        ] 2015 (the "Agreement")

1 We refer to the Agreement. This is the Drawdown Request. Terms defined in the Agreement have the same meaning in this Drawdown Request unless given a different meaning in this Drawdown Request.

2 We wish to borrow the Loan on the following terms:

Proposed Drawdown Date: [        ] (or, if that is not a Business Day, the next Business Day)

Amount:    $[        ]

Interest Period:    [        ]

3 We confirm that each condition specified in Clause 4.2 (Further conditions precedent) is satisfied on the date of this Drawdown Request.

4 The proceeds of the Loan should be paid as follows in accordance with the provisions of the MOA towards payment of the purchase price of the Vessel:

4.1    $[        ] should be paid to the following account of the Seller:

[Seller account details]

5    $[        ] should be paid to the following account of the Builder:

[Builder account details]

6 This Drawdown Request is irrevocable.

Yours faithfully

…………………………………

authorised signatory for

SBI Merengue Shipping Company Limited

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Schedule 4

Mandatory Cost Formula

1 The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of compliance with (a) the requirements of the Bank of England, the Financial Conduct Authority and/ or the Prudential Regulation Authority (or, in either case, any other authority which replaces all or any of its functions), (b) the requirements of the European Central Bank or (c) the Swiss National Bank and/or the Swiss Financial Market Supervisory Authority (or, in either case, any other authority which replaces all or any of its functions).

2 On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall calculate, as a percentage rate, a rate (the "Additional Cost Rate") for each Lender, in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Agent as a weighted average of the Lenders' Additional Cost Rates (weighted in proportion to the percentage participation of each Lender in the Loan) and will be expressed as a percentage rate per annum.

3 The Additional Cost Rate for any Lender lending from a Facility Office in a Participating Member State or Switzerland will be the percentage notified by that Lender to the Agent. This percentage will be certified by that Lender in its notice to the Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender's participation in the Loan made from that Facility Office) of complying with the minimum reserve requirements of the European Central Bank or the Swiss National Bank and/or the Swiss Financial Market Supervisory Authority in respect of loans made from that Facility Office.

4 The Additional Cost Rate for any Lender lending from a Facility Office in the United Kingdom will be calculated by the Agent as follows:

E x 0.01/300 per cent per annum

Where:

E is designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Agent as being the average of the most recent rates of charge supplied by the Reference Banks to the Agent pursuant to paragraph 6 below and expressed in pounds per £1,000,000.

For the purposes of this Schedule:

(a) "Fees Rules" means the rules on periodic fees contained in the Financial Conduct Authority and Prudential Regulation Authority Fees or such other law or regulation as may be in force from time to time in respect of the payment of fees for the acceptance of deposits;

(b) "Fee Tariffs" means the fee tariffs specified in the Fees Rules under the activity group A.1 Deposit acceptors (disregarding any minimum fee or zero rated fee required pursuant to the Fees Rules but taking into account any applicable discount rate);

(c) "Participating Member State" means any member state of the European Community that adopts or has adopted the Euro as its lawful currency in accordance with legislation of the European Community relating to Economic and Monetary Union;

(d) "Tariff Base" has the meaning given to it in, and will be calculated in accordance with, the Fees Rules; and

(e) "£" means the lawful currency for the time being of Great Britain and Northern Ireland.

5 If requested by the Agent, each Reference Bank shall, as soon as practicable after publication by the Financial Conduct Authority and the Prudential Regulation Authority, supply to the Agent, the rate of charge payable by that Reference Bank to the Financial Conduct Authority and the Prudential Regulation Authority pursuant to the Fees Rules in respect of the relevant financial year of the Financial Conduct Authority and the Prudential Regulation Authority (calculated for this purpose by that Reference Bank as being the average of the Fee Tariffs applicable to that Reference Bank for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of that Reference Bank.

6 Each Lender shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate. In particular, each Lender shall supply the following information on or prior to the date on which it becomes a Lender:

(a)    the jurisdiction of its Facility Office; and

(b) any other information that the Agent may reasonably require for such purpose.

7 The rates of charge of each Reference Bank for the purpose of E above shall be determined by the Agent based upon the information supplied to it pursuant to paragraphs 5 and 6 above.

8 The Agent shall have no liability to any person if such determination results in an Additional Cost Rate which over or under compensates any Lender and shall be entitled to assume that the information provided by any Lender or Reference Bank pursuant to paragraphs 3, 5 and 6 above is true and correct in all respects.

9 The Agent shall distribute the additional amounts received as a result of the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender and each Reference Bank pursuant to paragraphs 3, 5 and 6 above.

10 Any determination by the Agent pursuant to this Schedule in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the absence of manifest error, be conclusive and binding on all Parties.

11 The Agent may from time to time, after consultation with the Borrower and the Lenders, determine and notify to all Parties any amendments which are required to be made to this Schedule in order to comply with any change in law, regulation or any requirements from time to time imposed by the Bank of England, the Financial Conduct Authority, the Prudential Regulation Authority, the European Central Bank, the Swiss National Bank and/or the Swiss Financial Market Supervisory Authority (or, in any case, any other authority which replaces all or any of its functions) and any such determination shall, in the absence of manifest error, be conclusive and binding on all Parties.

Schedule 5Form of Transfer Certificate

To:    [        ] as Agent and [ ] as Security Agent

From: [The Existing Lender] (the "Existing Lender") and [The New Lender] (the "New Lender")

Dated:

SBI Merengue Shipping Company Limited – $19,800,000 Loan Agreement dated [                        ] 2015 (the "Loan Agreement")

1 We refer to the Loan Agreement. This agreement (the "Agreement") shall take effect as a Transfer Certificate for the purposes of the Loan Agreement. Terms defined in the Loan Agreement have the same meaning in this Agreement unless given a different meaning in this Agreement.

2 We refer to Clause 24.5 (Procedure for transfer) of the Loan Agreement:

(a) The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by novation and in accordance with Clause 24.5 (Procedure for transfer) all of the Existing Lender's rights and obligations under the Loan Agreement and the other Finance Documents which relate to that portion of the Existing Lender's Commitment(s) and participations in the Loan under the Loan Agreement as specified in the Schedule.

(b) The proposed Transfer Date is [            ].

(c) The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 32.2 (Addresses) are set out in the Schedule.

3 The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in Clause 24.4.1(c) (Limitation of responsibility of Existing Lenders).

4 This Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.

5 This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

6 This Agreement has been entered into on the date stated at the beginning of this Agreement.

Note: The execution of this Transfer Certificate may not transfer a proportionate share of the Existing Lender's interest in any Encumbrance created or expressed to be created or evidenced by the Security Documentsin all jurisdictions. It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect a transfer of such a share in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.

The Schedule

Commitment/rights and obligations to be transferred

[insert relevant details]

[Facility Office address, fax number and attention details for notices and account details for payments,]

[Existing Lender]    [New Lender]

By:    By:

This Agreement is accepted as a Transfer Certificate for the purposes of the Loan Agreement by the Agent and the Transfer Date is confirmed as [            ].

[Agent]

By:

[Security Agent]

By:        

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Schedule 6Form of Assignment Agreement

To: [ ] as Agent, [ ] as Security Agent and [ ] as Borrower, for and on behalf of each Security Party

From: [the Existing Lender] (the "Existing Lender") and [the New Lender] (the "New Lender")

Dated:

SBI Merengue Shipping Company Limited- $19,800,000 Loan Agreement dated [                        ] 2015 (the "Loan Agreement")

1 We refer to the Loan Agreement. This is an Assignment Agreement. This agreement (the "Agreement") shall take effect as an Assignment Agreement for the purpose of the Loan Agreement. Terms defined in the Loan Agreement have the same meaning in this Agreement unless given a different meaning in this Agreement.

2 We refer to Clause 24.6 (Procedure for assignment) of the Loan Agreement:

(a) The Existing Lender assigns absolutely to the New Lender all the rights of the Existing Lender under the Loan Agreement, the other Finance Documents and in respect of any Encumbrance created or expressed to be created or evidenced by the Security Documents which correspond to that portion of the Existing Lender's Commitment(s) and participations in the Loan under the Loan Agreement as specified in the Schedule.

(b) The Existing Lender is released from all the obligations of the Existing Lender which correspond to that portion of the Existing Lender's Commitment(s) and participations in the Loan under the Loan Agreement specified in the Schedule.

(c) The New Lender becomes a Party as a Lender and is bound by obligations equivalent to those from which the Existing Lender is released under paragraph (b).

3 The proposed Transfer Date is [ ].

4 On the Transfer Date the New Lender becomes Party to the relevant Finance Documents as a Lender.

5 The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 32.2 (Addresses) are set out in the Schedule.

6 The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in Clause 24.4.3 (Limitation of responsibility of Existing Lenders).

7 This Agreement acts as notice to the Agent (on behalf of each Finance Party) and, upon delivery in accordance with Clause 24.7 (Copy of Transfer Certificate or Assignment Agreement to Borrower), to the Borrower (on behalf of each Security Party) of the assignment referred to in this Agreement.

8 This Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.

9 This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

10 This Agreement has been entered into on the date stated at the beginning of this Agreement.

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Note: The execution of this Assignment Agreement may not transfer a proportionate share of the Existing Lender's interest in any Encumbrance created or expressed to be created or evidenced by the Security Documents in all jurisdictions. It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect a transfer of such a share in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.

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The Schedule

Commitment/rights and obligations to be transferred by assignment, release and accession

[insert relevant details]

[Facility office address, fax number and attention details for notices and account details for payments]

[Existing Lender]    [New Lender]

By:    By:

This Agreement is accepted as an Assignment Agreement for the purposes of the Loan Agreement by the Agent and the Transfer Date is confirmed as [                    ].

Signature of this Agreement by the Agent constitutes confirmation by the Agent of receipt of notice of the assignment referred to in this Agreement, which notice the Agent receives on behalf of each Finance Party.

[Agent]

By:

[Security Agent]

By:                    

Schedule 7Form of Compliance Certificate

To:    [Agent]

From:    Scorpio Bulkers Inc.

Dated:

Dear Sirs

SBI Merengue Shipping Company Limited– $19,800,000 Loan Agreement dated [                        ] 2015 (the "Agreement")

1 We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.

2 We confirm that we maintain:

(a) Cash of $[  ];

(b) Cash Equivalents of $[  ];

(c) Minimum Liquidity of $[  ], of which [  ]% consists of Cash;

(d) Consolidated Tangible Net Worth of $[  ];

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(e) a ratio of Net Debt to Consolidated Total Capitalisation of [  ]:1.0; and

(f) a ratio of Consolidated EBITDA to Consolidated Net Interest Expense of [  ]:1.0.

3 [We confirm that no Default is continuing.]^* 

Signed:	………………………………………………
	Chief Financial Officer
	of
	Scorpio Bulkers Inc.

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Signatures

The Borrower

SBI Merengue Shipping     )

Company Limited     )

)

By: /s/ Micha Withoft    )

Micha Withoft

Attorney-in-Fact

)

Address:     )

c/o Scorpio Bulkers Inc.    )

9, Boulevard Charles III    )

MC 98000 Monaco    )

Fax no.: +377 97 77 8346        )

Department Officer: General Counsel        )

The Guarantor

Scorpio Bulkers Inc.    )

)

By: /s/ Micha Withoft    )

Micha Withoft

Attorney-in-Fact                 )

Address:     )

9, Boulevard Charles III    )

MC 98000 Monaco    )

Fax no.: +377 97 77 8346        )

Department Officer: General Counsel        )

The Arranger

ABN AMRO Bank N.V.    )

)

By: /s/ Ian Mace    )

Ian Mace

Attorney-in-Fact    )

Address:     )

Coolsingel 93                )

3012 AE Rotterdam            )

The Netherlands        )

Fax no.: +31 10 401 5323         )

Department/Officer:             )

ECT / Transportation Mid-Office        )

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Email:                    )

magda.braam-heijnen@nl.abnamro.com,    )

alper.sanliunal@nl.abnamro.com,        )

martijn.m.van.den.berg@nl.abnamro.com    )

and                    )

tom.van.vonderen@nl.abnamro.com    )

The Agent

ABN AMRO Bank N.V.    )

)

By:/s/ Ian Mace    )

Ian Mace

Attorney-in-Fact    )

Address: )

Coolsingel 93 )

3012 AE Rotterdam )

The Netherlands    )

Fax no.: +31 10 401 5323         )

Department/Officer:         )

ECT / Transportation Mid-Office        )

Email:                    )

magda.braam-heijnen@nl.abnamro.com,    )

alper.sanliunal@nl.abnamro.com,        )

martijn.m.van.den.berg@nl.abnamro.com    )

and                    )

tom.van.vonderen@nl.abnamro.com    )

The Security Agent

ABN AMRO Bank N.V.    )

)

By: /s/ Ian Mace    )

Ian Mace

Attorney-in-Fact    )

Address:     )

Coolsingel 93                )

3012 AE Rotterdam            )

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The Netherlands        )

Fax no.: +31 10 401 5323         )

Department/Officer:             )

ECT / Transportation Mid-Office        )

Email:                    )

magda.braam-heijnen@nl.abnamro.com,    )

alper.sanliunal@nl.abnamro.com,        )

martijn.m.van.den.berg@nl.abnamro.com    )

and                    )

tom.van.vonderen@nl.abnamro.com    )

The Original Lender

ABN AMRO Bank N.V.    )

)

By:/s/ Ian Mace

Ian Mace

Attorney-in-Fact    )

The Swap Provider

ABN AMRO Bank N.V.    )

)

By:/s/ Ian Mace

Ian Mace

Attorney-in-Fact    )

)

Address:     )

Coolsingel 93                )

3012 AE Rotterdam            )

The Netherlands        )

Fax no.: +31 10 401 5323         )

Department/Officer:             )

ECT / Transportation Mid-Office        )

Email:                    )

magda.braam-heijnen@nl.abnamro.com,    )

alper.sanliunal@nl.abnamro.com,        )

martijn.m.van.den.berg@nl.abnamro.com    )

and                    )

tom.van.vonderen@nl.abnamro.com    )

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The Sinosure Agent

ABN AMRO Bank N.V.,    )

Singapore Branch    )

)

By:/s/ Erwin E. Boon

Erwin E. Boon

Head Global Export & Project Finance- Asia

By:/s/ Arnoud Sprangers

Arnoud Sprangers

Head of Debt Solutions, Asia    )

)

Address:     )

One Raffles Quay        )

South Tower, #26        )

Singapore 048583        )

Department/Officer: Erwin Boon /         )

Jacqueline Kingcott         )

Email:        )

erwin.boon@sg.abnamro.com and        )

jacqueline.kingcott@sg.abnamro.com        )

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EX-8.1

Exhibit 8.1

Scorpio Bulkers Inc.

Subsidiaries

Subsidiary	Jurisdiction of Incorporation
SBI Achilles Shipping Company Limited	Republic of the Marshall Islands
SBI Alhambra Shipping Company Limited	Republic of the Marshall Islands
SBI Antares Shipping Company Limited	Republic of the Marshall Islands
SBI Apollo Shipping Company Limited	Republic of the Marshall Islands
SBI Aroma Shipping Company Limited	Republic of the Marshall Islands
SBI Athena Shipping Company Limited	Republic of the Marshall Islands
SBI Avanti Shipping Company Limited	Republic of the Marshall Islands
SBI Behike Shipping Company Limited	Republic of the Marshall Islands
SBI Belicoso Shipping Company Limited	Republic of the Marshall Islands
SBI Bolero Shipping Company Limited	Republic of the Marshall Islands
SBI Bravo Shipping Company Limited	Republic of the Marshall Islands
SBI Cakewalk Shipping Company Limited	Republic of the Marshall Islands
SBI Camacho Shipping Company Limited	Republic of the Marshall Islands
SBI Capoeira Shipping Company Limited	Republic of the Marshall Islands
SBI Carioca Shipping Company Limited	Republic of the Marshall Islands
SBI Charleston Shipping Company Limited	Republic of the Marshall Islands
SBI Chartering and Trading Ltd	Republic of the Marshall Islands
SBI Churchill Shipping Company Limited	Republic of the Marshall Islands
SBI Cohiba Shipping Company Limited	Republic of the Marshall Islands
SBI Conga Shipping Company Limited	Republic of the Marshall Islands
SBI Corona Shipping Company Limited	Republic of the Marshall Islands
SBI Cronos Shipping Company Limited	Republic of the Marshall Islands
SBI Cuaba Shipping Company Limited	Republic of the Marshall Islands
SBI Diadema Shipping Company Limited	Republic of the Marshall Islands
SBI Echo Shipping Company Limited	Republic of the Marshall Islands
SBI Electra Shipping Company Limited	Republic of the Marshall Islands
SBI Estupendo Shipping Company Limited	Republic of the Marshall Islands
SBI Flamenco Shipping Company Limited	Republic of the Marshall Islands
SBI Habano Shipping Company Limited	Republic of the Marshall Islands
SBI Hera Shipping Company Limited	Republic of the Marshall Islands
SBI Hercules Shipping Company Limited	Republic of the Marshall Islands
SBI Hermes Shipping Company Limited	Republic of the Marshall Islands
SBI Hydra Shipping Company Limited	Republic of the Marshall Islands
SBI Hyperion Shipping Company Limited	Republic of the Marshall Islands
SBI Jive Shipping Company Limited	Republic of the Marshall Islands
SBI Kratos Shipping Company Limited	Republic of the Marshall Islands
SBI Lambada Shipping Company Limited	Republic of the Marshall Islands
SBI Leo Shipping Company Limited	Republic of the Marshall Islands
SBI Lonsdale Shipping Company Limited	Republic of the Marshall Islands
SBI Lyra Shipping Company Limited	Republic of the Marshall Islands
SBI Macanudo Shipping Company Limited	Republic of the Marshall Islands

Subsidiary	Jurisdiction of Incorporation
SBI Macarena Shipping Company Limited	Republic of the Marshall Islands
SBI Maduro Shipping Company Limited	Republic of the Marshall Islands
SBI Magnum Shipping Company Limited	Republic of the Marshall Islands
SBI Maia Shipping Company Limited	Republic of the Marshall Islands
SBI Mazurka Shipping Company Limited	Republic of the Marshall Islands
SBI Merengue Shipping Company Limited	Republic of the Marshall Islands
SBI Montecristo Shipping Company Limited	Republic of the Marshall Islands
SBI Monterrey Shipping Company Limited	Republic of the Marshall Islands
SBI Montesino Shipping Company Limited	Republic of the Marshall Islands
SBI Orion Shipping Company Limited	Republic of the Marshall Islands
SBI Panatela Shipping Company Limited	Republic of the Marshall Islands
SBI Parapara Shipping Company Limited	Republic of the Marshall Islands
SBI Parejo Shipping Company Limited	Republic of the Marshall Islands
SBI Partagas Shipping Company Limited	Republic of the Marshall Islands
SBI Pegasus Shipping Company Limited	Republic of the Marshall Islands
SBI Perfecto Shipping Company Limited	Republic of the Marshall Islands
SBI Perseus Shipping Company Limited	Republic of the Marshall Islands
SBI Phoebe Shipping Company Limited	Republic of the Marshall Islands
SBI Phoenix Shipping Company Limited	Republic of the Marshall Islands
SBI Poseidon Shipping Company Limited	Republic of the Marshall Islands
SBI Presidente Shipping Company Limited	Republic of the Marshall Islands
SBI Puro Shipping Company Limited	Republic of the Marshall Islands
SBI Reggae Shipping Company Limited	Republic of the Marshall Islands
SBI Robusto Shipping Company Limited	Republic of the Marshall Islands
SBI Rock Shipping Company Limited	Republic of the Marshall Islands
SBI Rumba Shipping Company Limited	Republic of the Marshall Islands
SBI Salsa Shipping Company Limited	Republic of the Marshall Islands
SBI Samba Shipping Company Limited	Republic of the Marshall Islands
SBI Samson Shipping Company Limited	Republic of the Marshall Islands
SBI Sousta Shipping Company Limited	Republic of the Marshall Islands
SBI Subaru Shipping Company Limited	Republic of the Marshall Islands
SBI Swing Shipping Company Limited	Republic of the Marshall Islands
SBI Tango Shipping Company Limited	Republic of the Marshall Islands
SBI Tethys Shipping Company Limited	Republic of the Marshall Islands
SBI Thalia Shipping Company Limited	Republic of the Marshall Islands
SBI Toro Shipping Company Limited	Republic of the Marshall Islands
SBI Tuscamina Shipping Company Limited	Republic of the Marshall Islands
SBI Twist Shipping Company Limited	Republic of the Marshall Islands
SBI Ursa Shipping Company Limited	Republic of the Marshall Islands
SBI Valrico Shipping Company Limited	Republic of the Marshall Islands
SBI Zeus Shipping Company Limited	Republic of the Marshall Islands
SBI Zumba Shipping Company Limited	Republic of the Marshall Islands
Scorpio SALT LLC	Delaware
Bedford Shipping Limited	Malta
Belgrave Shipping Limited	Malta

Subsidiary	Jurisdiction of Incorporation
Caithness Shipping Limited	Malta
Cavendish Shipping Limited	Malta
Fitzroy Shipping Limited	Malta
Grosvenor Shipping Limited	Malta
Skegness Shipping Limited	Malta
Sloane Shipping Limited	Malta
St. James's Shipping Limited	Malta

EX-12.1

Exhibit 12.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

I, Emanuele A. Lauro, certify that:

1. I have reviewed this annual report on Form 20-F of Scorpio Bulkers Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date:	April 2, 2015
	/s/ Emanuele A. Lauro
Name:	Emanuele A. Lauro
Title:	Chief Executive Officer (Principal Executive Officer)

EX-12.2

Exhibit 12.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

I, Hugh Baker, certify that:

1. I have reviewed this annual report on Form 20-F of Scorpio Bulkers Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date:	April 2, 2015
	/s/ Hugh Baker
Name:	Hugh Baker
Title:	Chief Financial Officer (Principal Financial Officer)

EX-13.1

Exhibit 13.1

PRINCIPAL EXECUTIVE OFFICER CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with this Annual Report of Scorpio Bulkers Inc. (the “Company”) on Form 20-F for the year ended December 31, 2014 as filed with the Securities and Exchange Commission (the “SEC”) on or about the date hereof (the “Report”), I, Emanuele A. Lauro, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

Date:	April 2, 2015
	/s/ Emanuele A. Lauro
Name:	Emanuele A. Lauro
Title:	Chief Executive Officer (Principal Executive Officer)

EX-13.2

Exhibit 13.2

PRINCIPAL EXECUTIVE OFFICER CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with this Annual Report of Scorpio Bulkers Inc. (the “Company”) on Form 20-F for the year ended December 31, 2014 as filed with the Securities and Exchange Commission (the “SEC”) on or about the date hereof (the “Report”), I, Hugh Baker, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

Date:	April 2, 2015
	/s/ Hugh Baker
Name:	Hugh Baker
Title:	Chief Financial Officer (Principal Financial Officer)

EX-15.1

Exhibit 15.1

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in the Registration Statement on Form F-3 (No. 333-201354) of Scorpio Bulkers Inc. of our report dated April 1, 2015 relating to the consolidated financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 20-F.

/s/ PricewaterhouseCoopers Audit

PricewaterhouseCoopers Audit

Monaco, Principality of Monaco

April 1, 2015

EX-15.2

XML

Cash Flow Information (DetailsTextual) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2014
Construction in Progress Expenditures Incurred but Not yet Paid		$ 7,568
non-cash operating activities related to deferred financing cost		532
Costs of issuing common stock- not yet paid	665	357
Transfer from vessel under construction to vessels		67,319
Interest Paid		1,273
Interest Costs Capitalized		1,600
Assets Held-for-sale [Member]
Transfer from vessel under construction to vessels		$ 97,103

XML

Accounts Payable and Accrued Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Payables and Accruals [Abstract]
Accounts Payable	$ 7,934	$ 591
Accrued Liabilities	6,111	41
Other Accrued Liabilities	1,766	840
Accounts Payable and Accrued Liabilities, Current	$ 15,811	$ 1,472

XML

Assets Held for Sale (Details)	12 Months Ended
	Dec. 31, 2014 DWT
DWT	7,399,400
Assets Held-for-sale [Member]
DWT	765,600
Capesize converted to LR2 Tankers [Member]
DWT	684,000
Capesize converted to LR2 Tankers [Member] | Hull S3120 - TBN Parejo [Member] | Sungdong Shipbuilding & Marine Engineering Co., Ltd. [Member] | Q3-16 [Member]
DWT	115,000
Capesize converted to LR2 Tankers [Member] | Hull H.5004 - TBN SBI Cuaba [Member] | Daehan Shipbuilding Co., Ltd. [Member] | Q2-16 [Member]
DWT	115,000
Capesize converted to LR2 Tankers [Member] | Hull H.5003 - TBN SBI Macanudo [Member] | Daehan Shipbuilding Co., Ltd. [Member] | Q1-16 [Member]
DWT	115,000
Capesize converted to LR2 Tankers [Member] | Hull H5024 - TBN SBI Robusto [Member] | Daewoo Mangalia Heavy Industries S.A. [Member] | Q1-17 [Member]
DWT	112,000
Capesize converted to LR2 Tankers [Member] | Hull S3121 - TBN SBI Tuscamina [Member] | Sungdong Shipbuilding & Marine Engineering Co., Ltd. [Member] | Q3-16 [Member]
DWT	115,000
Capesize converted to LR2 Tankers [Member] | Hull H5023 - TBN SBI Panatela [Member] | Daewoo Mangalia Heavy Industries S.A. [Member] | Q4-16 [Member]
DWT	112,000
Kamsarmax Vessels [Member]
DWT	1,643,600
Kamsarmax Vessels [Member] | Q3-15 [Member]
DWT	81,600
Kamsarmax Vessels [Member] | Hull SS164-TBN SBI Salsa [Member] | Tsuneishi Group (Zhoushan) Shipbuilding Inc. [Member] | Q3-15 [Member]
DWT	81,600

XML

Segments (Details 1) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013	Mar. 20, 2013
Numbers of vessels owned	2
Assets	$ 1,324,205	$ 1,105,684
Cash and cash equivalents	272,673	733,896	0
Other	19,543	35
Capesize [Member]
Assets	438,256	54,772
Kamsarmax
Assets	236,278	132,114
Scorpio Ultramax Pool
Assets	288,828	184,905
Corporate Segment [Member]
Cash and cash equivalents	265,818	733,818
Other	$ 95,025	$ 75

XML

Common Shares (Details Textual) (USD $)	9 Months Ended			12 Months Ended	3 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2013	Dec. 31, 2014	Sep. 30, 2014	Nov. 20, 2014	Jan. 31, 2014	Dec. 17, 2013	Nov. 30, 2013	Oct. 31, 2013	Sep. 24, 2013	Jul. 16, 2013	Mar. 20, 2013	Nov. 30, 2014	Jul. 31, 2013
Common Stock, Shares, Issued		133,403,931		180,299,695		40,000,000	4,695,000	31,300,000	32,590,411		33,400,000	31,250,000	1,500
Shares Issued, Price Per Share							$ 9.75
Common Stock, Par or Stated Value Per Share		$ 0.01		$ 0.01		$ 0.01						$ 0.01
Proceeds from Issuance of Common Stock		$ 1,334,000		$ 1,803,000		$ 150,000,000	$ 42,360,000	$ 284,018,000	$ 291,000,000			$ 242,800,000
Receivable from Shareholders or Affiliates for Issuance of Capital Stock											289,956
Proceeds from Issuance of Common Stock		1,107,825,000	290,490,000	187,615,000
Entity Common Stock, Shares Outstanding				180,299,695
Additional Paid in Capital		1,109,185,000		1,321,057,000						288,822,000
Foreign Currency Transaction Gain (Loss), Realized	1,134,000
Scorpio Services Holding Limited
Common Stock, Shares, Issued	52,394				52,394	4,000,000								4,000,000	1,250,000
Proceeds from Issuance of Common Stock						15,000,000								15,000	10,000
Year Built 2014 [Member] | Kamsarmax [Member]
Number of vessels owned				2
Year Built 2014 [Member] | Kamsarmax [Member] | Scorpio Services Holding Limited
Number of vessels owned				2
Proceeds from Issuance of Common Stock					$ 500,000

XML

Vessels under construction (Details1)	12 Months Ended
	Dec. 31, 2014 DWT
Vessels under construction rollforward [Roll Forward]
DWT	7,399,400
Contracts to acquire New Vessels	71
Capesize [Member]
Vessels under construction rollforward [Roll Forward]
DWT	3,960,000
Contracts to acquire New Vessels	22
Capesize [Member] | Capesize - Hull H1309 TBN SBI Puro | Q1-15 [Member] | Shanghai Waigaoqiao Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	180,000
Capesize [Member] | Capesize Hull H1310 - TBN SBI Valrico | Q3-15 [Member] | Shanghai Waigaoqiao Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	180,000
Capesize [Member] | Capesize Hull H1311 - TBN SBI Maduro | Q4-15 [Member] | Shanghai Waigaoqiao Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	180,000
Capesize [Member] | Capesize Hull H1364 - TBN SBI Belicoso | Q3-15 [Member] | Shanghai Waigaoqiao Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	180,000
Capesize [Member] | Capesize Hull H1365 - TBN SBI Corona | Q1-16 [Member] | Shanghai Waigaoqiao Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	180,000
Capesize [Member] | Capesize Hull H1366 - TBN SBI Diadema | Q1-16 [Member] | Shanghai Waigaoqiao Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	180,000
Capesize [Member] | Capesize Hull H1367 - TBN SBI Estupendo | Q2-16 [Member] | Shanghai Waigaoqiao Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	180,000
Capesize [Member] | Capesize Hull S1205 - TBN SBI Camacho | Q2-15 [Member] | Sungdong Shipbuilding & Marine Engineering Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	180,000
Capesize [Member] | Capesize Hull S1206 - TBN SBI Montesino | Q2-15 [Member] | Sungdong Shipbuilding & Marine Engineering Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	180,000
Capesize [Member] | Capesize Hull S1211 - TBN SBI Magnum | Q2-15 [Member] | Sungdong Shipbuilding & Marine Engineering Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	180,000
Capesize [Member] | Capesize Hull S1212 - TBN SBI Montecristo | Q3-15 [Member] | Sungdong Shipbuilding & Marine Engineering Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	180,000
Capesize [Member] | Capesize Hull S1213 - TBN SBI Aroma | Q3-15 [Member] | Sungdong Shipbuilding & Marine Engineering Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	180,000
Capesize [Member] | Capesize Hull S1214 - TBN SBI Cohiba | Q4-15 [Member] | Sungdong Shipbuilding & Marine Engineering Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	180,000
Capesize [Member] | Capesize Hull S1215 - TBN SBI Habano | Q1-16 [Member] | Sungdong Shipbuilding & Marine Engineering Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	180,000
Capesize [Member] | Capesize Hull S1216 - TBN SBI Lonsdale | Q4-15 [Member] | Sungdong Shipbuilding & Marine Engineering Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	180,000
Capesize [Member] | Capesize Hull S1217 - TBN SBI Partagas | Q1-16 [Member] | Sungdong Shipbuilding & Marine Engineering Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	180,000
Capesize [Member] | Capesize Hull S1219 - TBN SBI Toro | Q2-16 [Member] | Sungdong Shipbuilding & Marine Engineering Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	180,000
Capesize [Member] | Capesize Hull H1059 - TBN SBI Churchill | Q4-15 [Member] | Daewoo Mangalia Heavy Industries S.A. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	180,000
Capesize [Member] | Capesize Hull H1060 - TBN SBI Perfecto | Q1-16 [Member] | Daewoo Mangalia Heavy Industries S.A. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	180,000
Capesize [Member] | Capeize Hull H1061 -TBN SBI Presidente [Member] | Q2-16 [Member] | Daewoo Mangalia Heavy Industries S.A. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	180,000
Capesize [Member] | Capesize Hull HN1058 - TBN SBI Behike | Q4-15 [Member] | Daehan Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	180,000
Capesize [Member] | Hull HN1059 -TBN SBI Monterrey [Member] | Q4-15 [Member] | Daehan Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	180,000
Kamsarmax Vessels [Member]
Vessels under construction rollforward [Roll Forward]
DWT	1,643,600
Contracts to acquire New Vessels	20
Kamsarmax Vessels [Member] | Q3-15 [Member]
Vessels under construction rollforward [Roll Forward]
DWT	81,600
Kamsarmax Vessels [Member] | Kamsarmax Hull S1680 - TBN SBI Samba | Q1-15 [Member] | Imabari Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	84,000
Kamsarmax Vessels [Member] | Kamsarmax Hull S1681 - TBN SBI Rumba | Q3-15 [Member] | Imabari Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	84,000
Kamsarmax Vessels [Member] | Kamsarmax Hull 1090 - TBN SBI Electra | Q3-15 [Member] | Jiangsu Yangzijiang Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	82,000
Kamsarmax Vessels [Member] | Kamsarmax Hull 1091 - TBN SBI Flamenco | Q3-15 [Member] | Jiangsu Yangzijiang Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	82,000
Kamsarmax Vessels [Member] | Kamsarmax Hull 1092 - TBN SBI Rock | Q4-15 [Member] | Jiangsu Yangzijiang Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	82,000
Kamsarmax Vessels [Member] | Kamsarmax Hull 1093 - TBN SBI Twist | Q1-16 [Member] | Jiangsu Yangzijiang Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	82,000
Kamsarmax Vessels [Member] | Kamsarmax Hull SS179 - TBN SBI Merengue | Q1-16 [Member] | Tsuneishi Group (Zhoushan) Shipbuilding Inc. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	81,600
Kamsarmax Vessels [Member] | Kamsarmax Hull S1228 - TBN SBI Capoeira | Q2-15 [Member] | Hudong-Zhonghua (Group) Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	82,000
Kamsarmax Vessels [Member] | Kamsarmax Hull S1722A - TBN SBI Conga | Q2-15 [Member] | Hudong-Zhonghua (Group) Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	82,000
Kamsarmax Vessels [Member] | Kamsarmax Hull S1723A - TBN SBI Bolero | Q3-15 [Member] | Hudong-Zhonghua (Group) Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	82,000
Kamsarmax Vessels [Member] | Kamsarmax Hull S1229 - TBN SBI Carioca | Q3-15 [Member] | Hudong-Zhonghua (Group) Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	82,000
Kamsarmax Vessels [Member] | Kamsarmax Hull S1724A - TBN SBI Sousta | Q3-15 [Member] | Hudong-Zhonghua (Group) Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	82,000
Kamsarmax Vessels [Member] | Kamsarmax Hull S1725A - TBN SBI Reggae | Q4-15 [Member] | Hudong-Zhonghua (Group) Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	82,000
Kamsarmax Vessels [Member] | Kamsarmax Hull S1726A - TBN SBI Zumba | Q1-16 [Member] | Hudong-Zhonghua (Group) Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	82,000
Kamsarmax Vessels [Member] | Kamsarmax Hull S1231 - TBN SBI Macarena | Q1-16 [Member] | Hudong-Zhonghua (Group) Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	82,000
Kamsarmax Vessels [Member] | Kamsarmax Hull S1735A - TBN SBI Parapara | Q2-16 [Member] | Hudong-Zhonghua (Group) Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	82,000
Kamsarmax Vessels [Member] | Kamsarmax Hull S1736A - TBN SBI Mazurka | Q2-16 [Member] | Hudong-Zhonghua (Group) Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	82,000
Kamsarmax Vessels [Member] | Kamsarmax Hull S1230 - TBN SBI Lambada | Q3-15 [Member] | Hudong-Zhonghua (Group) Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	82,000
Kamsarmax Vessels [Member] | Kamsarmax Hull S1232 - TBN SBI Swing | Q2-16 [Member] | Hudong-Zhonghua (Group) Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	82,000
Kamsarmax Vessels [Member] | Kamsarmax Hull S1233 - TBN SBI Jive | Q3-16 [Member] | Hudong-Zhonghua (Group) Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	82,000
Ultramax Vessels [Member]
Vessels under construction rollforward [Roll Forward]
DWT	1,795,800
Contracts to acquire New Vessels	29
Ultramax Vessels [Member] | Ultramax Hull 1907 - TBN SBI Hera | Q2-16 [Member] | Mitsui Engineering & Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	60,200
Ultramax Vessels [Member] | Ultramax Hull 1906 - TBN SBI Zeus | Q2-16 [Member] | Mitsui Engineering & Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	60,200
Ultramax Vessels [Member] | Ultramax Hull 1911 - TBN SBI Poseidon | Q2-16 [Member] | Mitsui Engineering & Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	60,200
Ultramax Vessels [Member] | Ultramax Hull 1912 - TBN SBI Apollo | Q2-16 [Member] | Mitsui Engineering & Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	60,200
Ultramax Vessels [Member] | Ultramax Hull S870 - TBN SBI Echo | Q3-15 [Member] | Imabari Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	61,000
Ultramax Vessels [Member] | Ultramax Hull S871 - TBN SBI Tango | Q3-15 [Member] | Imabari Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	61,000
Ultramax Vessels [Member] | Ultramax Hull S-A098 - TBN SBI Achilles | Q4-15 [Member] | Imabari Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	61,000
Ultramax Vessels [Member] | Ultramax Hull S-A089 - TBN SBI Cronos | Q4-15 [Member] | Imabari Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	61,000
Ultramax Vessels [Member] | Ultramax Hull S-A090 - TBN SBI Hermes | Q1-16 [Member] | Imabari Shipbuilding Co., Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	61,000
Ultramax Vessels [Member] | Ultramax Hull NE180 - TBN SBI Bravo | Q1-15 [Member] | Nantong COSCO KHI Ship Engineering Co. Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	61,000
Ultramax Vessels [Member] | Ultramax Hull NE181 - TBN SBI Antares | Q1-15 [Member] | Nantong COSCO KHI Ship Engineering Co. Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	61,000
Ultramax Vessels [Member] | Ultramax Hull NE182 - TBN SBI Maia | Q3-15 [Member] | Nantong COSCO KHI Ship Engineering Co. Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	61,000
Ultramax Vessels [Member] | Ultramax Hull NE183 - TBN SBI Hydra | Q3-15 [Member] | Nantong COSCO KHI Ship Engineering Co. Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	61,000
Ultramax Vessels [Member] | Ultramax Hull NE194 - TBN SBI Hyperion | Q2-16 [Member] | Nantong COSCO KHI Ship Engineering Co. Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	61,000
Ultramax Vessels [Member] | Ultramax Hull NE195 - TBN SBI Tethys | Q2-16 [Member] | Nantong COSCO KHI Ship Engineering Co. Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	61,000
Ultramax Vessels [Member] | Ultramax Hull DE018 - TBN SBI Leo | Q1-15 [Member] | Dalian COSCO KHI Ship Engineering Co. Ltd.
Vessels under construction rollforward [Roll Forward]
DWT	61,000
Ultramax Vessels [Member] | Ultramax Hull DE019 - TBN SBI Lyra | Q2-15 [Member] | Dalian COSCO KHI Ship Engineering Co. Ltd.
Vessels under construction rollforward [Roll Forward]
DWT	61,000
Ultramax Vessels [Member] | Ultramax Hull DE020 - TBN SBI Subaru | Q2-15 [Member] | Dalian COSCO KHI Ship Engineering Co. Ltd.
Vessels under construction rollforward [Roll Forward]
DWT	61,000
Ultramax Vessels [Member] | Ultramax Hull DE021 - TBN SBI Ursa | Q3-15 [Member] | Dalian COSCO KHI Ship Engineering Co. Ltd.
Vessels under construction rollforward [Roll Forward]
DWT	61,000
Ultramax Vessels [Member] | Ultramax Hull CX0610 - TBN SBI Athena | Q1-15 [Member] | Chengxi Shipyard Co. Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	64,000
Ultramax Vessels [Member] | Ultramax Hull CX0651 - TBN SBI Pegasus | Q3-15 [Member] | Chengxi Shipyard Co. Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	64,000
Ultramax Vessels [Member] | Ultramax Hull CX0652 - TBN SBI Orion | Q4-15 [Member] | Chengxi Shipyard Co. Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	64,000
Ultramax Vessels [Member] | Ultramax Hull CX0612 - TBN SBI Thalia | Q4-15 [Member] | Chengxi Shipyard Co. Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	64,000
Ultramax Vessels [Member] | Ultramax Hull CX0653 - TBN SBI Hercules | Q4-15 [Member] | Chengxi Shipyard Co. Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	64,000
Ultramax Vessels [Member] | Ultramax Hull CX0627 - TBN SBI Perseus | Q1-16 [Member] | Chengxi Shipyard Co. Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	64,000
Ultramax Vessels [Member] | Ultramax Hull CX0654 - TBN SBI Kratos | Q1-16 [Member] | Chengxi Shipyard Co. Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	64,000
Ultramax Vessels [Member] | Ultramax Hull CX0655 - TBN SBI Samson | Q2-16 [Member] | Chengxi Shipyard Co. Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	64,000
Ultramax Vessels [Member] | Ultramax Hull CX0613 - TBN SBI Phoebe | Q3-16 [Member] | Chengxi Shipyard Co. Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	64,000
Ultramax Vessels [Member] | Ultramax Hull CX0656 - TBN SBI Phoenix | Q3-16 [Member] | Chengxi Shipyard Co. Ltd. [Member]
Vessels under construction rollforward [Roll Forward]
DWT	64,000

XML

Debt (Tables)

12 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Outstanding and available debt balances [Table Text Block]

A summary of our outstanding balances and amounts available under our four credit facilities as of December 31, 2014 is as follows:

	As of December 31, 2014
	Amount outstanding		Amount available
$39.6 Million Credit Facility	33,550		—
$330 Million Credit Facility	—		330,000
$67.5 Million Credit Facility	—		67,500
$408.976 Million Credit Facility	—		408,976
Total	$	33,550	$	806,476

Schedule of Debt [Table Text Block]

The Company’s long-term debt consists of Senior Notes and bank loans, summarized as follows:

	December 31, 2014			December 31, 2013
Senior Notes	$	73,625		$	—
Bank Loans:
$39.6 Million Credit Facility	$	33,550		$	—
Less: Current portion	(3,300		)	—
	$	30,250		$	—

Schedule of Maturities of Long-term Debt [Table Text Block]

The future principal repayments under the Company’s long-term debt over the next five years is as follows:

	Year ending December 31,
	2015	2016	2017	2018	2019	Total
Senior Notes	—	—	—	—	73,625	73,625
$39.6 Million Credit Facility	3,300	3,300	2,260	2,260	22,430	33,550
Total	3,300	3,300	2,260	2,260	96,055	107,175

XML

Unaudited Quarterly Results Unaudited Quarterly Results Textural (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2014
Quarterly Financial Information Disclosure [Abstract]
Gain (Loss) on Disposition of Assets	$ 0	$ (55,487)

XML

Equity Incentive Plan (Details 1) (Restricted Stock [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014
2015	$ 22,465
2016	12,230
2017	4,836
2018	227
Allocated Share-based Compensation Expense	39,758
September 30, 2013 [Member]
2015	8,456
2016	4,330
2017	1,506
2018	0
Allocated Share-based Compensation Expense	14,292
November 6, 2013 [Member]
2015	4,463
2016	2,367
2017	940
2018	0
Allocated Share-based Compensation Expense	7,770
December 17, 2013 [Member]
2015	2,335
2016	1,221
2017	474
2018	0
Allocated Share-based Compensation Expense	4,030
February 21, 2014 [Member]
2015	6,976
2016	4,172
2017	1,854
2018	220
Allocated Share-based Compensation Expense	13,222
May 20, 2014 [Member]
2015	235
2016	140
2017	62
2018	7
Allocated Share-based Compensation Expense	$ 444

XML

Segments (Details Textual) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014 DWT	Dec. 31, 2013
Number of Reportable Segments	3
DWT	7,399,400
Due to related parties	$ 1,231	$ 0
Ultramax Vessels [Member]
DWT	1,795,800
Ultramax Vessels [Member] | Minimum [Member]
DWT	60,200
Ultramax Vessels [Member] | Maximum [Member]
DWT	64,000
Kamsarmax Vessels [Member]
DWT	1,643,600
Kamsarmax Vessels [Member] | Minimum [Member]
DWT	81,600
Kamsarmax Vessels [Member] | Maximum [Member]
DWT	84,000
Scorpio Services Holding Limited
Due to related parties	$ 56
Time chartered vessels [Member]
Number of Reportable Segments	2
Ultramax pool [Member] | Ultramax Vessels [Member] | Minimum [Member]
DWT	48,500
Ultramax pool [Member] | Ultramax Vessels [Member] | Maximum [Member]
DWT	61,000
Kamsarmax pool [Member] | Kamsarmax Vessels [Member] | Minimum [Member]
DWT	75,500
Kamsarmax pool [Member] | Kamsarmax Vessels [Member] | Maximum [Member]
DWT	98,700
Capesize pool [Member] | Kamsarmax Vessels [Member] | Maximum [Member]
DWT	180,000

XML

General information and significant accounting policies (policies)

12 Months Ended

Dec. 31, 2014

General Information And Significant Accounting Policies Policies

Business Description and Basis of Presentation [Text Block]

Company

Scorpio Bulkers Inc. and its subsidiaries (together “we”, “us” or the “Company”) is a company formed for the purpose of acquiring and operating the latest generation newbuilding drybulk carriers with fuel-efficient specifications and carrying capacities of greater than 30,000 dwt in the international shipping markets. Scorpio Bulkers Inc. was incorporated in the Republic of the Marshall Islands on March 20, 2013.

As of the report date, which was December 31, 2014, the Company owns two Kamsarmax vessels and has ordered 71 newbuilding drybulk carriers, which it intends to operate. The Company also has one Kamsarmax vessel contract and six contracts for the construction of LR2 tankers which are classified on the balance sheet as assets held for sale.

Our vessels are commercially managed by Scorpio Commercial Management S.A.M. (“SCM”), which is majority owned by the Lolli-Ghetti family of which, Emanuele Lauro, our Chairman and Chief Executive Officer is a member. SCM’s services include securing employment, in pools, in the spot market and on time charters.

Our vessels are technically managed by Scorpio Ship Management S.A.M. (“SSM”), which is majority owned by the Lolli-Ghetti family. SSM facilitates vessel support such as crew, provisions, deck and engine stores, insurance, maintenance and repairs, and other services as necessary to operate the vessels such as drydocks and vetting/inspection under a technical management agreement.

We also have an administrative services agreement with Scorpio Services Holding Ltd. (“SSH”), which is majority owned by the Lolli-Ghetti family. The administrative services provided under this agreement primarily include accounting, legal compliance, financial, information technology services, and the provision of administrative staff and office space, which are contracted to SCM. We pay our managers fees for these services and reimburse them for direct or indirect expenses that they incur in providing these services. 

Basis of Accounting [Text Block]

Basis of accounting

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany accounts and transactions have been eliminated in consolidation.

Going Concern Note

Going concern

The Company’s revenue is derived from time charter revenue, voyage revenue and pool revenue. The bulker shipping industry is volatile and has been experiencing a sustained cyclical downturn. If the downturn continues, this could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows.

The fair market values of the Company’s vessels also experience high volatility. The fair market value of the vessels may increase and decrease depending on a number of factors including, but not limited to, the prevailing level of charter rates and day rates, general economic and market conditions affecting the international shipping industry, types, sizes and ages of vessels, supply and demand for vessels, availability of or developments in other modes of transportation, competition from other shipping companies, cost of newbuildings, governmental or other regulations and technological advances. In addition, as vessels grow older, they generally decline in value. If the fair market value of vessels declines, the Company may not be in compliance with certain provisions of its credit facilities and it may not be able to refinance its debt and obtain additional financing. The prepayment of certain credit facilities may be necessary to cause the Company to maintain compliance with certain covenants in the event that the value of its vessels falls below a certain level. Additionally, if the Company sells one or more of its vessels at a time when vessel prices have fallen, the sale price may be less than the vessel’s carrying value on its consolidated financial statements, resulting in a loss on sale or an impairment loss being recognized, ultimately leading to a reduction in earnings. Furthermore, if vessel values fall significantly, this could indicate a decrease in the recoverable amount for the vessel which may result in an impairment adjustment in the carrying value of the vessel.

As described in Note 8, the Company has commitments to pay for its vessels currently under construction that exceed the amount of financing presently secured for these. If the Company is not able to borrow additional funds, raise other capital or utilize available cash on hand, it may not be able to acquire these newbuilding vessels, which could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows.

These consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, nor to the amounts and classification of liabilities that may be necessary should the Company be unable to continue as a going concern.

Development Stage Enterprise General Disclosures [Text Block]

Additional information-Development stage company

The Company reported in its December 31, 2013 financial statements that it was a “development stage company”.  In June 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-10, which removes the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinctions between development stage entities and other reporting entities from U.S. GAAP.  Therefore, this Update removes retrospectively all incremental financial reporting requirements for development stage entities.

This Update is effective for annual reporting periods beginning after December 15, 2014, and interim periods therein.  Entities are allowed to apply such guidance early for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued.  The Company elected to adopt this guidance during the second quarter ended June 30, 2014.

Use of Estimates, Policy [Policy Text Block]

Accounting estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

In addition to the estimates noted above, significant estimates will include vessel valuations, residual value of vessels, useful life of vessels and the fair value of derivative instruments.

Segment Reporting, Policy [Policy Text Block]

During 2014, the Company placed its time chartered-in vessels into two pools, the Scorpio Ultramax Pool, in which the Company placed its time chartered-in vessels ranging from 48,500 DWT to 61,000 DWT, and the Scorpio Kamsarmax Pool in which the Company placed its two owned Kamsarmax vessels and its time chartered-in vessels ranging from 75,500 DWT to 98,700 DWT. In addition to the Company’s Ultramax and Kamsarmax segments, the Company has identified a third Capesize segment which includes vessels of approximately 180,000 DWT. Although each vessel within its respective class qualifies as an operating segment under U.S. GAAP, each vessel also exhibits similar long-term financial performance and similar economic characteristics to the other vessels within the respective vessel class, thereby meeting the aggregation criteria in U.S. GAAP. We have therefore chosen to present our segment information by vessel class using the aggregated information from the individual vessels.

The Company’s vessels regularly move between countries in international waters, over dozens of trade routes and, as a result, the disclosure of financial information about geographic areas is impracticable.

Certain of the corporate general and administrative expenses incurred by the Company are not attributable to any specific segment. Accordingly, these costs are not allocated to any of the Company’s segments and are included in the results below as “Corporate”.

Revenue Recognition, Policy [Policy Text Block]

Revenue recognition

Vessel revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of discounts, and other sales-related or value added taxes.

Vessel revenue is comprised of either time charter revenue, voyage revenue and/or pool revenue.

(1) Time charter revenue is recognized ratably as services are performed based on the daily rates specified in the time charter contract. We do not recognize revenue when a vessel is off hire.

(2) Voyage charter agreements are charter hires, where a contract is made in the spot market for the use of a vessel for a specific voyage for a specified charter rate. Revenue from voyage charter agreements is recognized on a pro rata basis based on the relative transit time in each period. The period over which voyage revenues are recognized commences at the time the vessel departs from its last discharge port and ends at the time the discharge of cargo at the next discharge port is completed. We do not begin recognizing revenue until a charter has been agreed to by the customer and us, even if the vessel has discharged its cargo and is sailing to the anticipated load port on its next voyage. Estimated losses on voyages are provided for in full at the time such losses become evident. In the application of this policy, we do not begin recognizing revenue until (i) the amount of revenue can be measured reliably, (ii) it is probable that the economic benefits associated with the transaction will flow to the entity, (iii) the transactions’ stage of completion at the balance sheet date can be measured reliably and (iv) the costs incurred and the costs to complete the transaction can be measured reliably.

(3) Pool revenue for each vessel is determined in accordance with the profit sharing terms specified within each pool agreement. In particular, the pool manager aggregates the revenues and expenses of all of the pool participants and distributes the net earnings to participants based on:

• the pool points (vessel attributes such as cargo carrying capacity, fuel consumption, and construction characteristics are taken into consideration); and

• the number of days the vessel participated in the pool in the period.

We recognize pool revenue on a monthly basis, when the vessel has participated in a pool during the period and the amount of pool revenue for the month can be estimated reliably. We receive estimated vessel earnings based on the known number of days the vessel has participated in the pool, the contract terms, and the estimated monthly pool revenue. On a quarterly basis, we receive a report from the pool which identifies the number of days the vessel participated in the pool, the total pool points for the period, the total pool revenue for the period, and the calculated share of pool revenue for the vessel. We review the quarterly report for consistency with each vessel’s pool agreement and vessel management records. The estimated pool revenue is reconciled quarterly, coinciding with our external reporting periods, to the actual pool revenue earned, per the pool report. Consequently, in our financial statements, reported revenues represent actual pooled revenues. While differences do arise in the performance of these quarterly reconciliations, such differences are not material to total reported revenues.

VoyageExpensesPolicyTextBlock

Voyage expenses

Voyage expenses, which primarily include bunkers, port charges, canal tolls, cargo handling operations and brokerage commissions paid by us under voyage charters are expensed as incurred.

CharterhireExpensePolicyTextBlock

Charterhire expense

Charterhire expense is the amount we pay the owner for time chartered-in vessels. The amount is usually for a fixed period of time at charter rates that are generally fixed, but may contain a variable component based on drybulk indices, inflation, interest rates, profit sharing, or current market rates. The vessel’s owner is responsible for crewing and other vessel operating costs. Charterhire expense is recognized ratably over the charterhire period.

Lease, Policy [Policy Text Block]

Operating leases

Costs in respect of operating leases are charged to the consolidated statement of operations on a straight line basis over the lease term

Vessel operating costs

Vessel operating costs

Vessel operating costs, which include crewing, repairs and maintenance, insurance, stores, lube oils, communication expenses, and technical management fees, are expensed as incurred. Expenses for repairs and maintenance tend to fluctuate from period to period because most repairs and maintenance typically occur during periodic drydocking. We expect these expenses to increase as our fleet matures and to the extent that it expands.

Additionally, these costs include technical management fees that we pay to SSM (See Note 15). Pursuant to an agreement, or the Master Agreement, SSM provides us with technical services, and we provide them with the ability to subcontract technical management of our vessels with our approval.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign currencies

The individual financial statements of Scorpio Bulkers Inc. and each of its subsidiaries are presented in the currency of the primary economic environment in which we operate (its functional currency), which in all cases is U.S. dollars. For the purpose of the consolidated financial statements, our results and financial position are also expressed in U.S. dollars.

In preparing the financial statements of Scorpio Bulkers Inc. and each of its subsidiaries, transactions in currencies other than the U.S. dollar are recorded at the rate of exchange prevailing on the dates of the transactions. Any change in exchange rate between the date of recognition and the date of settlement may result in a gain or loss which is recognized in the consolidated statement of operations. At the end of each reporting period, monetary assets and liabilities denominated in other currencies are retranslated into the functional currency at rates ruling at that date. All resultant exchange differences have been recognized in the consolidated statement of operations.

Currency and exchange rate risk

The international shipping industry’s functional currency is the U.S. Dollar. Virtually all of our revenues and most of our operating costs are in U.S. Dollars. We incur certain operating expenses in currencies other than the U.S. Dollar, and the foreign exchange risk associated with these operating expenses is immaterial.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly-liquid investments with original maturities of three months or less, and that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. The carrying value of cash and cash equivalents approximates fair value due to the short-term nature of these instruments.

Inventory, Policy [Policy Text Block]

Inventories

Inventories, which are included in Prepaid expenses and other current assets, consist of lubricating oils and other items including stock provisions, and are stated at the lower of cost and net realizable value. Cost is determined using the first in first out method. Stores and spares are charged to vessel operating costs when purchased.

Assets held for sale policy [Policy Text Block]

Assets held for sale

Assets held for sale include vessels and contracts for the construction of vessels and are classified in accordance ASC 360, Property, Plant, and Equipment. The Company considers such assets to be held for sale when all of the following criteria are met:

• management commits to a plan to sell the property;

• it is unlikely that the disposal plan will be significantly modified or discontinued;

• the property is available for immediate sale in its present condition;

• actions required to complete the sale of the property have been initiated;

• sale of the property is probable and we expect the completed sale will occur within one year; and

• the property is actively being marketed for sale at a price that is reasonable given its current market value.

Upon designation as an asset held for sale, the Company records the carrying value of the asset at the lower of its carrying value or its estimated fair value, less estimated costs to sell, and, if the asset is a vessel, the Company ceases depreciation.

Vessels, net [Policy Text Block]

Vessels, net

Vessels, net is stated at historical cost less accumulated depreciation. Included in vessel costs are acquisition costs directly attributable to the acquisition of a vessel and expenditures made to prepare the vessel for its initial voyage. The Company also capitalizes interest costs for a vessel under construction as a cost which is directly attributable to the acquisition cost of a vessel. Vessels are depreciated on a straight-line basis over their estimated useful lives, determined to be 25 years from the date the vessel is ready for its first voyage. Depreciation is based on cost less the estimated residual value which is the lightweight tonnage of each vessel multiplied by scrap value per ton. The scrap value per ton is estimated taking into consideration the historical four years average scrap market rates at the balance sheet date with changes accounted for in the period of change and in future periods. The Company believes that a 25-year depreciable life for its vessels is consistent with that of other ship owners and with its economic useful life. An increase in the useful life of the vessel or in its residual value would have the effect of decreasing the annual depreciation charge and extending it into later periods. A decrease in the useful life of the vessel or in its residual value would have the effect of increasing the annual depreciation charge. However, when regulations place limitations over the ability of a vessel to trade on a worldwide basis, or when the cost of complying with such regulations is not expected to be recovered, we will adjust the vessel’s useful life to end at the date such regulations preclude such vessel’s further commercial use. The carrying value of the Company’s vessels does not represent the fair market value of such vessels or the amount it could obtain if it were to sell any of its vessels, which could be more or less. Under U.S. GAAP, the Company would not record a loss if the fair market value of a vessel (excluding its charter) is below our carrying value unless and until it determines to sell that vessel or the vessel is impaired as discussed below under “Impairment of long-lived assets.” 

VesselsUnderConstructionPolicyTextBlock

Vessels under construction

Vessels under construction are measured at cost and include costs incurred that are directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. These costs include installment payments made to the shipyards, capitalized interest, professional fees and other costs deemed directly attributable to the construction of the asset. Vessels under construction are not depreciated.

Deferred Drydocking cost [Policy Text Block]

Deferred drydocking costs

The vessels are required to undergo planned drydocks for replacement of certain components, major repairs and maintenance of other components, which cannot be carried out while the vessels are operating, approximately every 30 months or 60 months depending on the nature of work and external requirements. These drydock costs are capitalized and depreciated on a straight-line basis over the estimated period until the next drydock. When the drydock expenditure is incurred prior to the expiry of the period, the remaining balance is expensed. The Company had no drydocking activity during the year ended December 31, 2014 and for the period from March 20, 2013 (date of inception) to December 31, 2013.

We only include in deferred drydocking those direct costs that are incurred as part of the drydocking to meet regulatory requirements, or are expenditures that add economic life to the vessel, increase the vessel’s earnings capacity or improve the vessel’s efficiency. Direct costs include shipyard costs as well as the costs of placing the vessel in the shipyard; cost of travel, lodging and subsistence of personnel sent to the drydocking site to supervise; and the cost of hiring a third party to oversee the drydocking. Expenditures for normal maintenance and repairs, whether incurred as part of the drydocking or not, are expensed as incurred.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Impairment of long-lived assets held for use

The Company follows ASC Subtopic 360-10, Property, Plant and Equipment (“ASC 360-10”), which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. If indicators of impairment are present, the Company performs an analysis of the anticipated undiscounted future net cash flows of the related long-lived assets, including vessels and vessels under construction. If the carrying value of the related asset exceeds the undiscounted cash flows, the carrying value is reduced to its fair value.

Due to continuing poor industry conditions, impairment tests on a vessel by vessel basis were performed as at December 31, 2014. The most significant assumptions made for the determination of expected cash flows are (i) charter rates on expiry of existing charters, which are based on the current fixing applicable to 5-year time charter rates and thereafter, a reversion to the ten years-year historical average for each category of vessel (ii) off-hire days, which are based on actual off-hire statistics for the Company’s fleet (iii) operating costs, based on current levels escalated over time based on long term trends (iv) dry docking frequency, duration and cost, (v) estimated useful life which is assessed as a total of 25 years and (vi) estimated scrap values. In the case of an indication of impairment, the results of a recoverability test would also be sensitive to the discount rate applied.

The assumptions used involve a considerable degree of estimation. Actual conditions may differ significantly from the assumptions and thus actual cash flows may be significantly different to those expected with a material effect on the recoverability of each vessel’s carrying amount.

No impairment charges were recorded on the Company’s long-lived assets held for use as at December 31, 2014 based on the assumptions made, the expected undiscounted future cash flows exceeding the vessels’ carrying amounts

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair value of financial instruments

The estimated fair values of our financial instruments such as amounts due to / due from charterers, accounts payable and long-term debt, approximate their individual carrying amounts due to their short-term maturity or the variable-rate nature of the respective borrowings under the credit facilities.

The fair value of any interest rate swaps is the estimated amount we would receive or have to pay in order to terminate these agreements at the reporting date, taking into account current interest rates and the creditworthiness of the counterparty for assets and our creditworthiness for liabilities.

Provisions, Policy [Policy Text Block]

Provisions

Provisions are recognized when we have a present obligation as a result of a past event, and it is probable that we will be required to settle that obligation. Provisions are measured at our best estimate of the expenditure required to settle the obligation at the balance sheet date, and are discounted to present value where the effect is material.

Deferred financing cost, Policy [Policy Text Block]

Deferred financing costs, net

Deferred financing costs, included in other assets, consist of fees, commissions and legal expenses associated with obtaining loan facilities and amending existing loan facilities. These costs are amortized over the life of the related debt and are included in interest expense. Amortization was $150 for the year ended December 31, 2014. Accumulated amortization was $150 as of December 31, 2014.

Other Assets [Policy Text Block]

Other assets

Other assets consists primarily of deferred financing costs relating to the portions of loan facilities that have not yet been drawn down. As the loan facilities are drawn down, the related portion of costs incurred relating to such facilities will be reclassified to Deferred financing costs and amortized over the life of the related debt.

Earnings Per Share, Policy [Policy Text Block]

Earnings per share

Basic earnings per share is calculated by dividing the net income (loss) attributable to equity holders of the common shares by the weighted average number of common shares outstanding. Diluted earnings per share are calculated by adjusting the net income (loss) attributable to equity holders of the parent and the weighted average number of common shares used for calculating basic per share for the effects of all potentially dilutive shares. Such dilutive common shares are excluded when the effect would be to increase earnings per share or reduce a loss per share.

Restricted Stock, Policy [Policy Text Block]

Restricted stock

We follow Accounting Standards Codification (“ASC”) Subtopic 718-10, Compensation-Stock Compensation (“ASC 718-10”), for restricted stock issued under our equity incentive plans. Stock-based compensation costs from restricted stock are classified as a component of additional paid-in capital. The restricted stock awards granted to our employees and directors contain only service conditions and are classified as equity settled. Accordingly, the fair value of our restricted stock awards is calculated by multiplying the share price on the grant date and the number of restricted stock shares granted that are expected to vest. We believe that the share price at the grant date serves as a proxy for the fair value of services to be provided by the employees and directors under the plan.

Compensation expense related to the awards is recognized ratably over the vesting period, based on our estimate of the number of awards that will eventually vest. The vesting period is the period during which an employee or director is required to provide service in exchange for an award and is updated at each balance sheet date to reflect any revisions in estimates of the number of awards expected to vest as a result of the effect of non-market-based vesting conditions.

Income Tax, Policy [Policy Text Block]

Income tax

Scorpio Bulkers Inc. and its subsidiaries are incorporated in the Republic of the Marshall Islands, and in accordance with the income tax laws of the Marshall Islands, are not subject to Marshall Islands’ income tax. We are also exempt from income tax in other jurisdictions including the United States of America due to tax treaties; therefore, we will not have any tax charges, benefits, or balances.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentration of credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk are amounts due from charterers and from related parties. With respect to balances due from the Scorpio Ultramax Pool and the Scorpio Kamsarmax Pool (see Note 15), the Company, through SCM, limits its credit risk by performing ongoing credit evaluations and, when deemed necessary, requires letters of credit, guarantees or collateral.  The Company earned 71.4% and 20.8% of its revenues from two customers during the year ended December 31, 2014.  Management does not believe significant risk exists in connection with the Company’s concentrations of credit at December 31, 2014.

At December 31, 2014, the Company maintains all of its cash and cash equivalents with five financial institutions.  None of the Company’s cash and cash equivalent balances is covered by insurance in the event of default by these financial institutions.

Interest rate risk [Policy Text Block]

Interest rate risk

The Company is exposed to the impact of interest rate changes primarily through its variable-rate borrowings which consist of borrowings under its secured credit facilities. Significant increases in interest rates could adversely affect our operating margins, results of operations and our ability to service our debt. The Company intends to selectively enter into derivative contracts to hedge its overall exposure to interest rate risk exposure. Entering into swaps and derivatives transactions is inherently risky and presents various possibilities for incurring significant expenses. The derivatives strategies that the Company employs in the future may not be successful or effective, and it could, as a result, incur substantial additional interest costs.

Liquidity Disclosure [Policy Text Block]

Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in raising funds to meet commitments associated with financial instruments.

We manage liquidity risk by maintaining adequate reserves and borrowing facilities and by continuously monitoring forecast and actual cash flows.

Current economic conditions make forecasting difficult, and there is the possibility that our actual trading performance during the coming year may be materially different from expectations. Based on internal forecasts and projections that take into account reasonably possible changes in our trading performance, we believe that we have adequate financial resources to continue in operation and meet our financial commitments (including but not limited to newbuilding installments, debt service obligations and charterhire commitments) for a period of at least twelve months from the date of approval of these consolidated financial statements. Accordingly, we continue to adopt the going concern basis in preparing our financial statements.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent accounting pronouncements

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers”, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. This Update defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, and shall be applied either retrospectively to each period presented or as a cumulative effect adjustment as of the date of adoption. The Company is evaluating the potential impact of this adoption on its consolidated financial statements.

Derivatives, Reporting of Derivative Activity [Policy Text Block]

Derivative financial instruments

Derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each balance sheet date. A derivative with a positive fair value is recognized as a financial asset whereas a derivative with a negative fair value is recognized as a financial liability. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedging relationship. We designate certain derivatives as hedges of highly probable forecast transactions (cash flow hedges) as described further below.

A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months, and it is not expected to be realized or settled within 12 months.

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Commitments and Contingencies (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014
2015	$ 14,779
2016	8,393
2017	6,351
2018	6,278
Total	40,055
Newbuilding Drybulk carriers [Member]
2015	54,951
2016	31,513
2017	9,978
2018	378
Total	96,820
Assets Held-for-sale [Member]
2015	92,906
2016	175,013
2017	27,386
Total	$ 295,305

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Earnings Per Common Share (Details Textual)	9 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2014
Earnings Per Share [Abstract]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	373,046	865,758

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Unaudited Quarterly Results (Tables)

12 Months Ended

Dec. 31, 2014

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information [Table Text Block]

In the opinion of the Company’s management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation have been included on a quarterly basis.

	2014 Quarter Ended												2013 Quarter Ended
	Mar-31			Jun-30			Sep-30			Dec-31			Mar-31		Jun-30			Sep-30			Dec-31
Revenues	$	5,467		$	13,180		$	12,608		$	17,732		$	—	$	—		$	—		$	—
Operating loss	(11,157		)	(15,289		)	(19,069		)	(71,973		)	—		(1		)	(675		)	(4,829		)
Net loss	(10,656		)	(15,002		)	(18,909		)	(71,998		)	—		(1		)	(2,737		)	(3,569		)
Net loss per share Basic (2)	$	(0.08	)	$	(0.11	)	$	(0.14	)	$	(0.48	)	$	—	$	—		$	(0.08	)	$	(0.04	)
Net loss per share Diluted(2)	(0.08		)	(0.11		)	(0.14		)	(0.48		)	—		—			(0.08		)	(0.04		)
Weighted average common shares outstanding- Basic	132,610,911			133,236,911			133,248,016			151,119,957			1,500		1,500			33,453,698			91,023,403
Weighted average common shares outstanding- Diluted	132,910,911			133,236,911			133,248,016			151,119,957			1,500		1,500			33,453,698			91,023,403

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Commitments and Contingencies Commitments and Contingencies (Details 2) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014
2015	$ 14,779
2016	8,393
2017	6,351
2018	6,278
2019	4,254
Thereafter	0
Total	40,055
Newbuilding Drybulk carriers [Member]
2015	1,181,099
2016	633,251
Total	1,814,350
Loan Lending Commitment Arrangement Fees [Member]
2015	7,612
2016	1,330
2017	0
2018	0
2019	0
Thereafter	0
Total	8,942
Interest Expense [Member]
2015	6,548
2016	6,444
2017	6,351
2018	6,278
2019	4,254
Thereafter	0
Total	29,875
Technical management fee [Member]
2015	400
2016	400
2017	0
2018	0
2019	0
Thereafter	0
Total	800
Administrative fee [Member]
2015	219
2016	219
2017	0
2018	0
2019	0
Thereafter	0
Total	$ 438

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Related Party Transactions (Details 1) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Related Party Transaction [Line Items]
Due from Related Parties, Current	$ 42,373	$ 0
Due from Other Related Parties, Noncurrent	5,305	0
Due to related parties	1,231	0
Kamsarmax pool [Member]
Related Party Transaction [Line Items]
Due from Related Parties, Current	8,482	0
Due from Other Related Parties, Noncurrent	3,272	0
Ultramax pool [Member]
Related Party Transaction [Line Items]
Due from Related Parties, Current	2,460	0
Due from Other Related Parties, Noncurrent	2,033	0
Scorpio Tankers [Member]
Related Party Transaction [Line Items]
Due from Related Parties, Current	31,277	0
SUK
Related Party Transaction [Line Items]
Due to related parties	44	0
Scorpio Ship Management SSM
Related Party Transaction [Line Items]
Fixtures and Equipment, Gross	154	0
Due to related parties	1,131	0
Scorpio Services Holding Limited
Related Party Transaction [Line Items]
Due to related parties	$ 56

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Debt (Details 3) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Jun. 27, 2014	Dec. 31, 2013	Jul. 29, 2014	Jul. 30, 2014
Secured credit facility Maturity June 27, 2019 [Member]
Long-term Debt	$ 33,550	$ 33,550	$ 0
Secured credit facility Maturity July 29, 2021 [Member]
Line of Credit Facility, Maximum Borrowing Capacity				330,000
Secured credit facility Maturity the earlier of seven years from drawdown or December 31, 2013 [Member]
Line of Credit Facility, Maximum Borrowing Capacity					67,500
Amount available to be drawn [Member]
Long-term Debt	806,476
Line of Credit Facility, Maximum Borrowing Capacity	408,976
Amount available to be drawn [Member] | Secured credit facility Maturity June 27, 2019 [Member]
Long-term Debt	0
Amount available to be drawn [Member] | Secured credit facility Maturity July 29, 2021 [Member]
Line of Credit Facility, Maximum Borrowing Capacity	330,000
Amount available to be drawn [Member] | Secured credit facility Maturity the earlier of seven years from drawdown or December 31, 2013 [Member]
Line of Credit Facility, Maximum Borrowing Capacity	67,500
Amount outstanding [Member]
Long-term Debt	33,550
Line of Credit Facility, Maximum Borrowing Capacity	0
Amount outstanding [Member] | Secured credit facility Maturity June 27, 2019 [Member]
Long-term Debt	$ 33,550

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Vessels under construction (Details Textual) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014 DWT	Dec. 31, 2013	Mar. 20, 2013
Vessels under construction	$ 866,844	$ 371,692	$ 0
Contracts to acquire New Vessels	71
DWT	7,399,400
Aggregate Purchase Price of New Vessels	2,662,876
Purchase price paid for New Vessels	$ 848,526
Kamsarmax Vessels [Member]
Contracts to acquire New Vessels	20
DWT	1,643,600
Kamsarmax Vessels [Member] | Minimum [Member]
DWT	81,600
Kamsarmax Vessels [Member] | Maximum [Member]
DWT	84,000
Ultramax Vessels [Member]
Contracts to acquire New Vessels	29
DWT	1,795,800
Ultramax Vessels [Member] | Minimum [Member]
DWT	60,200
Ultramax Vessels [Member] | Maximum [Member]
DWT	64,000
Capesize [Member]
Contracts to acquire New Vessels	22
DWT	3,960,000
Hull HN1059 -TBN SBI Monterrey [Member] | Daehan Shipbuilding Co., Ltd. [Member] | Q4-15 [Member] | Capesize [Member]
DWT	180,000

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Cash and cash equivalents

12 Months Ended

Dec. 31, 2014

Cash and Cash Equivalents [Abstract]

Cash and cash equivalents

Cash and cash equivalents

Included in cash and cash equivalents as of December 31, 2014 is $75,029 of short-term deposits with original maturities of less than three months.

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Debt (Details Textual) (USD $)	12 Months Ended		0 Months Ended		5 Months Ended	0 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Jul. 29, 2014	Jul. 30, 2014	Nov. 30, 2014	Dec. 30, 2014	Oct. 16, 2014	Sep. 22, 2014	Jun. 27, 2014	Sep. 30, 2014
Senior Notes issued	$ 73,625,000	$ 0					$ 8,625,000
Number of credit agreements	4
2015	3,300,000
2016	3,300,000
2017	2,260,000
2018	2,260,000
2019	96,055,000
Vessels, net	66,633,000	0
Minimum Cumulative positive net income required for each fiscal quarter (as a percentage) for Net worth		25.00%
Percentage of the value of any new equity issues		50.00%
Minimum liquidity	50,000,000
Minimum liquidity per owned vessels	850,000
Amount available to be drawn [Member]
Long-term Debt	806,476,000
Line of Credit Facility, Maximum Borrowing Capacity	408,976,000
Senior Notes [Member]
Maximum net borrowings allowed as a percentage to total assets	70.00%
Minimum Net Worth Required for Compliance	500,000,000
Minimum [Member]
Ratio of Indebtedness to Net Capital	0.60
Fair value of the collateral of each credit facility	130.00%
Maximum [Member]
Ratio of Indebtedness to Net Capital	1.00
Fair value of the collateral of each credit facility	140.00%
From the quarter ending September 30, 2015 until the quarter ending December 31, 2016 [Member]
Ratio of EBIDTA to net interest expense	100.00%
Secured Debt [Member]
Consolidated Net worth required	500,000,000
Long-term Debt [Member]
Senior Notes issued								65,000,000
Secured credit facility Maturity July 29, 2021 [Member]
Number of tranches	22
Line of Credit Facility, Maximum Borrowing Capacity			330,000,000
Commitment Fee Percentage			1.17%
Quarterly Installment			313,000
Secured credit facility Maturity July 29, 2021 [Member] | Amount available to be drawn [Member]
Line of Credit Facility, Maximum Borrowing Capacity	330,000,000
Secured credit facility Maturity July 29, 2021 [Member] | Ultramax and Kamsarmax [Member]
Line of Credit Facility, Maximum Borrowing Capacity			15,000,000
Secured credit facility Maturity July 29, 2021 [Member] | Ultramax
Number of vessels			16
Secured credit facility Maturity July 29, 2021 [Member] | Kamsarmax
Number of vessels			6
Secured credit facility Maturity the earlier of seven years from drawdown or December 31, 2013 [Member]
Line of Credit Facility, Maximum Borrowing Capacity				67,500,000
Commitment Fee Percentage				1.25%
Debt Instrument, Maturity Date				7 years
Secured credit facility Maturity the earlier of seven years from drawdown or December 31, 2013 [Member] | Amount available to be drawn [Member]
Line of Credit Facility, Maximum Borrowing Capacity	67,500,000
Secured credit facility Maturity the earlier of seven years from drawdown or December 31, 2013 [Member] | Ultramax
Number of vessels				2
Line of Credit Facility, Maximum Borrowing Capacity				16,350,000
Number of installment				28
Quarterly Installment	292,000
Ballon installment	8,174,000
Secured credit facility Maturity the earlier of seven years from drawdown or December 31, 2013 [Member] | Kamsarmax
Number of vessels				2
Line of Credit Facility, Maximum Borrowing Capacity				17,400,000
Number of installment				28
Quarterly Installment	311,000
Ballon installment	8,692,000
Secured credit facility Maturity June 27, 2019 [Member]
Long-term Debt	33,550,000	0							33,550,000
Secured credit facility Maturity June 27, 2019 [Member] | Amount available to be drawn [Member]
Long-term Debt	0
Secured credit facility Maturity June 27, 2019 [Member] | First eight installments [Member]
Quarterly Installment	413,000
Secured credit facility Maturity June 27, 2019 [Member] | Secured Debt [Member]
Long-term Debt	33,550,000								19,800,000
Remaining loan amount no longer available to be drawn down	6,050,000
2015	3,300,000
2016	3,300,000
2017	2,260,000
2018	2,260,000
2019	22,430,000
Number of tranches	2
Line of Credit Facility, Maximum Borrowing Capacity									39,600,000
Commitment Fee Percentage					1.17%
Quarterly Installment	283,000
Secured credit facility Maturity June 27, 2019 [Member] | Secured Debt [Member] | Kamsarmax
Number of vessels	2									2
Secured credit facility Maturity December 30, 2020 [Member] [Member]
Number of vessels						20
Line of Credit Facility, Maximum Borrowing Capacity						408,976,000
Debt Instrument, Maturity Date	6 years
Secured credit facility Maturity December 30, 2020 [Member] [Member] | Ultramax
Number of vessels						6
Secured credit facility Maturity December 30, 2020 [Member] [Member] | Kamsarmax
Number of vessels						9
Secured credit facility Maturity December 30, 2020 [Member] [Member] | Capesize [Member]
Number of vessels						5
Senior Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage								7.50%
Repurchase price of Notes (as a percentage)	101.00%
Debt Instrument, Redemption Price, Percentage	100.00%
Senior Notes, Denomination								25.00
Senior Notes [Member] | Secured Debt [Member]
2015	0
2016	0
2017	0
2018	0
2019	$ 73,625,000
For the quarter March 31, 2017 until and including the quarter December 31, 2017 [Member]
Ratio of EBIDTA to net interest expense	200.00%
For periods after December 31, 2017 [Member]
Ratio of EBIDTA to net interest expense	250.00%
Scorpio Tankers [Member]
Amount of LR Tankers Sold to Related Party	4
London Interbank Offered Rate (LIBOR) [Member] | Secured credit facility Maturity July 29, 2021 [Member]
Debt Instrument, Basis Spread on Variable Rate			2.925%
London Interbank Offered Rate (LIBOR) [Member] | Secured credit facility Maturity the earlier of seven years from drawdown or December 31, 2013 [Member]
Debt Instrument, Basis Spread on Variable Rate				2.95%		3.00%
London Interbank Offered Rate (LIBOR) [Member] | Secured credit facility Maturity June 27, 2019 [Member] | Secured Debt [Member]
Debt Instrument, Basis Spread on Variable Rate	2.925%

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Vessels (Details)	12 Months Ended
	Dec. 31, 2014 DWT
DWT	7,399,400
Kamsarmax [Member] | Year Built 2014 [Member]
DWT	164,000
SBI Cakewalk [Member] | Kamsarmax [Member] | Year Built 2014 [Member]
DWT	82,000
SBI Charleston [Member] | Kamsarmax [Member] | Year Built 2014 [Member]
DWT	82,000

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Assets Held for Sale (Tables)

12 Months Ended

Dec. 31, 2014

Assets Held for Sale [Abstract]

Assets held for sale [Table Text Block]

A summary of assets held for sale is as follows:

	Vessel Name	Expected Delivery (1)	DWT	Shipyard
1	Hull S3120 - TBN SBI Parejo	Q3-16	115,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
2	Hull S3121 - TBN SBI Tuscamina	Q3-16	115,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
3	Hull H5023 - TBN SBI Panatela	Q4-16	112,000	Daewoo Mangalia Heavy Industries S.A.
4	Hull H5024 - TBN SBI Robusto	Q1-17	112,000	Daewoo Mangalia Heavy Industries S.A.
5	Hull H.5003 - TBN SBI Macanudo	Q1-16	115,000	Daehan Shipbuilding Co., Ltd.
6	Hull H.5004 - TBN SBI Cuaba	Q2-16	115,000	Daehan Shipbuilding Co., Ltd.
	Total LR2 HFS NB DWT		684,000
	Kamsarmax Held for Sale
1	Hull SS164 - TBN SBI Salsa	Q3-15	81,600	Tsuneishi Group (Zhoushan) Shipbuilding Inc.
	Total Kamsarmax NB DWT		81,600
	Total HFS DWT		765,600

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Vessels under construction (Tables)

12 Months Ended

Dec. 31, 2014

Vessels under construction [Abstract]

Vessels under construction rollforward [Table Text Block]

A rollforward of activity within vessels under construction is as follows:

Balance, March 20, 2013 (date of inception)	$	—
Installment payments and other capitalized expenses	371,692
Balance, December 31, 2013	371,692
Installment payments and other	657,974
Capitalized interest	1,600
Transferred to vessels	(67,319		)
Transferred to assets held for sale	(97,103		)
Balance December 31, 2014	$	866,844

Schedule of Vessels under Construction

Capesize Vessels
	Vessel Name	Expected Delivery (1)	DWT	Shipyard
1	Hull H1309 - TBN SBI Puro	Q1-15	180,000	Shanghai Waigaoqiao Shipbuilding Co., Ltd.
2	Hull H1310 - TBN SBI Valrico	Q3-15	180,000	Shanghai Waigaoqiao Shipbuilding Co., Ltd.
3	Hull H1311 - TBN SBI Maduro	Q4-15	180,000	Shanghai Waigaoqiao Shipbuilding Co., Ltd.
4	Hull H1364 - TBN SBI Belicoso	Q3-15	180,000	Shanghai Waigaoqiao Shipbuilding Co., Ltd.
5	Hull H1365 - TBN SBI Corona	Q1-16	180,000	Shanghai Waigaoqiao Shipbuilding Co., Ltd.
6	Hull H1366 - TBN SBI Diadema	Q1-16	180,000	Shanghai Waigaoqiao Shipbuilding Co., Ltd.
7	Hull H1367 - TBN SBI Estupendo	Q2-16	180,000	Shanghai Waigaoqiao Shipbuilding Co., Ltd.
8	Hull S1205 - TBN SBI Camacho	Q2-15	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
9	Hull S1206 - TBN SBI Montesino	Q2-15	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
10	Hull S1211 - TBN SBI Magnum	Q2-15	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
11	Hull S1212 - TBN SBI Montecristo	Q3-15	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
12	Hull S1213 - TBN SBI Aroma	Q3-15	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
13	Hull S1214 - TBN SBI Cohiba	Q4-15	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
14	Hull S1215 - TBN SBI Habano	Q1-16	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
15	Hull S1216 - TBN SBI Lonsdale *	Q4-15	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
16	Hull S1217 - TBN SBI Partagas *	Q1-16	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
17	Hull S1219 - TBN SBI Toro *	Q2-16	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
18	Hull H1059 - TBN SBI Churchill	Q4-15	180,000	Daewoo Mangalia Heavy Industries S.A.
19	Hull H1060 - TBN SBI Perfecto	Q1-16	180,000	Daewoo Mangalia Heavy Industries S.A.
20	Hull H1061 - TBN SBI Presidente	Q2-16	180,000	Daewoo Mangalia Heavy Industries S.A.
21	Hull HN1058 - TBN SBI Behike	Q4-15	180,000	Daehan Shipbuilding Co., Ltd.
22	Hull HN1059 - TBN SBI Monterrey	Q4-15	180,000	Daehan Shipbuilding Co., Ltd.
	Capesize NB DWT		3,960,000

* Subsequently converted to LR1 product tanker contracts. See Note18.

Kamsarmax Vessels
	Vessel Name	Expected Delivery (1)	DWT	Shipyard
1	Hull S1680 - TBN SBI Samba	Q1-15	84,000	Imabari Shipbuilding Co., Ltd.
2	Hull S1681 - TBN SBI Rumba	Q3-15	84,000	Imabari Shipbuilding Co., Ltd.
3	Hull 1090 - TBN SBI Electra	Q3-15	82,000	Jiangsu Yangzijiang Shipbuilding Co., Ltd.
4	Hull 1091 - TBN SBI Flamenco	Q3-15	82,000	Jiangsu Yangzijiang Shipbuilding Co., Ltd.
5	Hull 1092 - TBN SBI Rock	Q4-15	82,000	Jiangsu Yangzijiang Shipbuilding Co., Ltd.
6	Hull 1093 - TBN SBI Twist	Q1-16	82,000	Jiangsu Yangzijiang Shipbuilding Co., Ltd.
7	Hull SS179 - TBN SBI Merengue	Q1-16	81,600	Tsuneishi Group (Zhoushan) Shipbuilding Inc.
8	Hull S1228 - TBN SBI Capoeira	Q2-15	82,000	Hudong-Zhonghua (Group) Co., Ltd.
9	Hull S1722A - TBN SBI Conga	Q2-15	82,000	Hudong-Zhonghua (Group) Co., Ltd.
10	Hull S1723A - TBN SBI Bolero	Q3-15	82,000	Hudong-Zhonghua (Group) Co., Ltd.
11	Hull S1229 - TBN SBI Carioca	Q3-15	82,000	Hudong-Zhonghua (Group) Co., Ltd.
12	Hull S1724A - TBN SBI Sousta	Q3-15	82,000	Hudong-Zhonghua (Group) Co., Ltd.
13	Hull S1725A - TBN SBI Reggae	Q4-15	82,000	Hudong-Zhonghua (Group) Co., Ltd.
14	Hull S1726A - TBN SBI Zumba	Q1-16	82,000	Hudong-Zhonghua (Group) Co., Ltd.
15	Hull S1231 - TBN SBI Macarena	Q1-16	82,000	Hudong-Zhonghua (Group) Co., Ltd.
16	Hull S1735A - TBN SBI Parapara	Q2-16	82,000	Hudong-Zhonghua (Group) Co., Ltd.
17	Hull S1736A - TBN SBI Mazurka	Q2-16	82,000	Hudong-Zhonghua (Group) Co., Ltd.
18	Hull S1230 - TBN SBI Lambada	Q3-15	82,000	Hudong-Zhonghua (Group) Co., Ltd.
19	Hull S1232 - TBN SBI Swing	Q2-16	82,000	Hudong-Zhonghua (Group) Co., Ltd.
20	Hull S1233 - TBN SBI Jive	Q3-16	82,000	Hudong-Zhonghua (Group) Co., Ltd.
	Kamsarmax NB DWT		1,643,600

Ultramax Vessels
	Vessel Name	Expected Delivery (1)	DWT	Shipyard
1	Hull 1907 - TBN SBI Hera	Q2-16	60,200	Mitsui Engineering & Shipbuilding Co., Ltd.
2	Hull 1906 - TBN SBI Zeus	Q2-16	60,200	Mitsui Engineering & Shipbuilding Co., Ltd.
3	Hull 1911 - TBN SBI Poseidon	Q2-16	60,200	Mitsui Engineering & Shipbuilding Co., Ltd.
4	Hull 1912 - TBN SBI Apollo	Q2-16	60,200	Mitsui Engineering & Shipbuilding Co., Ltd.
5	Hull S870 - TBN SBI Echo	Q3-15	61,000	Imabari Shipbuilding Co., Ltd.
6	Hull S871 - TBN SBI Tango	Q3-15	61,000	Imabari Shipbuilding Co., Ltd.
7	Hull S-A098 - TBN SBI Achilles	Q4-15	61,000	Imabari Shipbuilding Co., Ltd.
8	Hull S-A089 - TBN SBI Cronos	Q4-15	61,000	Imabari Shipbuilding Co., Ltd.
9	Hull S-A090 - TBN SBI Hermes	Q1-16	61,000	Imabari Shipbuilding Co., Ltd.
10	Hull NE180 - TBN SBI Bravo	Q1-15	61,000	Nantong COSCO KHI Ship Engineering Co. Ltd.
11	Hull NE181 - TBN SBI Antares	Q1-15	61,000	Nantong COSCO KHI Ship Engineering Co. Ltd.
12	Hull NE182 - TBN SBI Maia	Q3-15	61,000	Nantong COSCO KHI Ship Engineering Co. Ltd.
13	Hull NE183 - TBN SBI Hydra	Q3-15	61,000	Nantong COSCO KHI Ship Engineering Co. Ltd.
14	Hull NE194 - TBN SBI Hyperion	Q2-16	61,000	Nantong COSCO KHI Ship Engineering Co. Ltd.
15	Hull NE195 - TBN SBI Tethys	Q2-16	61,000	Nantong COSCO KHI Ship Engineering Co. Ltd.
16	Hull DE018 - TBN SBI Leo	Q1-15	61,000	Dalian COSCO KHI Ship Engineering Co. Ltd.
17	Hull DE019 - TBN SBI Lyra	Q2-15	61,000	Dalian COSCO KHI Ship Engineering Co. Ltd.
18	Hull DE020 - TBN SBI Subaru	Q2-15	61,000	Dalian COSCO KHI Ship Engineering Co. Ltd.
19	Hull DE021 - TBN SBI Ursa	Q3-15	61,000	Dalian COSCO KHI Ship Engineering Co. Ltd.
20	Hull CX0610 - TBN SBI Athena	Q1-15	64,000	Chengxi Shipyard Co. Ltd.
21	Hull CX0651 - TBN SBI Pegasus	Q3-15	64,000	Chengxi Shipyard Co. Ltd.
22	Hull CX0652 - TBN SBI Orion	Q4-15	64,000	Chengxi Shipyard Co. Ltd.
23	Hull CX0612 - TBN SBI Thalia	Q4-15	64,000	Chengxi Shipyard Co. Ltd.
24	Hull CX0653 - TBN SBI Hercules	Q4-15	64,000	Chengxi Shipyard Co. Ltd.
25	Hull CX0627 - TBN SBI Perseus	Q1-16	64,000	Chengxi Shipyard Co. Ltd.
26	Hull CX0654 - TBN SBI Kratos	Q1-16	64,000	Chengxi Shipyard Co. Ltd.
27	Hull CX0655 - TBN SBI Samson	Q2-16	64,000	Chengxi Shipyard Co. Ltd.
28	Hull CX0613 - TBN SBI Phoebe	Q3-16	64,000	Chengxi Shipyard Co. Ltd.
29	Hull CX0656 - TBN SBI Phoenix	Q3-16	64,000	Chengxi Shipyard Co. Ltd.
	Ultramax NB DWT		1,795,800
	Total Newbuild DWT		7,399,400

(1) Expected delivery date relates to quarter during which each vessel is currently expected to be delivered from the shipyard.

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Equity Incentive Plan (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Mar. 20, 2013
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding and nonvested, December 31, 2014	6,980,390	4,862,020	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Granted	$ 9.31	$ 9.66
Outstanding and nonvested, December 31, 2014	$ 9.56	$ 9.66	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	(30,000)	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value	$ 9.59	$ 0.00
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period	0	0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price	$ 0	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	2,148,370	4,862,020

XML

Vessels (Details Textual) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2014
Property, Plant and Equipment [Abstract]
Vessels, net	$ 0	$ 66,633
Vessel depreciation	$ 0	$ 686

XML

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Contractual obligation, Fiscal Maturity Schedule 2 [Table Text Block]

The following table sets forth the Company’s total contractual obligations at December 31, 2014 that are not shown elsewhere in the notes to consolidated financial statements:

	Year ending December 31,
	2015		2016		2017		2018		2019		Thereafter		Total
Interest payments (1)	$	6,548	$	6,444	$	6,351	$	6,278	$	4,254	$	—	$	29,875
Commitment fees (2)	7,612		1,330		—		—		—		—		8,942
Commercial management fee (3)	219		219		—		—		—		—		438
Technical management fee (4)	400		400		—		—		—		—		800
	$	14,779	$	8,393	$	6,351	$	6,278	$	4,254	—		$	40,055

(1) Represents the interest payments on outstanding balances of Senior Notes at 7.5% per annum and bank loans, for which the LIBOR rate in effect as of December 31, 2014 of 0.2356% plus a margin of 2.925%.

(2) Represents the commitment fees we will pay under our three credit facilities at December 31, 2014 on which we are incurring commitment fees (as defined in Note 12, the $67.5 Million Senior Secured Credit Facility, the $330.0 Million Senior Secured Credit Facility and the $409.0 Million Senior Secured Credit Facility). Such fees are calculated on the undrawn portion of these credit facilities and assume that the committed amount of each vessel will be drawn when the vessel collateralizing the credit facility is delivered from the shipyards.

(3) Represents the commercial management fee we pay to SCM of $300 per day for each vessel that we own based on the two vessels we owned as of December 31, 2014.

(4) Represents the annual technical management fee we pay to SSM of $200,000 per vessel that we own based on the two vessels we owned as of December 31, 2014.

Schedule of Time-Charter in of Dry Bulk Vessels

Time chartered-in vessels

The Company has agreed to time charter-in 20 drybulk vessels. The terms of the time charter-in contracts are summarized as follows:

Vessel Type	Year Built	DWT	Where Built	Daily Base Rate	Earliest Expiry
Post-Panamax	2012	98,700	China	$13,000	15-Oct-16 (1)
Post-Panamax	2009	93,000	China	See Note (2)	09-May-15 (2)
Post-Panamax	2011	93,000	China	$9,500	11-Aug-15 (3)
Kamsarmax	2014	82,500	South Korea	$12,000	23-Jul-15 (4)
Kamsarmax	2009	82,500	Japan	$14,500	28-Jan-15 (5)
Kamsarmax	2012	82,000	South Korea	$15,500	23-Jul-17 (6)
Kamsarmax	2011	81,900	South Korea	$12,750	04-Mar-15 (7)
Kamsarmax	2011	81,500	South Korea	$15,000	15-Jan-16 (8)
Kamsarmax	2012	81,000	South Korea	$15,000	06-Mar-15 (9)
Kamsarmax	2012	79,500	China	$14,000	07-Feb-15 (10)
Panamax	2004	77,500	China	$14,000	03-Jan-17 (11)
Panamax	2014	77,000	Japan	$16,000	10-Jan-15 (12)
Panamax	2014	76,000	China	See Note (13)	19-Jun-15 (13)
Panamax	2007	75,500	South Korea	$13,750	17-Feb-15 (14)
Ultramax	2010	61,000	Japan	$14,200	01-Apr-17 (15)
Supramax	2010	58,000	China	$14,250	12-Dec-15 (16)
Supramax	2011	58,000	China	$13,750	13-Jan-15 (17)
Supramax	2008	58,000	China	$12,250	13-Jun-16 (18)
Supramax	2015	55,000	Japan	$14,000	27-Jan-18 (19)
Handymax	2002	48,500	Japan	$12,000	31-Jan-17 (20)
Aggregate TC DWT		1,500,100

(1) This vessel has been time chartered-in for 21 to 25 months, with such term to be determined at the Company’s option at $13,000 per day. The Company has the option to extend this time charter for one year at $14,000 per day. The vessel was delivered February 22, 2015.

(2) This vessel has been time chartered-in for ten to 14 months at the Company's option at a rate of 90% of the Baltic Panamax 4TC Index. The Company has the option to extend this time charter for an additional ten to 14 months at the same rate of hire. The vessel was delivered on July 9, 2014.

(3) This vessel has been time chartered-in for 11 to 13 months, with such term to be determined at the Company’s option at $9,500 per day. The Company has the option to extend this time charter for one year at $11,500 per day. The vessel was delivered on September 11, 2014.

(4) This vessel has been time chartered-in for 11 to 14 months, with such term to be determined at the Company’s option at $12,000 per day. The Company has the option to extend this time charter for one year. The vessel was delivered on August 22, 2014.

(5) This vessel has been time chartered-in for 11 to 13 months, with such term to be determined at the Company’s option at $14,500 per day. The Company has the option to extend this time charter for one year at $15,500 per day. The vessel was delivered on March 8, 2014 and was returned to its owner on January 28, 2015.

(6) This vessel has been time chartered-in for 39 to 44 months, with such term to be determined at the Company’s option at $15,500 per day. The Company has the option to extend this time charter for one year at $16,300 per day. The vessel was delivered on April 23, 2014.

(7) This vessel has been time chartered-in for 11 to 13 months, with such term to be determined at the Company’s option at $12,750 per day. The Company has the option to extend this time charter for one year at $13,750 per day. The vessel was delivered on May 3, 2014 and was returned to its owner on March 4, 2015.

(8) This vessel has been time chartered-in for 23 to 28 months, with such term to be determined at the Company’s option at $15,000 per day. The Company has the option to extend the charter for an additional 11 to 13 months at $16,000 per day. The vessel was delivered on February 15, 2014.

(9) This vessel has been time chartered-in for 12 to 14 months, with such term to be determined at the Company’s option at $15,000 per day. The vessel was delivered on February 10, 2014 and was returned to its owner on March 6, 2015.

(10) This vessel has been time chartered-in for 11 to 14 months, with such term to be determined at the Company’s option at $14,000 per day. The Company has the option to extend the charter for an additional 11 to 14 months at $14,750 per day. The vessel was delivered on February 23, 2014 and was returned to its owner on February 7, 2015.

(11) This vessel has been time chartered-in for 32 to 38 months, at the Company’s option at $14,000 per day. The vessel was delivered on May 3, 2014.

(12) This vessel has been time chartered-in for 12 to 13 months, with such term to be determined at the Company’s option at $16,000 per day. The vessel was delivered on March 4, 2014 and was returned to its owner on January 10, 2015, for which the Company incurred a fee of $375 for the early redelivery of this vessel.

(13) This vessel has been time chartered-in for ten to 13 months, with at the Company’s option at $5,000 per day for the first 40 days and $10,000 per day thereafter. The Company has the option to extend the charter for an additional year. The vessel was delivered on August 10, 2014.

(14) This vessel has been time chartered-in for 11 to 13 months, with such term to be determined at the Company’s option at $13,750 per day. The Company has the option to extend the charter for an additional year at $14,750 per day. This vessel was delivered on March 14, 2014 and was returned to its owner on February 17, 2015.

(15) This vessel has been time chartered-in for three years at $14,200 per day. The Company has options to extend the charter for up to three consecutive one year periods at $15,200 per day, $16,200 per day and $17,200 per day, respectively. The vessel was delivered on April 13, 2014.

(16) This vessel has been time chartered-in for 20 to 24 months, with such term to be determined at the Company’s option at $14,250 per day. The Company has the option to extend the charter for an additional ten to 12 months at $14,850 per day. The vessel was delivered on April 12, 2014.

(17) This vessel has been time chartered-in for ten to 13 months, with such term to be determined at the Company’s option at $13,750 per day. The vessel was delivered on March 18, 2014 and was returned to its owner on January 13, 2015.

(18) This vessel has been time chartered-in for 21 to 25 months, with such term to be determined at the Company’s option at $12,250 per day. The Company has the option to extend this time charter for one year at $13,000 per day. The vessel was delivered on September 13, 2014.

(19) This vessel has been time chartered-in for three years at $14,000 per day. The Company has options to extend the charter for up to two consecutive one year periods at $15,000 per day and $16,000 per day, respectively. The vessel was delivered January 27, 2015.

(20) This vessel has been time chartered-in for 34 to 37 months, with such term to be determined at the Company’s option at $12,000 per day. The Company has options to extend the charter for up to three consecutive one year periods at $12,750 per day, $13,600 per day and $14,800 per day, respectively. The vessel was delivered on March 31, 2014.

Contractual Obligation, Fiscal Year Maturity Schedule [Table Text Block]

As of December 31, 2014, the Company’s estimated commitments through the expected delivery dates of the 71 vessels under construction aggregate approximately $1,814,350, which will be payable as follows:

2015	$	1,181,099
2016	633,251
	$	1,814,350

As of December 31, 2014, the Company’s estimated commitments for the seven vessels under construction classified as assets held for sale through the expected delivery dates aggregate approximately $295,305, which will be payable as follows:

2015	$	92,906
2016	175,013
2017	27,386
	$	295,305

As of December 31, 2014, we had a cash balance of $272,673 to fund these future newbuilding commitments; however, a significant portion of our remaining commitments are currently unfunded. If we are not able to borrow additional funds, raise other capital or utilize available cash on hand, we may not be able to acquire these newbuilding vessels, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. 

During the year ended December 31, 2014, the Company incurred charterhire expense of $73,214. As of December 31, 2014, the Company had time chartered-in 20 drybulk vessels. The future estimated minimum charterhire payments for the 19 vessels on fixed dollar amount time charters, excluding the vessel time chartered-in at a rate based on an index and excluding optional periods, are as follows:

2015	$	54,951
2016	31,513
2017	9,978
2018	378
	$	96,820

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Accounts Payable and Accrued Liablilities (Tables)

12 Months Ended

Dec. 31, 2014

Payables and Accruals [Abstract]

Schedule of Accounts Payable and Accrued Liabilities [Table Text Block]

Accounts payable and accrued expenses consist of the following:

	December 31,
	2014	2013
Accounts payable	7,934	591
Accrued operating	6,111	41
Accrued administrative	1,766	840
	15,811	1,472

XML

Cash Flow Information

12 Months Ended

Dec. 31, 2014

Notes to Financial Statements

Cash Flow, Supplemental Disclosures [Text Block]

Cash Flow Information

For the year ended December 31, 2014, the Company had non-cash investing activities not included in the consolidated statement of cash flows of $7,568 relating to costs associated with vessels and vessels under construction that had not been paid as of December 31, 2014.

For the year ended December 31, 2014, the Company had non-cash financing activities not included in the statement of cash flows of $532 relating to deferred financing costs that had not been paid as of December 31, 2014 and $357 relating to costs of issuing common stock that have not been paid as of December 31, 2014. For the period from March 20, 2013 (date of inception) to December 31, 2013, the Company had non-cash financing activities not included in the statement of cash flows of $665 relating to costs of issuing common stock that have not been paid as of December 31, 2013.

For the year ended December 31, 2014, the Company transferred $67,319 from vessels under construction to vessels at the time of delivery from the shipyard.

For the year ended December 31, 2014, the Company transferred $97,103 from vessels under construction to assets held for sale (see Note 7).

For the year ended December 31, 2014, the Company paid interest of $1,273 and capitalized $1,600 of interest, which is included in consolidated statement of cash flows as investing activities.

XML

Equity Incentive Plan (Tables)

12 Months Ended

Dec. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Nonvested Restricted Stock Shares Activity [Table Text Block]

A summary of activity for restricted stock awards during the year ended December 31, 2014 and for the period from March 20, 2013 (date of inception) to December 31, 2013 is a follows:

	Number of Shares		Weighted Average Grant Date Fair Value
Outstanding and nonvested, March 20, 2013	—		$	—
Granted	4,862,020		9.66
Vested	—		—
Forfeited	—		—
Outstanding and nonvested, December 31, 2013	4,862,020		9.66
Granted	2,148,370		9.31
Vested	(30,000	)	9.59
Forfeited	—		—
Outstanding and nonvested, December 31, 2014	6,980,390		$	9.56

Schedule of Unrecognized Compensation Cost, Nonvested Awards [Table Text Block]

The following table summarizes the amortization, which will be included in general and administrative expenses, of all of the Company’s restricted stock grants as of December 31, 2014: 

Restricted Stock Grant Date:
	2015		2016		2017		2018		Total
September 30, 2013	$	8,456	$	4,330	$	1,506	$	—	$	14,292
November 6, 2013	4,463		2,367		940		—		7,770
December 18, 2013	2,335		1,221		474		—		4,030
February 21, 2014	6,976		4,172		1,854		220		13,222
May 20, 2014	235		140		62		7		444
Total by year	$	22,465	$	12,230	$	4,836	$	227	$	39,758

XML

Cash and cash equivalents (Details Textual) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014
Cash And Cash Equivalents Details Narrative
Short-term Investments	$ 75,029
Other short-term highly liquid investments with original maturities of three months or less	0 years 3 months

XML

Commitments and Contingencies (Details Textual) (USD $)	9 Months Ended	12 Months Ended	0 Months Ended
	Dec. 31, 2013	Dec. 31, 2014	Jul. 29, 2014	Mar. 20, 2013	Sep. 22, 2014	Jul. 30, 2014	Dec. 30, 2014
Number of vessels held for sale		7
Contracts to acquire New Vessels		71
Vessels time charter-in		20
Number of Time charters in - fixed dollar		19
Cash and cash equivalents	$ 733,896,000	$ 272,673,000		$ 0
Charterhire expense	0	73,214,000
Kamsarmax Vessels [Member]
Contracts to acquire New Vessels		20
Ultramax Vessels [Member]
Contracts to acquire New Vessels		29
Senior Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage					7.50%
London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Description of Variable Rate Basis			0.002356
Secured credit facility Maturity July 29, 2021 [Member]
Line of Credit Facility, Maximum Borrowing Capacity			330,000,000
Secured credit facility Maturity the earlier of seven years from drawdown or December 31, 2013 [Member]
Line of Credit Facility, Maximum Borrowing Capacity						67,500,000
Secured credit facility Maturity December 30, 2020 [Member] [Member]
Line of Credit Facility, Maximum Borrowing Capacity							408,976,000
Scorpio commercial management (SCM)
Commercial management fee payable to SCM (per vessel per day)		300
Scorpio Ship Management SSM
Annual Fee per vessel to provide technical management service		200,000
31-Jan-17 [Member] | 2002 [Member] | Handymax [Member] | JAPAN
Daily base rate extended period year2		13,600
Daily base rate extended period Year 3		14,800
Daily Base Rate		12,000
Daily base rate extended period Year 1		12,750
27-Jan-18 [Member] | 2015 [Member] | Supramax [Member] | JAPAN
Vessel Charter in period (in months)		3 years 0 months
Daily base rate extended period year2		16,000
Daily Base Rate		14,000
Daily base rate extended period Year 1		15,000
15-10-2016 [Member] | 2012 [Member] | Post-Panamax [Member] | CHINA
Daily Base Rate		13,000
Daily Base Rate during extended period		14,000
9-May-15 [Member] | 2009 [Member] | Post-Panamax [Member] | CHINA
Chartered-in rate as a percentage of Baltic Panamax 4TC Index (as a percentage)		90.00%
11-Aug-15 [Member] | 2011 [Member] | Post-Panamax [Member] | CHINA
Daily Base Rate		9,500
Daily Base Rate during extended period		11,500
23-Jul-15 [Member] | 2014 [Member] | Kamsarmax Vessels [Member] | South Korea
Daily Base Rate		12,000
28-Jan-15 [Member] | 2009 [Member] | Kamsarmax Vessels [Member] | JAPAN
Daily Base Rate		14,500
Daily Base Rate during extended period		15,500
23-Jul-17 [Member] | 2012 [Member] | Kamsarmax Vessels [Member] | South Korea
Daily Base Rate		15,500
Daily Base Rate during extended period		16,300
4-Mar-15 [Member] | 2011 [Member] | Kamsarmax Vessels [Member] | South Korea
Daily Base Rate		12,750
Daily Base Rate during extended period		13,750
15-Jan-16 [Member] | 2011 [Member] | Kamsarmax Vessels [Member] | South Korea
Daily Base Rate		15,000
Daily Base Rate during extended period		16,000
06-Mar-15 [Member] | 2012 [Member] | Kamsarmax Vessels [Member] | South Korea
Daily Base Rate		15,000
07-Feb-15 [Member] | 2012 [Member] | Kamsarmax Vessels [Member] | CHINA
Daily Base Rate		14,000
Daily Base Rate during extended period		14,750
3-Jan-17 [Member] | 2004 [Member] | Panamax [Member] | CHINA
Daily Base Rate		14,000
10-Jan-15 [Member] | 2014 [Member] | Panamax [Member] | JAPAN
Daily Base Rate		16,000
17-Feb-15 [Member] | 2007 [Member] | Panamax [Member] | South Korea
Daily Base Rate		13,750
Daily Base Rate during extended period		14,750
1-Apr-17 [Member] | 2010 [Member] | Ultramax Vessels [Member] | JAPAN
Vessel Charter in period (in months)		3 years 0 months
Daily base rate extended period year2		16,200
Daily base rate extended period Year 3		17,200
Daily Base Rate		14,200
Daily base rate extended period Year 1		15,200
12-Dec-15 [Member] | 2010 [Member] | Supramax [Member] | CHINA
Daily Base Rate		14,250
Daily Base Rate during extended period		14,850
13-Jan-15 [Member] | 2011 [Member] | Supramax [Member] | CHINA
Daily Base Rate		13,750
13-Jun-16 [Member] | 2008 [Member] | Supramax [Member] | CHINA
Daily Base Rate		12,250
Daily Base Rate during extended period		13,000
Base Rate for First 40 Days [Member] | 19-Jun-15 [Member] | 2014 [Member] | Panamax [Member] | CHINA
Daily Base Rate		5,000
Base Rate after 40 Days [Member] | 19-Jun-15 [Member] | 2014 [Member] | Panamax [Member] | CHINA
Daily Base Rate		$ 10,000
Minimum [Member] | 31-Jan-17 [Member] | 2002 [Member] | Handymax [Member] | JAPAN
Vessel Charter in period (in months)		0 years 34 months
Extended Vessel Charter in period		3 years 0 months
Minimum [Member] | 27-Jan-18 [Member] | 2015 [Member] | Supramax [Member] | JAPAN
Extended Vessel Charter in period		2 years 0 months
Minimum [Member] | 15-10-2016 [Member] | 2012 [Member] | Post-Panamax [Member] | CHINA
Vessel Charter in period (in months)		0 years 21 months
Extended Vessel Charter in period		1 year 0 months
Minimum [Member] | 9-May-15 [Member] | 2009 [Member] | Post-Panamax [Member] | CHINA
Vessel Charter in period (in months)		0 years 10 months
Extended Vessel Charter in period		0 years 10 months
Minimum [Member] | 11-Aug-15 [Member] | 2011 [Member] | Post-Panamax [Member] | CHINA
Vessel Charter in period (in months)		0 years 11 months
Extended Vessel Charter in period		1 year 0 months
Minimum [Member] | 23-Jul-15 [Member] | 2014 [Member] | Kamsarmax Vessels [Member] | South Korea
Vessel Charter in period (in months)		0 years 11 months
Extended Vessel Charter in period		1 year 0 months
Minimum [Member] | 28-Jan-15 [Member] | 2009 [Member] | Kamsarmax Vessels [Member] | JAPAN
Vessel Charter in period (in months)		0 years 11 months
Extended Vessel Charter in period		1 year 0 months
Minimum [Member] | 23-Jul-17 [Member] | 2012 [Member] | Kamsarmax Vessels [Member] | South Korea
Vessel Charter in period (in months)		0 years 39 months
Extended Vessel Charter in period		1 year 0 months
Minimum [Member] | 4-Mar-15 [Member] | 2011 [Member] | Kamsarmax Vessels [Member] | South Korea
Vessel Charter in period (in months)		0 years 11 months
Extended Vessel Charter in period		1 year 0 months
Minimum [Member] | 15-Jan-16 [Member] | 2011 [Member] | Kamsarmax Vessels [Member] | South Korea
Vessel Charter in period (in months)		0 years 23 months
Extended Vessel Charter in period		0 years 11 months
Minimum [Member] | 06-Mar-15 [Member] | 2012 [Member] | Kamsarmax Vessels [Member] | South Korea
Vessel Charter in period (in months)		0 years 12 months
Minimum [Member] | 07-Feb-15 [Member] | 2012 [Member] | Kamsarmax Vessels [Member] | CHINA
Vessel Charter in period (in months)		0 years 11 months
Extended Vessel Charter in period		0 years 11 months
Minimum [Member] | 3-Jan-17 [Member] | 2004 [Member] | Panamax [Member] | CHINA
Vessel Charter in period (in months)		0 years 32 months
Minimum [Member] | 10-Jan-15 [Member] | 2014 [Member] | Panamax [Member] | JAPAN
Vessel Charter in period (in months)		0 years 12 months
Minimum [Member] | 19-Jun-15 [Member] | 2014 [Member] | Panamax [Member] | CHINA
Vessel Charter in period (in months)		0 years 10 months
Extended Vessel Charter in period		0 years 0 months 40 days
Minimum [Member] | 17-Feb-15 [Member] | 2007 [Member] | Panamax [Member] | South Korea
Vessel Charter in period (in months)		0 years 11 months
Extended Vessel Charter in period		1 year 0 months
Minimum [Member] | 1-Apr-17 [Member] | 2010 [Member] | Ultramax Vessels [Member] | JAPAN
Extended Vessel Charter in period		3 years 0 months
Minimum [Member] | 12-Dec-15 [Member] | 2010 [Member] | Supramax [Member] | CHINA
Vessel Charter in period (in months)		0 years 20 months
Extended Vessel Charter in period		0 years 10 months
Minimum [Member] | 13-Jan-15 [Member] | 2011 [Member] | Supramax [Member] | CHINA
Vessel Charter in period (in months)		0 years 10 months
Minimum [Member] | 13-Jun-16 [Member] | 2008 [Member] | Supramax [Member] | CHINA
Vessel Charter in period (in months)		0 years 21 months
Maximum [Member] | 31-Jan-17 [Member] | 2002 [Member] | Handymax [Member] | JAPAN
Vessel Charter in period (in months)		0 years 37 months
Maximum [Member] | 15-10-2016 [Member] | 2012 [Member] | Post-Panamax [Member] | CHINA
Vessel Charter in period (in months)		0 years 25 months
Maximum [Member] | 9-May-15 [Member] | 2009 [Member] | Post-Panamax [Member] | CHINA
Vessel Charter in period (in months)		0 years 14 months
Extended Vessel Charter in period		0 years 14 months
Maximum [Member] | 11-Aug-15 [Member] | 2011 [Member] | Post-Panamax [Member] | CHINA
Vessel Charter in period (in months)		0 years 13 months
Maximum [Member] | 23-Jul-15 [Member] | 2014 [Member] | Kamsarmax Vessels [Member] | South Korea
Vessel Charter in period (in months)		0 years 14 months
Maximum [Member] | 28-Jan-15 [Member] | 2009 [Member] | Kamsarmax Vessels [Member] | JAPAN
Vessel Charter in period (in months)		0 years 13 months
Maximum [Member] | 23-Jul-17 [Member] | 2012 [Member] | Kamsarmax Vessels [Member] | South Korea
Vessel Charter in period (in months)		0 years 44 months
Maximum [Member] | 4-Mar-15 [Member] | 2011 [Member] | Kamsarmax Vessels [Member] | South Korea
Vessel Charter in period (in months)		0 years 13 months
Maximum [Member] | 15-Jan-16 [Member] | 2011 [Member] | Kamsarmax Vessels [Member] | South Korea
Vessel Charter in period (in months)		0 years 28 months
Extended Vessel Charter in period		0 years 13 months
Maximum [Member] | 06-Mar-15 [Member] | 2012 [Member] | Kamsarmax Vessels [Member] | South Korea
Vessel Charter in period (in months)		0 years 14 months
Maximum [Member] | 07-Feb-15 [Member] | 2012 [Member] | Kamsarmax Vessels [Member] | CHINA
Vessel Charter in period (in months)		0 years 14 months
Extended Vessel Charter in period		0 years 14 months
Maximum [Member] | 3-Jan-17 [Member] | 2004 [Member] | Panamax [Member] | CHINA
Vessel Charter in period (in months)		0 years 38 months
Maximum [Member] | 10-Jan-15 [Member] | 2014 [Member] | Panamax [Member] | JAPAN
Vessel Charter in period (in months)		0 years 13 months
Maximum [Member] | 19-Jun-15 [Member] | 2014 [Member] | Panamax [Member] | CHINA
Vessel Charter in period (in months)		0 years 13 months
Maximum [Member] | 17-Feb-15 [Member] | 2007 [Member] | Panamax [Member] | South Korea
Vessel Charter in period (in months)		0 years 13 months
Maximum [Member] | 12-Dec-15 [Member] | 2010 [Member] | Supramax [Member] | CHINA
Vessel Charter in period (in months)		0 years 24 months
Extended Vessel Charter in period		0 years 12 months
Maximum [Member] | 13-Jan-15 [Member] | 2011 [Member] | Supramax [Member] | CHINA
Vessel Charter in period (in months)		0 years 13 months
Maximum [Member] | 13-Jun-16 [Member] | 2008 [Member] | Supramax [Member] | CHINA
Vessel Charter in period (in months)		0 years 25 months
Year Built 2014 [Member] | Kamsarmax [Member]
Number of vessels owned		2

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Unaudited Quarterly Results (Details) (USD $) In Thousands, except Share data, unless otherwise specified	0 Months Ended	3 Months Ended							9 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2013	Dec. 31, 2014
Quarterly Financial Information Disclosure [Abstract]
Revenue, Net	$ 0	$ 17,732	$ 12,608	$ 13,180	$ 5,467	$ 0	$ 0	$ 0	$ 0	$ 48,987
Operating Income (Loss)	0	(71,973)	(19,069)	(15,289)	(11,157)	(4,829)	(675)	(1)	(5,505)	(117,488)
Net Income (Loss) Attributable to Parent	$ 0	$ (71,998)	$ (18,909)	$ (15,002)	$ (10,656)	$ (3,569)	$ (2,737)	$ (1)	$ (6,307)	$ (116,565)
Earnings Per Share, Basic	$ 0.00		$ (0.14)	$ (0.11)	$ (0.08)	$ (0.04)	$ (0.08)	$ 0.00	$ (0.16)	$ (0.85)
Earnings Per Share, Diluted	$ 0.00	$ (0.48)	$ (0.14)	$ (0.11)	$ (0.08)	$ (0.04)	$ (0.08)	$ 0.00	$ (0.16)	$ (0.85)
Weighted Average Number of Shares Outstanding, Basic	1,500		133,248,016	133,236,911	132,610,911	91,023,403	33,453,698	1,500	39,925,160	137,592,861
Weighted Average Number of Shares Outstanding, Diluted	1,500	151,119,957	133,248,016	133,236,911	132,910,911	91,023,403	33,453,698	1,500	39,925,160	137,592,861

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Consolidated Balance Sheet (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Assets, Current [Abstract]
Cash and cash equivalents	$ 272,673	$ 733,896
Due from Related Parties, Current	42,373	0
Prepaid expenses and other current assets	3,872	61
Assets held for sale	43,781	0
Total current assets	362,699	733,957
Assets, Noncurrent [Abstract]
Vessels, net	66,633	0
Vessels under construction	866,844	371,692
Deferred financing cost	3,181	0
Other assets	19,543	35
Due from related parties	5,305	0
Total non-current assets	961,506	371,727
Total assets	1,324,205	1,105,684
Liabilities, Current [Abstract]
Bank loans	3,300	0
Accounts payable and accrued expenses	15,811	1,472
Due to related parties	1,231	0
Total current liabilities	20,342	1,472
Liabilities, Noncurrent [Abstract]
Bank loans	30,250	0
Senior Notes	73,625	0
Non-current liabilites	103,875	0
Total liabilities	124,217	1,472
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract]
Common stock, $0.01 par value per share; authorized 450,000,000 shares; issued and outstanding 180,299,695 and 133,403,931 shares as of December 31, 2014 and December 31, 2013, respectively	1,803	1,334
Additional Paid in Capital	1,321,057	1,109,185
Accumulated Deficit	(122,872)	(6,307)
Total shareholders' equity	1,199,988	1,104,212
Total liabilities and shareholders' equity	$ 1,324,205	$ 1,105,684

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Vessels under construction Vessels under construction (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Mar. 20, 2013
Vessels under construction	$ 866,844	$ 371,692	$ 0
Payments for Construction in Process	657,974	371,692
Interest Costs Capitalized	1,600
Transfer from vessel under construction to vessels	(67,319)
Assets Held-for-sale [Member]
Transfer from vessel under construction to vessels	$ (97,103)

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Consolidated Statement of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2014
Net Cash Provided by (Used in) Operating Activities [Abstract]
Net Income (Loss) Attributable to Parent	$ (6,307)	$ (116,565)
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract]
Share-based Compensation	3,359	23,869
Amortization of deferred financing costs	0	150
Vessel depreciation	0	686
Write down on assets held for sale	0	55,487
Increase (Decrease) in Other Operating Assets and Liabilities, Net [Abstract]
Increase in prepaid expenses and other assets	(96)	(3,811)
Increase in accounts payable and accrued expenses	807	5,014
Related party balances	0	(15,170)
Net Cash Provided by (Used in) Operating Activities	(2,237)	(50,340)
Net Cash Provided by (Used in) Investing Activities [Abstract]
Security deposit paid on assets held for sale	0	(31,277)
Payments for vessels and vessels under construction	(371,692)	(651,505)
Net cash used in investing activities	(371,692)	(682,782)
Net Cash Provided by (Used in) Financing Activities [Abstract]
Proceeds from issuance of common stock	1,107,825	187,615
Proceeds from bank loans	0	33,550
Proceed from Senior Notes offering	0	73,625
Debt issue cost paid	0	(22,891)
Net cash provided by financing activities	1,107,825	271,899
(Decrease) increase in cash and cash equivalents	733,896	(461,223)
Cash at cash equivalents, beginning of period	0	733,896
Cash and cash equivalents, end of period	$ 733,896	$ 272,673

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Debt (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Oct. 16, 2014	Dec. 31, 2013	Jun. 27, 2014
Senior Notes	$ 73,625	$ 8,625	$ 0
Long-term Debt, Current Maturities	(3,300)		0
Bank loans	30,250		0
Secured credit facility Maturity June 27, 2019 [Member]
Long-term Debt, Current Maturities	(3,300)		0
Bank loans	30,250		0
Long-term Debt	$ 33,550		$ 0	$ 33,550

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Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2014

Related Party Transactions [Abstract]

Schedule of Related Party Transactions [Table Text Block]

At December 31, 2014 and 2013, we had the following balances with related parties, which have been included in the consolidated balance sheets:

	As of		For the period from March 20, 2013 (date of inception) to
	December 31, 2014		December 31, 2013
Assets
Due from related parties-current:
Scorpio Kamsarmax Pool (1)	$	8,482	$	—
Scorpio Ultramax Pool (1)	2,460		—
Scorpio Tankers(6)	31,277		—
SSM (3)	154		—
Total due from related parties-current	$	42,373	$	—
Due from related parties non-current:
Scorpio Kamsarmax Pool (1)	$	3,272	$	—
Scorpio Ultramax Pool (1)	2,033		—
Total due from related parties non-current	$	5,305	$	—
Liabilities
Due to related parties-current:
SUK (5)	$	44	$	—
SSM (3)	1,131		—
SSH (4)	56		—
Total due from related parties-current	$	1,231	$	—

December 31, 2014 and 2013,we had the following balances with related parties, which have been included in the consolidated statement of operations:

	For the year ended December 31,
	2014		2013
Vessel revenue
Scorpio Kamsarmax Pool (1)	$	34,986	$	—
Scorpio Ultramax Pool (1)	10,196		—
SCM (2)	31		—
Total vessel revenue	$	45,213	$	—
Vessel operating cost:
SSM (3)	$	122	$	—
General and administrative expense:
SCM (2)	148		—
SSM (3)	51		—
SSH (4)	56		—
SUK (5)	717		—
Total general and administrative expense	$	972	$	—

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General and Administrative Expenses (Details Textual) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2014
General And Administrative Expenses Details Narrative
General and Administrative Expense	$ 5,505	$ 30,937
Restricted stock amortization	$ 3,359	$ 23,869

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Segment

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Segments

During 2014, the Company placed its time chartered-in vessels into two pools, the Scorpio Ultramax Pool, in which the Company placed its time chartered-in vessels ranging from 48,500 DWT to 61,000 DWT, and the Scorpio Kamsarmax Pool in which the Company placed its two owned Kamsarmax vessels and its time chartered-in vessels ranging from 75,500 DWT to 98,700 DWT. In addition to the Company’s Ultramax and Kamsarmax segments, the Company has identified a third Capesize segment which includes vessels of approximately 180,000 DWT. Although each vessel within its respective class qualifies as an operating segment under U.S. GAAP, each vessel also exhibits similar long-term financial performance and similar economic characteristics to the other vessels within the respective vessel class, thereby meeting the aggregation criteria in U.S. GAAP. We have therefore chosen to present our segment information by vessel class using the aggregated information from the individual vessels.

The Company’s vessels regularly move between countries in international waters, over dozens of trade routes and, as a result, the disclosure of financial information about geographic areas is impracticable.

Certain of the corporate general and administrative expenses incurred by the Company are not attributable to any specific segment. Accordingly, these costs are not allocated to any of the Company’s segments and are included in the results below as “Corporate”.

The following schedule presents segment information about the Company’s operations for the year ended December 31, 2014:

	Capesize			Kamsarmax			Ultramax			Corporate			Total
Vessel revenue	$	—		$	38,770		$	10,217		$	—		$	48,987
Voyage expenses	—			(3,505		)	(74		)	—			(3,579		)
Vessel operating cost	—			(1,600		)	—			—			(1,600		)
Charterhire expense	—			(57,909		)	(15,305		)	—			(73,214		)
Vessel depreciation	—			(686		)	—			—			(686		)
General and administrative expenses	(39		)	(251		)	(26		)	(31,593		)	(31,909		)
Write down on assets held for sale	(51,968		)	(2,934		)	—			(585		)	(55,487		)
Interest income	—			—			—			1,052			1,052
Foreign exchange gain	—			—			—			43			43
Financial expense, net	—			—			—			(172		)	(172		)
Segment loss	$	(52,007	)	$	(28,115	)	$	(5,188	)	$	(31,255	)	$	(116,565	)

The following schedule presents segment information about the Company’s balance sheet as of December 31, 2014 and December 31, 2013:

Identifiable assets
	December 31, 2014		December 31, 2013
Held by vessel owning subsidiaries or allocated to segments:
Capesize	$	438,256	$	54,772
Kamsarmax	236,278		132,114
Ultramax	288,828		184,905
Held by parent and other subsidiaries, not allocated to segments:
Cash and cash equivalents	265,818		733,818
Other	95,025		75
Total identifiable assets	$	1,324,205	$	1,105,684

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Segments (Tables)

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

The following schedule presents segment information about the Company’s operations for the year ended December 31, 2014:

	Capesize			Kamsarmax			Ultramax			Corporate			Total
Vessel revenue	$	—		$	38,770		$	10,217		$	—		$	48,987
Voyage expenses	—			(3,505		)	(74		)	—			(3,579		)
Vessel operating cost	—			(1,600		)	—			—			(1,600		)
Charterhire expense	—			(57,909		)	(15,305		)	—			(73,214		)
Vessel depreciation	—			(686		)	—			—			(686		)
General and administrative expenses	(39		)	(251		)	(26		)	(31,593		)	(31,909		)
Write down on assets held for sale	(51,968		)	(2,934		)	—			(585		)	(55,487		)
Interest income	—			—			—			1,052			1,052
Foreign exchange gain	—			—			—			43			43
Financial expense, net	—			—			—			(172		)	(172		)
Segment loss	$	(52,007	)	$	(28,115	)	$	(5,188	)	$	(31,255	)	$	(116,565	)

The following schedule presents segment information about the Company’s balance sheet as of December 31, 2014 and December 31, 2013:

Identifiable assets
	December 31, 2014		December 31, 2013
Held by vessel owning subsidiaries or allocated to segments:
Capesize	$	438,256	$	54,772
Kamsarmax	236,278		132,114
Ultramax	288,828		184,905
Held by parent and other subsidiaries, not allocated to segments:
Cash and cash equivalents	265,818		733,818
Other	95,025		75
Total identifiable assets	$	1,324,205	$	1,105,684

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Subsequent Events

12 Months Ended

Dec. 31, 2014

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Subsequent Events

$240,264 Credit Facility 

On January 15, 2015, we entered into a $411,264 senior secured credit facility with a group of financial institutions, which was subsequently reduced on March 26, 2015 by $171,000 to $240,264 due to the removal from financing under this facility of five Capesize newbuilding vessels that we have agreed to convert into product tankers. The proceeds of this facility are expected to finance a portion of the purchase price of seven Capesize vessels in our Newbuilding Program that are under construction at Sungdong. This facility is secured by, among other things, a first preferred mortgage on the seven Capesize newbuilding vessels and guaranteed by each of the collateral vessel owning subsidiaries. Portions of this facility bear interest at LIBOR plus an applicable margin of between 1.90% and 2.95% and a portion has a fixed coupon of 6.25%. This facility matures six years from the delivery of the final vessel securing the facility, and in certain circumstances, the facility matures 12 years after the delivery of each financed vessel. The terms and conditions of the facility, including covenants, are similar to those in our existing credit facilities and customary for financings of this type.

$42,000 Credit Facility

On January 30, 2015, we entered into a $42,000 credit facility with a leading European financial institution. The proceeds of this facility are expected to finance a portion of the purchase price of two Kamsarmax vessels in our Newbuilding Program (of which one Kamsarmax vessel was delivered in January 2015 to us from Imabari and one Kamsarmax vessel is under construction at Imabari). The facility may be drawn in two tranches, each of which has a final maturity of six years from the date of the respective vessel delivery from the yard. This facility bears interest at LIBOR plus a margin of 2.80%. This facility is secured by, among other things, a first preferred mortgage on the two Kamsarmax newbuilding vessels and guaranteed by each of the collateral vessel owning subsidiaries. The terms and conditions of the facility, including covenants, are similar to those in our existing credit facilities and customary for financings of this type.

$26,000 Credit Facility

On February 27, 2015, we entered into a $26,000 senior secured credit facility with ABN AMRO Bank N.V., the Netherlands. The proceeds of this facility are expected to be used to finance a portion of the purchase price of one Capesize vessel, which was delivered to us during the first quarter of 2015. This facility matures at the earlier of (a) the date falling six months after the drawdown date; and (b) the date ten business days after the date on which the Chinese Ministry of Finance has approved insurance coverage to be provided by the China Export & Credit Insurance Corporation, or Sinosure, with respect to our $230,325 Credit Facility (discussed below) and drawings can be made under such facility. This facility bears interest at LIBOR plus an initial margin of 2.00% with monthly step ups of 0.25% until a margin of 3.25% is reached. This facility is secured by, among other things, a first preferred mortgage on the Capesize newbuilding vessel and a parent company guarantee. The terms and conditions of the facility, including covenants, are similar to those in our existing credit facilities and customary for financings of this type.

$19,800 Credit Facility

On March 2, 2015, we entered into a senior secured credit facility for up to $19,800. The facility was previously announced as a $39,600 credit facility, that has now been reduced to a size of $19,800 due to the removal of the financing on one Kamsarmax vessel which we have classified as held for sale. The facility was arranged by ABN AMRO Bank N.V., the Netherlands, with insurance cover provided from Sinosure. The proceeds of this facility are expected to be used to finance a portion of the purchase price of one Kamsarmax vessel currently under construction at Tsuneishi with expected delivery during the first quarter of 2016. The facility matures ten years from the date of delivery of the vessel and bears interest at LIBOR plus a margin of 2.50%. This facility is secured by, among other things, a first priority mortgage on one Kamsarmax newbuilding vessel and a parent company guarantee. The terms and conditions of the facility, including covenants, are similar to those in our existing credit facilities and customary for financings of this type.

$230,325 Credit Facility

On March 2, 2015, we received a commitment from ABN AMRO Bank N.V. and The Export-Import Bank of China, for a loan facility of up to $230,325. This commitment finalizes a previously announced memorandum of understanding for a $234,900 credit facility. This facility was arranged by ABN AMRO Bank N.V., The Netherlands, with insurance cover to be provided from Sinosure. The proceeds of this facility are expected to be used to finance a portion of the purchase price of seven Capesize vessels (of which one vessel was delivered to us in February 2015 from Waigaoqiao and six vessels are currently under construction at Waigaoqiao with expected deliveries between the third quarter of 2015 and the second quarter of 2016). The terms and conditions of this facility, including covenants, will be similar to those in our existing credit facilities and customary for financings of this type. This facility is subject to customary conditions precedent and the execution of definitive documentation. The creditfacility is pending approval from the Chinese Ministry of Finance on the insurance coverage to be provided by Sinosure.

Agreements to Modify Existing Shipbuilding Contracts for Three Capesize Vessels

On March 4, 2015 the Company reached agreements with a shipyard in South Korea to modify existing newbuilding contracts for three Capesize Vessels. The three contracts, two for vessels scheduled for delivery during the first quarter of 2016 and one for a vessel scheduled for delivery during the second quarter of 2016, will now provide for the construction of three LR1 product tankers, two of which will be scheduled for delivery during the second quarter of 2017 and one during the third quarter of 2017. As a result, the Company expects to incur a loss of approximately $23,000 relating to writing down the contracts to their estimated fair market value. Also, upon completion of customary documentation, the LR1 contracts will be re-classified on the balance sheet as assets held for sale.

Newbuilding Vessels Deliveries

The Company has taken delivery of the following Newbuilding vessels during 2015:

• SBI Bravo, an Ultramax vessel, was delivered from Nantong COSCO KHI Ship Engineering Co., Ltd. on January 9, 2015 and commenced operations in the Ultramax Pool.

• SBI Athena, an Ultramax vessel, was delivered from Chengxi Shipyard Co., Ltd. on January 9, 2015 and commenced operations in the Ultramax Pool.

• SBI Samba, a Kamsarmax vessel, was delivered from Imabari Shipbuilding Co. Ltd. on January 23, 2015 and commenced operations in the Kamsarmax Pool.

• SBI Antares, an Ultramax vessel, was delivered from Nantong COSCO KHI Ship Engineering Co., Ltd. on January 30, 2015 and commenced operations in the Ultramax Pool.

• SBI Puro, a Capesize vessel, was delivered from Shanghai Waigaoqiao Shipbuilding Co., Ltd. on February 6, 2015 and commenced employment under a time charter to a major European charterer for ten to13 months at $13,800 per day.

• SBI Leo, an Ultramax vessel, was delivered from Dalian COSCO KHI Ship Engineering Co. Ltd. on February 16, 2015 and commenced operations in the Ultramax Pool.

Installments Paid to Shipyards

From January 1, 2015 to March 31, 2015, we paid $176,023 of installments to shipyards, including payments for the six vessels delivered to us through March 31, 2015.

From January 1, 2015 to March 31, 2015, we paid $19,756 of installments to shipyards relating to vessels under construction that have been classified as held for sale as of December 31, 2014. Such payments are reflected as increases in Assets held for sale.

Borrowings Under Credit Facilities

From January 1, 2015 to March 31, 2015, we received proceeds of $106,388 from borrowings under our credit facilities.

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Related Party Transactions (Details Textual) (USD $)	0 Months Ended	3 Months Ended							9 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Nov. 20, 2014	Jan. 31, 2014	Dec. 17, 2013	Nov. 30, 2013	Sep. 24, 2013	Jul. 16, 2013	Mar. 20, 2013	Nov. 30, 2014	Jul. 31, 2013
Number of months to exit the pool for vessels that do have provisions										0 years 12 months
Due from Other Related Parties, Noncurrent		$ 5,305,000				$ 0			$ 0	$ 5,305,000	$ 0
Due from Related Parties, Current		42,373,000				0			0	42,373,000	0
Vessel revenue-related party pools (Note 15)									0	45,213,000
Months of notice given by the company to terminate the administrative agreement										0 years 24 months
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party									0	972,000	0
Vessel operating costs-related party (Note 15)									0	122,000
Revenue, Net	0	17,732,000	12,608,000	13,180,000	5,467,000	0	0	0	0	48,987,000
Amount due to related party		1,231,000				0			0	1,231,000	0
Common Stock, Par or Stated Value Per Share		$ 0.01				$ 0.01			$ 0.01	$ 0.01	$ 0.01	$ 0.01					$ 0.01
Common stock, $0.01 par value per share; authorized 450,000,000 shares; issued and outstanding 180,299,695 and 133,403,931 shares as of December 31, 2014 and December 31, 2013, respectively		1,803,000				1,334,000			1,334,000	1,803,000	1,334,000	150,000,000	42,360,000	284,018,000	291,000,000		242,800,000
Common Stock, Shares, Issued		180,299,695				133,403,931			133,403,931	180,299,695	133,403,931	40,000,000	4,695,000	31,300,000	32,590,411	33,400,000	31,250,000	1,500
Newbuilding Drybulk carriers [Member]
Minimum carrying capicity of vessels										30,000
Kamsarmax pool [Member]
Concentration Risk, Customer										0.714
Due from Other Related Parties, Noncurrent		3,272,000				0			0	3,272,000	0
Due from Related Parties, Current		8,482,000				0			0	8,482,000	0
Vessel revenue-related party pools (Note 15)									0	34,986,000
Ultramax pool [Member]
Concentration Risk, Customer										0.208
Due from Other Related Parties, Noncurrent		2,033,000				0			0	2,033,000	0
Due from Related Parties, Current		2,460,000				0			0	2,460,000	0
Vessel revenue-related party pools (Note 15)									0	10,196,000
Scorpio Services Holding Limited
Amount of months notice needed to be given for termination of administrative service agreement										0 years 12 months
Years Admin Service agreement may be terminated after IPO										3 years
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party									0	56,000
Fee per day for each vessel owned										300
Amount due to related party		56,000								56,000
Common stock, $0.01 par value per share; authorized 450,000,000 shares; issued and outstanding 180,299,695 and 133,403,931 shares as of December 31, 2014 and December 31, 2013, respectively												15,000,000							15,000	10,000
Common Stock, Shares, Issued			52,394									4,000,000							4,000,000	1,250,000
Maximum drybulk carrier that may be owned by SSH under Administrative Services Agreement										80
Common stock to be issued for Newbuilding Program										2,168,741
Common stock to be issued for first order in our Initial Fleet (in shares)										31,250
Number of vessels ordered in first order										17
Vessel acquisition fee payable to SSH, per vessel acquired										250,000
Scorpio Services Holding Limited | Minimum [Member]
Common stock to be issued for Newbuilding Program										25,497
Scorpio Services Holding Limited | Maximum [Member]
Common stock to be issued for Newbuilding Program										31,250
Scorpio Services Holding Limited | Kamsarmax Vessels [Member]
Common Stock, Shares, Issued		52,394								52,394
Scorpio commercial management (SCM)
Commissions refund										100
Vessel revenue-related party pools (Note 15)									0	31,000
Amount of months notice that must be given by either party for termination of Management Agreements										0 years 24 months
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party									0	148,000
Time charter commissions										69,000
Commission payable to SCM of gross revenues per charter										1.75%
Reduced commission payable to SCM of gross revenues per charter										1.00%
Common Stock, Par or Stated Value Per Share		$ 9.75								$ 9.75
Commercial management fee payable to SCM (per vessel per day)										300
Scorpio Ship Management SSM
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party									0	51,000
Vessel operating costs-related party (Note 15)									0	122,000
Fixtures and Equipment, Gross		154,000				0			0	154,000	0
Amount due to related party		1,131,000				0			0	1,131,000	0
Number of vessels		67								67
Annual Fee per vessel to provide technical management service		200,000								200,000
Management Fees, Base Revenue										1,943,000
Vessel acquisition fee payable to SSH, per vessel acquired										29,000
Scorpio Ship Management SSM | Minimum [Member]
Construction Supervisory Services payable per vessel										200,000
Scorpio Ship Management SSM | Maximum [Member]
Construction Supervisory Services payable per vessel										500,000
SUK
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party									0	717,000
Amount due to related party		44,000				0			0	44,000	0
Scorpio Tankers [Member]
Due from Related Parties, Current		$ 31,277,000				$ 0			$ 0	$ 31,277,000	$ 0
Year Built 2014 [Member] | Scorpio Services Holding Limited | Kamsarmax Vessels [Member]
Number of vessels owned										2

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General information and significant accounting policies

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies [Text Block]

General information and significant accounting policies

Company

Scorpio Bulkers Inc. and its subsidiaries (together “we”, “us” or the “Company”) is a company formed for the purpose of acquiring and operating the latest generation newbuilding drybulk carriers with fuel-efficient specifications and carrying capacities of greater than 30,000 dwt in the international shipping markets. Scorpio Bulkers Inc. was incorporated in the Republic of the Marshall Islands on March 20, 2013.

As of the report date, which was December 31, 2014, the Company owns two Kamsarmax vessels and has ordered 71 newbuilding drybulk carriers, which it intends to operate. The Company also has one Kamsarmax vessel contract and six contracts for the construction of LR2 tankers which are classified on the balance sheet as assets held for sale.

Our vessels are commercially managed by Scorpio Commercial Management S.A.M. (“SCM”), which is majority owned by the Lolli-Ghetti family of which, Emanuele Lauro, our Chairman and Chief Executive Officer is a member. SCM’s services include securing employment, in pools, in the spot market and on time charters.

Our vessels are technically managed by Scorpio Ship Management S.A.M. (“SSM”), which is majority owned by the Lolli-Ghetti family. SSM facilitates vessel support such as crew, provisions, deck and engine stores, insurance, maintenance and repairs, and other services as necessary to operate the vessels such as drydocks and vetting/inspection under a technical management agreement.

We also have an administrative services agreement with Scorpio Services Holding Ltd. (“SSH”), which is majority owned by the Lolli-Ghetti family. The administrative services provided under this agreement primarily include accounting, legal compliance, financial, information technology services, and the provision of administrative staff and office space, which are contracted to SCM. We pay our managers fees for these services and reimburse them for direct or indirect expenses that they incur in providing these services. 

Basis of accounting

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany accounts and transactions have been eliminated in consolidation.

Going concern

The Company’s revenue is derived from time charter revenue, voyage revenue and pool revenue. The bulker shipping industry is volatile and has been experiencing a sustained cyclical downturn. If the downturn continues, this could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows.

The fair market values of the Company’s vessels also experience high volatility. The fair market value of the vessels may increase and decrease depending on a number of factors including, but not limited to, the prevailing level of charter rates and day rates, general economic and market conditions affecting the international shipping industry, types, sizes and ages of vessels, supply and demand for vessels, availability of or developments in other modes of transportation, competition from other shipping companies, cost of newbuildings, governmental or other regulations and technological advances. In addition, as vessels grow older, they generally decline in value. If the fair market value of vessels declines, the Company may not be in compliance with certain provisions of its credit facilities and it may not be able to refinance its debt and obtain additional financing. The prepayment of certain credit facilities may be necessary to cause the Company to maintain compliance with certain covenants in the event that the value of its vessels falls below a certain level. Additionally, if the Company sells one or more of its vessels at a time when vessel prices have fallen, the sale price may be less than the vessel’s carrying value on its consolidated financial statements, resulting in a loss on sale or an impairment loss being recognized, ultimately leading to a reduction in earnings. Furthermore, if vessel values fall significantly, this could indicate a decrease in the recoverable amount for the vessel which may result in an impairment adjustment in the carrying value of the vessel.

As described in Note 8, the Company has commitments to pay for its vessels currently under construction that exceed the amount of financing presently secured for these. If the Company is not able to borrow additional funds, raise other capital or utilize available cash on hand, it may not be able to acquire these newbuilding vessels, which could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flows.

These consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, nor to the amounts and classification of liabilities that may be necessary should the Company be unable to continue as a going concern.

Significant Accounting Policies

Additional information-Development stage company

The Company reported in its December 31, 2013 financial statements that it was a “development stage company”.  In June 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-10, which removes the definition of a development stage entity from the Master Glossary of the Accounting Standards Codification, thereby removing the financial reporting distinctions between development stage entities and other reporting entities from U.S. GAAP.  Therefore, this Update removes retrospectively all incremental financial reporting requirements for development stage entities.

This Update is effective for annual reporting periods beginning after December 15, 2014, and interim periods therein.  Entities are allowed to apply such guidance early for any annual reporting period or interim period for which the entity’s financial statements have not yet been issued.  The Company elected to adopt this guidance during the second quarter ended June 30, 2014.

Accounting estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

In addition to the estimates noted above, significant estimates will include vessel valuations, residual value of vessels, useful life of vessels and the fair value of derivative instruments.

Segment reporting

The Company has three reportable segments, Ultramax vessels, Kamsarmax vessels and Capesize vessels, which are engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk carrier vessels. See Note 16.

Revenue recognition

Vessel revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of discounts, and other sales-related or value added taxes.

Vessel revenue is comprised of either time charter revenue, voyage revenue and/or pool revenue.

(1) Time charter revenue is recognized ratably as services are performed based on the daily rates specified in the time charter contract. We do not recognize revenue when a vessel is off hire.

(2) Voyage charter agreements are charter hires, where a contract is made in the spot market for the use of a vessel for a specific voyage for a specified charter rate. Revenue from voyage charter agreements is recognized on a pro rata basis based on the relative transit time in each period. The period over which voyage revenues are recognized commences at the time the vessel departs from its last discharge port and ends at the time the discharge of cargo at the next discharge port is completed. We do not begin recognizing revenue until a charter has been agreed to by the customer and us, even if the vessel has discharged its cargo and is sailing to the anticipated load port on its next voyage. Estimated losses on voyages are provided for in full at the time such losses become evident. In the application of this policy, we do not begin recognizing revenue until (i) the amount of revenue can be measured reliably, (ii) it is probable that the economic benefits associated with the transaction will flow to the entity, (iii) the transactions’ stage of completion at the balance sheet date can be measured reliably and (iv) the costs incurred and the costs to complete the transaction can be measured reliably.

(3) Pool revenue for each vessel is determined in accordance with the profit sharing terms specified within each pool agreement. In particular, the pool manager aggregates the revenues and expenses of all of the pool participants and distributes the net earnings to participants based on:

• the pool points (vessel attributes such as cargo carrying capacity, fuel consumption, and construction characteristics are taken into consideration); and

• the number of days the vessel participated in the pool in the period.

We recognize pool revenue on a monthly basis, when the vessel has participated in a pool during the period and the amount of pool revenue for the month can be estimated reliably. We receive estimated vessel earnings based on the known number of days the vessel has participated in the pool, the contract terms, and the estimated monthly pool revenue. On a quarterly basis, we receive a report from the pool which identifies the number of days the vessel participated in the pool, the total pool points for the period, the total pool revenue for the period, and the calculated share of pool revenue for the vessel. We review the quarterly report for consistency with each vessel’s pool agreement and vessel management records. The estimated pool revenue is reconciled quarterly, coinciding with our external reporting periods, to the actual pool revenue earned, per the pool report. Consequently, in our financial statements, reported revenues represent actual pooled revenues. While differences do arise in the performance of these quarterly reconciliations, such differences are not material to total reported revenues.

Voyage expenses

Voyage expenses, which primarily include bunkers, port charges, canal tolls, cargo handling operations and brokerage commissions paid by us under voyage charters are expensed as incurred.

Charterhire expense

Charterhire expense is the amount we pay the owner for time chartered-in vessels. The amount is usually for a fixed period of time at charter rates that are generally fixed, but may contain a variable component based on drybulk indices, inflation, interest rates, profit sharing, or current market rates. The vessel’s owner is responsible for crewing and other vessel operating costs. Charterhire expense is recognized ratably over the charterhire period.

Operating leases

Costs in respect of operating leases are charged to the consolidated statement of operations on a straight line basis over the lease term.

Vessel operating costs

Vessel operating costs, which include crewing, repairs and maintenance, insurance, stores, lube oils, communication expenses, and technical management fees, are expensed as incurred. Expenses for repairs and maintenance tend to fluctuate from period to period because most repairs and maintenance typically occur during periodic drydocking. We expect these expenses to increase as our fleet matures and to the extent that it expands.

Additionally, these costs include technical management fees that we pay to SSM (See Note 15). Pursuant to an agreement, or the Master Agreement, SSM provides us with technical services, and we provide them with the ability to subcontract technical management of our vessels with our approval.

Foreign currencies

The individual financial statements of Scorpio Bulkers Inc. and each of its subsidiaries are presented in the currency of the primary economic environment in which we operate (its functional currency), which in all cases is U.S. dollars. For the purpose of the consolidated financial statements, our results and financial position are also expressed in U.S. dollars.

In preparing the financial statements of Scorpio Bulkers Inc. and each of its subsidiaries, transactions in currencies other than the U.S. dollar are recorded at the rate of exchange prevailing on the dates of the transactions. Any change in exchange rate between the date of recognition and the date of settlement may result in a gain or loss which is recognized in the consolidated statement of operations. At the end of each reporting period, monetary assets and liabilities denominated in other currencies are retranslated into the functional currency at rates ruling at that date. All resultant exchange differences have been recognized in the consolidated statement of operations.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly-liquid investments with original maturities of three months or less, and that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. The carrying value of cash and cash equivalents approximates fair value due to the short-term nature of these instruments.

Inventories

Inventories, which are included in Prepaid expenses and other current assets, consist of lubricating oils and other items including stock provisions, and are stated at the lower of cost and net realizable value. Cost is determined using the first in first out method. Stores and spares are charged to vessel operating costs when purchased.

Assets held for sale

Assets held for sale include vessels and contracts for the construction of vessels and are classified in accordance ASC 360, Property, Plant, and Equipment. The Company considers such assets to be held for sale when all of the following criteria are met:

• management commits to a plan to sell the property;

• it is unlikely that the disposal plan will be significantly modified or discontinued;

• the property is available for immediate sale in its present condition;

• actions required to complete the sale of the property have been initiated;

• sale of the property is probable and we expect the completed sale will occur within one year; and

• the property is actively being marketed for sale at a price that is reasonable given its current market value.

Upon designation as an asset held for sale, the Company records the carrying value of the asset at the lower of its carrying value or its estimated fair value, less estimated costs to sell, and, if the asset is a vessel, the Company ceases depreciation.

Vessels, net

Vessels, net is stated at historical cost less accumulated depreciation. Included in vessel costs are acquisition costs directly attributable to the acquisition of a vessel and expenditures made to prepare the vessel for its initial voyage. The Company also capitalizes interest costs for a vessel under construction as a cost which is directly attributable to the acquisition cost of a vessel. Vessels are depreciated on a straight-line basis over their estimated useful lives, determined to be 25 years from the date the vessel is ready for its first voyage. Depreciation is based on cost less the estimated residual value which is the lightweight tonnage of each vessel multiplied by scrap value per ton. The scrap value per ton is estimated taking into consideration the historical four years average scrap market rates at the balance sheet date with changes accounted for in the period of change and in future periods. The Company believes that a 25-year depreciable life for its vessels is consistent with that of other ship owners and with its economic useful life. An increase in the useful life of the vessel or in its residual value would have the effect of decreasing the annual depreciation charge and extending it into later periods. A decrease in the useful life of the vessel or in its residual value would have the effect of increasing the annual depreciation charge. However, when regulations place limitations over the ability of a vessel to trade on a worldwide basis, or when the cost of complying with such regulations is not expected to be recovered, we will adjust the vessel’s useful life to end at the date such regulations preclude such vessel’s further commercial use. The carrying value of the Company’s vessels does not represent the fair market value of such vessels or the amount it could obtain if it were to sell any of its vessels, which could be more or less. Under U.S. GAAP, the Company would not record a loss if the fair market value of a vessel (excluding its charter) is below our carrying value unless and until it determines to sell that vessel or the vessel is impaired as discussed below under “Impairment of long-lived assets.” 

Vessels under construction

Vessels under construction are measured at cost and include costs incurred that are directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. These costs include installment payments made to the shipyards, capitalized interest, professional fees and other costs deemed directly attributable to the construction of the asset. Vessels under construction are not depreciated.

Deferred drydocking costs

The vessels are required to undergo planned drydocks for replacement of certain components, major repairs and maintenance of other components, which cannot be carried out while the vessels are operating, approximately every 30 months or 60 months depending on the nature of work and external requirements. These drydock costs are capitalized and depreciated on a straight-line basis over the estimated period until the next drydock. When the drydock expenditure is incurred prior to the expiry of the period, the remaining balance is expensed. The Company had no drydocking activity during the year ended December 31, 2014 and for the period from March 20, 2013 (date of inception) to December 31, 2013.

We only include in deferred drydocking those direct costs that are incurred as part of the drydocking to meet regulatory requirements, or are expenditures that add economic life to the vessel, increase the vessel’s earnings capacity or improve the vessel’s efficiency. Direct costs include shipyard costs as well as the costs of placing the vessel in the shipyard; cost of travel, lodging and subsistence of personnel sent to the drydocking site to supervise; and the cost of hiring a third party to oversee the drydocking. Expenditures for normal maintenance and repairs, whether incurred as part of the drydocking or not, are expensed as incurred.

Deferred financing costs

Deferred financing costs consist of fees, commissions and legal expenses associated with securing loan facilities and other debt offerings.  These costs are amortized over the life of the related debt and are recorded as financial expense, net.

Other assets

Other assets consists primarily of deferred financing costs relating to the portions of loan facilities that have not yet been drawn down. As the loan facilities are drawn down, the related portion of costs incurred relating to such facilities will be reclassified to Deferred financing costs and amortized over the life of the related debt.

Impairment of long-lived assets held for use

The Company follows ASC Subtopic 360-10, Property, Plant and Equipment (“ASC 360-10”), which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. If indicators of impairment are present, the Company performs an analysis of the anticipated undiscounted future net cash flows of the related long-lived assets, including vessels and vessels under construction. If the carrying value of the related asset exceeds the undiscounted cash flows, the carrying value is reduced to its fair value.

Due to continuing poor industry conditions, impairment tests on a vessel by vessel basis were performed as at December 31, 2014. The most significant assumptions made for the determination of expected cash flows are (i) charter rates on expiry of existing charters, which are based on the current fixing applicable to 5-year time charter rates and thereafter, a reversion to the ten years-year historical average for each category of vessel (ii) off-hire days, which are based on actual off-hire statistics for the Company’s fleet (iii) operating costs, based on current levels escalated over time based on long term trends (iv) dry docking frequency, duration and cost, (v) estimated useful life which is assessed as a total of 25 years and (vi) estimated scrap values. In the case of an indication of impairment, the results of a recoverability test would also be sensitive to the discount rate applied.

The assumptions used involve a considerable degree of estimation. Actual conditions may differ significantly from the assumptions and thus actual cash flows may be significantly different to those expected with a material effect on the recoverability of each vessel’s carrying amount.

No impairment charges were recorded on the Company’s long-lived assets held for use as at December 31, 2014 based on the assumptions made, the expected undiscounted future cash flows exceeding the vessels’ carrying amounts.

Fair value of financial instruments

The estimated fair values of our financial instruments such as amounts due to / due from charterers, accounts payable and long-term debt, approximate their individual carrying amounts due to their short-term maturity or the variable-rate nature of the respective borrowings under the credit facilities.

The fair value of any interest rate swaps is the estimated amount we would receive or have to pay in order to terminate these agreements at the reporting date, taking into account current interest rates and the creditworthiness of the counterparty for assets and our creditworthiness for liabilities.

Provisions

Provisions are recognized when we have a present obligation as a result of a past event, and it is probable that we will be required to settle that obligation. Provisions are measured at our best estimate of the expenditure required to settle the obligation at the balance sheet date, and are discounted to present value where the effect is material.

Deferred financing costs, net

Deferred financing costs, included in other assets, consist of fees, commissions and legal expenses associated with obtaining loan facilities and amending existing loan facilities. These costs are amortized over the life of the related debt and are included in interest expense. Amortization was $150 for the year ended December 31, 2014. Accumulated amortization was $150 as of December 31, 2014.

Earnings per share

Basic earnings per share is calculated by dividing the net income (loss) attributable to equity holders of the common shares by the weighted average number of common shares outstanding. Diluted earnings per share are calculated by adjusting the net income (loss) attributable to equity holders of the parent and the weighted average number of common shares used for calculating basic per share for the effects of all potentially dilutive shares. Such dilutive common shares are excluded when the effect would be to increase earnings per share or reduce a loss per share.

Restricted stock

We follow Accounting Standards Codification (“ASC”) Subtopic 718-10, Compensation-Stock Compensation (“ASC 718-10”), for restricted stock issued under our equity incentive plans. Stock-based compensation costs from restricted stock are classified as a component of additional paid-in capital. The restricted stock awards granted to our employees and directors contain only service conditions and are classified as equity settled. Accordingly, the fair value of our restricted stock awards is calculated by multiplying the share price on the grant date and the number of restricted stock shares granted that are expected to vest. We believe that the share price at the grant date serves as a proxy for the fair value of services to be provided by the employees and directors under the plan.

Compensation expense related to the awards is recognized ratably over the vesting period, based on our estimate of the number of awards that will eventually vest. The vesting period is the period during which an employee or director is required to provide service in exchange for an award and is updated at each balance sheet date to reflect any revisions in estimates of the number of awards expected to vest as a result of the effect of non-market-based vesting conditions.

Income tax

Scorpio Bulkers Inc. and its subsidiaries are incorporated in the Republic of the Marshall Islands, and in accordance with the income tax laws of the Marshall Islands, are not subject to Marshall Islands’ income tax. We are also exempt from income tax in other jurisdictions including the United States of America due to tax treaties; therefore, we will not have any tax charges, benefits, or balances.

Concentration of credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk are amounts due from charterers and from related parties. With respect to balances due from the Scorpio Ultramax Pool and the Scorpio Kamsarmax Pool (see Note 15), the Company, through SCM, limits its credit risk by performing ongoing credit evaluations and, when deemed necessary, requires letters of credit, guarantees or collateral.  The Company earned 71.4% and 20.8% of its revenues from two customers during the year ended December 31, 2014.  Management does not believe significant risk exists in connection with the Company’s concentrations of credit at December 31, 2014.

At December 31, 2014, the Company maintains all of its cash and cash equivalents with five financial institutions.  None of the Company’s cash and cash equivalent balances is covered by insurance in the event of default by these financial institutions.

Interest rate risk

The Company is exposed to the impact of interest rate changes primarily through its variable-rate borrowings which consist of borrowings under its secured credit facilities. Significant increases in interest rates could adversely affect our operating margins, results of operations and our ability to service our debt. The Company intends to selectively enter into derivative contracts to hedge its overall exposure to interest rate risk exposure. Entering into swaps and derivatives transactions is inherently risky and presents various possibilities for incurring significant expenses. The derivatives strategies that the Company employs in the future may not be successful or effective, and it could, as a result, incur substantial additional interest costs.

Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in raising funds to meet commitments associated with financial instruments.

We manage liquidity risk by maintaining adequate reserves and borrowing facilities and by continuously monitoring forecast and actual cash flows.

Current economic conditions make forecasting difficult, and there is the possibility that our actual trading performance during the coming year may be materially different from expectations. Based on internal forecasts and projections that take into account reasonably possible changes in our trading performance, we believe that we have adequate financial resources to continue in operation and meet our financial commitments (including but not limited to newbuilding installments, debt service obligations and charterhire commitments) for a period of at least twelve months from the date of approval of these consolidated financial statements. Accordingly, we continue to adopt the going concern basis in preparing our financial statements.

Currency and exchange rate risk

The international shipping industry’s functional currency is the U.S. Dollar. Virtually all of our revenues and most of our operating costs are in U.S. Dollars. We incur certain operating expenses in currencies other than the U.S. Dollar, and the foreign exchange risk associated with these operating expenses is immaterial.

Recent accounting pronouncements

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers”, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. This Update defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, and shall be applied either retrospectively to each period presented or as a cumulative effect adjustment as of the date of adoption. The Company is evaluating the potential impact of this adoption on its consolidated financial statements.

The following are accounting policies that the Company will adopt going forward when and if it becomes party to derivative financial instruments.

Derivative financial instruments

Derivatives are initially recognized at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each balance sheet date. A derivative with a positive fair value is recognized as a financial asset whereas a derivative with a negative fair value is recognized as a financial liability. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedging relationship. We designate certain derivatives as hedges of highly probable forecast transactions (cash flow hedges) as described further below.

A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months, and it is not expected to be realized or settled within 12 months.

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Consolidated Balance Sheet (Parenthetical) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares Authorized	450,000,000	450,000,000
Common Stock, Shares, Issued	180,299,695	133,403,931
Common Stock, shares, Outstanding	180,299,695	133,403,931

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Equity Incentive Plan

12 Months Ended

Dec. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Equity Incentive Plan

Our board of directors has adopted an equity incentive plan, which we refer to as the Equity Incentive Plan, under which directors, officers and employees of us and our subsidiaries, as well as employees of affiliated companies are eligible to receive incentive stock options and non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units and unrestricted common shares. As of December 31, 2014 we reserved a total of 7,012,391 common shares, for issuance under the Equity Incentive Plan, subject to adjustment for changes in capitalization as provided in the Equity Incentive Plan. Our Equity Incentive Plan is administered by our Compensation Committee.

Under the terms of the plan, stock options and stock appreciation rights granted under the plan will have an exercise price equal to the fair market value of a common share on the date of grant, unless otherwise determined by the plan administrator, but in no event will the exercise price be less than the fair market value of a common share on the date of grant. Options and stock appreciation rights will be exercisable at times and under conditions as determined by the plan administrator, but in no event will they be exercisable later than ten years from the date of grant.

The plan administrator may grant shares of restricted stock and awards of restricted stock units subject to vesting, forfeiture and other terms and conditions as determined by the plan administrator.

Adjustments may be made to outstanding awards in the event of a corporate transaction or change in capitalization or other extraordinary event. In the event of a “change in control” (as defined in the plan), unless otherwise provided by the plan administrator in an award agreement, awards then outstanding will become fully vested and exercisable in full.

Our board of directors may amend or terminate the plan and may amend outstanding awards, provided that no such amendment or termination may be made that would materially impair any rights, or materially increase any obligations, of a grantee under an outstanding award. Shareholder approval of plan amendments will be required under certain circumstances. Unless terminated earlier by our board of directors, the plan will expire ten years from the date the plan is adopted.

On September 30, 2013, we granted an aggregate of 2,775,000 restricted shares to officers and employees. Of this total, 1,395,000 restricted shares vest in three equal installments on July 27, 2015, July 27, 2016 and July 27, 2017. The remaining 1,380,000 restricted shares vest in three equal installments on September 30, 2015, September 30, 2016 and September 30, 2017. The aggregate fair value of these awards is $26,918, which will be amortized as stock-based compensation expense, a component of general and administrative expense, over the vesting periods of each grant.

On November 6, 2013, we granted 1,380,000 restricted shares to officers and employees of the Company. These restricted shares vest in three equal installments on November 6, 2015, November 6, 2016 and November 6, 2017. The fair value of these awards was $13,289, which will be amortized as stock-based compensation expense, a component of general and administrative expense, over the vesting periods of each grant.

On December 17, 2013, we granted 707,020 restricted shares to officers, members of the board of directors and employees of the Company. Of these restricted shares, 617,020 restricted shares vest in three equal installments on December 17, 2015, December 17, 2016 and December 17, 2017 and 90,000 restricted shares vest in three equal installments on December 17, 2014, December 17, 2015 and December 17, 2016. The fair value of these awards was $6,780, which will be amortized as stock-based compensation expense, a component of general and administrative expense, over the vesting periods of each grant.

On February 21, 2014, we granted 2,080,370 restricted shares to officers, members of the board of directors, employees of the Company and certain employees of the Scorpio Group (see Note 15). Of these restricted shares, 1,990,370 restricted shares vest in three equal installments on February 21, 2016, February 21, 2017 and February 21, 2018 and 90,000 restricted shares vest in three equal installments on February 21, 2015, February 21, 2016 and February 21, 2017. The fair value of these awards was $19,410, which will be amortized as stock-based compensation expense, a component of general and administrative expense, over the vesting periods of each grant. 

On May 20, 2014, we granted 68,000 restricted shares to certain employees of the Scorpio Group. These restricted shares vest in three equal installments on February 21, 2016, February 21, 2017 and February 21, 2018. The fair value of these awards was $590, which will be amortized as stock-based compensation expense, a component of general and administrative expense, over the vesting periods of each grant.

A summary of activity for restricted stock awards during the year ended December 31, 2014 and for the period from March 20, 2013 (date of inception) to December 31, 2013 is a follows:

	Number of Shares		Weighted Average Grant Date Fair Value
Outstanding and nonvested, March 20, 2013	—		$	—
Granted	4,862,020		9.66
Vested	—		—
Forfeited	—		—
Outstanding and nonvested, December 31, 2013	4,862,020		9.66
Granted	2,148,370		9.31
Vested	(30,000	)	9.59
Forfeited	—		—
Outstanding and nonvested, December 31, 2014	6,980,390		$	9.56

The following table summarizes the amortization, which will be included in general and administrative expenses, of all of the Company’s restricted stock grants as of December 31, 2014: 

Restricted Stock Grant Date:
	2015		2016		2017		2018		Total
September 30, 2013	$	8,456	$	4,330	$	1,506	$	—	$	14,292
November 6, 2013	4,463		2,367		940		—		7,770
December 18, 2013	2,335		1,221		474		—		4,030
February 21, 2014	6,976		4,172		1,854		220		13,222
May 20, 2014	235		140		62		7		444
Total by year	$	22,465	$	12,230	$	4,836	$	227	$	39,758

For the year ended December 31, 2014 and for the period from March 20, 2013 (date of inception) to December 31, 2013 we incurred $23,869 and $3,359, respectively, of compensation cost relating to the amortization of restricted stock awards.

As of December 31, 2014, unrecognized compensation cost of $39,758 relating to nonvested stock will be recognized over the weighted average period of 1.1 years.

XML

Document and Entity Information	12 Months Ended
	Dec. 31, 2014
Document And Entity Information
Entity Registrant Name	SCORPIO BULKERS INC.
Entity Central Index Key	0001587264
Document Type	20-F
Document Period End Date	Dec. 31, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	180,299,695
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2014

XML

Debt

12 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

Debt

The Company’s long-term debt consists of Senior Notes and bank loans, summarized as follows:

	December 31, 2014			December 31, 2013
Senior Notes	$	73,625		$	—
Bank Loans:
$39.6 Million Credit Facility	$	33,550		$	—
Less: Current portion	(3,300		)	—
	$	30,250		$	—

The future principal repayments under the Company’s long-term debt over the next five years is as follows:

	Year ending December 31,
	2015	2016	2017	2018	2019	Total
Senior Notes	—	—	—	—	73,625	73,625
$39.6 Million Credit Facility	3,300	3,300	2,260	2,260	22,430	33,550
Total	3,300	3,300	2,260	2,260	96,055	107,175

Unsecured Senior Notes

On September 22, 2014, the Company issued $65,000 in aggregate principal amount of 7.5% Senior Notes due September 2019 (the “Senior Notes”) and on October 16, 2014 the Company issued an additional $8,625 aggregate principal amount of Senior Notes when the underwriters partially exercised their option to purchase additional Senior Notes on the same terms and conditions.

All terms mentioned are defined in the indenture.

The Senior Notes will mature on September 15, 2019 and bear interest at a rate of 7.5% per year, payable quarterly on each March 15, June 15, September 15 and December 15, commencing on December 15, 2014. The Senior Notes are redeemable at the Company’s option in whole or in part, at any time on or after September 15, 2016 at a redemption price equal to 100% of the principal amount to be redeemed plus accrued and unpaid interest to, but excluding, the redemption date.

The Senior Notes are our senior unsecured obligations and rank equally with all of our existing and future senior unsecured and unsubordinated debt and are effectively subordinated to our existing and future secured debt, to the extent of the value of the assets securing such debt, and will be structurally subordinated to all existing and future debt and other liabilities of our subsidiaries. No sinking fund is provided for the Senior Notes. The Senior Notes were issued in minimum denominations of $25.00 and integral multiples of $25.00 in excess thereof and are listed on the New York Stock Exchange under the symbol “SLTB.”The Senior Notes require us to comply with certain covenants, including financial covenants; restrictions on consolidations, mergers or sales of assets and prohibitions on paying dividends or returning capital to equity holders if a covenant breach or an event of default has occurred or would occur as a result of such payment. If the Company undergoes a change of control, holders may require us to repurchase for cash all or any portion of their notes at a change of control repurchase price equal to 101% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to, but excluding, the change of control purchase date.

The financial covenants include:

• Net borrowings shall not equal or exceed 70% of total assets.

• Net worth shall always exceed $500,000.

The outstanding balance at December 31, 2014 was $73,625, which is classified as long-term, and we were in compliance with the financial covenants relating to the Senior Notes as of that date.

Secured Credit Facilities

As of December 31, 2014, the Company has four credit agreements in place, which are collateralized by certain of the Company’s vessels.

On June 27, 2014, the Company signed a $39,600 loan agreement (the “$39.6 Million Facility”) which will be used to finance a portion of the market value of two Kamsarmax vessels which have been delivered to the Company as of December 31, 2014. The Company was permitted to draw down in two tranches of $19,800, one for each vessel, against which the Company drew down an aggregate of $33,550 in November 2014. The remaining $6,050 is no longer available to be drawn down upon. This facility, which is secured by those two Kamsarmax vessels with an aggregate carrying value of $66,633 as of December 31, 2014, bears interest at LIBOR plus a margin of 2.925% per annum, bore a commitment fee of 1.17% per annum through November 2014 on the undrawn portion of the facility, and matures on June 27, 2019. Quarterly principal repayments for each tranche are $413 for the first eight installments and $283 thereafter with the balance due at maturity. Principal installments under the $39.6 Million Facility in 2015, 2016, 2017, 2018 and 2019 are $3,300, $3,300, $2,260, $2,260 and $22,430, respectively.

On July 29, 2014, the Company signed a $330,000 loan agreement which will be used to finance a portion of the contract price of 16 Ultramax and six Kamsarmax vessels currently under construction for delivery in 2015 and 2016. This facility, which is secured by those vessels, bears interest at LIBOR plus a margin of 2.925% per annum, bears a commitment fee of 1.17% per annum on the undrawn portion of the facility, and matures on July 29, 2021.

The Company may draw down in 22 tranches of up to $15,000, one for each vessel. For each tranche, repayment is to be made in quarterly installments with the balance due on the maturity date. For each tranche, repayment is to be made in quarterly installments of $313, with the balance due on the maturity date.

On July 30, 2014, the Company signed a loan agreement for up to $67,500 (the “$67.5 Million Facility”) which will be used to finance a portion of the contract price of two Ultramax and two Kamsarmax vessels currently under construction for delivery in 2015 and 2016. This facility, which is secured by those vessels, bears interest at LIBOR plus a margin of 2.95% per annum, bears a commitment fee of 1.25% per annum on the undrawn portion of the facility, and each tranche matures on earlier of seven years from its drawdown or December 31, 2023.

Under the $67.5 Million Facility, the Company may draw down tranches of up to $16,350 for each of the two Ultramax vessels and up to $17,400 for each of the two Kamsarmax vessels. For each tranche, repayment is to be made in quarterly installments with the balance due on the maturity date. For the Ultramax tranches, installments are made in 28 quarterly payments of $292 with a balloon installment of $8,174 due with the 28th installment. For the Kamsarmax tranches, installments are made in 28 quarterly payments of $311 with a balloon installment of $8,692 due with the 28th installment.

On December 30, 2014, the Company signed a $408,976 senior secured loan facility with two leading European financial institutions (the “$409.0 Million Facility”). The proceeds of this facility are expected to finance a portion of the purchase price of 20 of the vessels in our Newbuilding Program (six Ultramax, nine Kamsarmax, and five Capesize vessels) with expected deliveries in 2015 and 2016. This facility has a six year term with customary financial and restrictive covenants, and interest at LIBOR plus a margin of 3.00% and has a term of six years. This facility is secured by, among other things, a first preferred mortgage on each of the 20 newbuilding vessels and guaranteed by each of the collateral vessel owning subsidiaries.

Each of these four credit agreements has the following financial covenants that require us to maintain (based on terms defined in the credit agreements:

• The ratio of net debt to total capitalization no greater than 0.60 to 1.00.

• Consolidated tangible net worth no less than $500,000 plus (i) 25% of cumulative positive net income (on a consolidated basis) for each fiscal quarter commencing on or after December 31, 2013 and (ii) 50% of the value of any new equity issues occurring on or after December 31, 2013.

• The ratio of EBITDA to net interest expense calculated on a trailing four quarter basis of greater than 1.00 to 1.00 from the quarter ending September 30, 2015 until and including the quarter ending December 31, 2016, 2.00 to 1.00 for the quarter ending March 31, 2017 until and including the quarter ending December 31, 2017 and 2.50 to 1.00 thereafter.

• Minimum liquidity of not less than the greater of $50,000 or $850 per owned vessel.

• Maintain a minimum fair value of the collateral for each credit facility, such that the aggregate fair value of the vessels collateralizing the credit facility be at least between 130% to 140%, depending on the credit facility, of the aggregate principal amount outstanding under such credit facility.

Our credit facilities discussed above have, among other things, the following restrictive covenants which would restrict our ability to:

• incur additional indebtedness;

• sell the collateral vessel, if applicable;

• make additional investments or acquisitions;

• pay dividends, in the event of a default, or if an event of default would occur as a result of the payment of dividends; and

• effect a change of control of us.

In addition, our credit facilities contain customary events of default, including cross-default provisions.

As of December 31, 2014, we are in compliance with the financial covenants of each of our four credit facilities.

A summary of our outstanding balances and amounts available under our four credit facilities as of December 31, 2014 is as follows:

	As of December 31, 2014
	Amount outstanding		Amount available
$39.6 Million Credit Facility	33,550		—
$330 Million Credit Facility	—		330,000
$67.5 Million Credit Facility	—		67,500
$408.976 Million Credit Facility	—		408,976
Total	$	33,550	$	806,476

XML

Consolidated Statement of Operations (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2014
Revenues [Abstract]
Vessel revenue	$ 0	$ 3,774
Vessel revenue-related party pools (Note 15)	0	45,213
Total vessel revenue	0	48,987
Operating Expenses [Abstract]
Voyage expenses	0	3,579
Vessel operating costs	0	1,478
Vessel operating costs-related party (Note 15)	0	122
Charterhire expense	0	73,214
Vessel depreciation	0	686
General and Administrative Expense	5,505	30,937
General and administrative expenses-related party (Note 15)	0	972
Write down on assets held for sale	0	(55,487)
Operating Expenses	5,505	166,475
Operating loss	(5,505)	(117,488)
Nonoperating Income (Expense) [Abstract]
Interest income	341	1,052
Foreign exchange gain (loss)	(1,135)	43
Financial expense	(8)	(172)
Total other income	(802)	923
Net Income (Loss) Attributable to Parent	$ (6,307)	$ (116,565)
Weighted Average Number of Shares Outstanding, Basic	39,925,160	137,592,861
Weighted Average Number of Shares Outstanding, Diluted	39,925,160	137,592,861
Earnings Per Share, Basic	$ (0.16)	$ (0.85)
Earnings Per Share, Diluted	$ (0.16)	$ (0.85)

XML

Vessels under construction

12 Months Ended

Dec. 31, 2014

Vessels under construction [Abstract]

Vessels under construction

Vessels under construction

Vessels under construction was $866,844 as of December 31, 2014. Substantially all of this amount relates to installments paid to shipyards on 71 of our newbuilding contracts.

A rollforward of activity within vessels under construction is as follows:

Balance, March 20, 2013 (date of inception)	$	—
Installment payments and other capitalized expenses	371,692
Balance, December 31, 2013	371,692
Installment payments and other	657,974
Capitalized interest	1,600
Transferred to vessels	(67,319		)
Transferred to assets held for sale	(97,103		)
Balance December 31, 2014	$	866,844

As of December 31, 2014, we had contracts, excluding those classified as assets held for sale (see Note 7), to acquire 71 newbuilding drybulk carriers, including 29 Ultramax vessels with carrying capacities between 60,200 and 64,000 dwt, 20 Kamsarmax vessels with carrying capacities between 81,600 and 84,000 dwt and 22 Capesize vessels with carrying capacities of 180,000 dwt. The aggregate purchase price of these 71 newbuildings is approximately $2,662,876 of which we have paid $848,526 through December 31, 2014.

A summary of our vessels under construction is as follows:

Capesize Vessels
	Vessel Name	Expected Delivery (1)	DWT	Shipyard
1	Hull H1309 - TBN SBI Puro	Q1-15	180,000	Shanghai Waigaoqiao Shipbuilding Co., Ltd.
2	Hull H1310 - TBN SBI Valrico	Q3-15	180,000	Shanghai Waigaoqiao Shipbuilding Co., Ltd.
3	Hull H1311 - TBN SBI Maduro	Q4-15	180,000	Shanghai Waigaoqiao Shipbuilding Co., Ltd.
4	Hull H1364 - TBN SBI Belicoso	Q3-15	180,000	Shanghai Waigaoqiao Shipbuilding Co., Ltd.
5	Hull H1365 - TBN SBI Corona	Q1-16	180,000	Shanghai Waigaoqiao Shipbuilding Co., Ltd.
6	Hull H1366 - TBN SBI Diadema	Q1-16	180,000	Shanghai Waigaoqiao Shipbuilding Co., Ltd.
7	Hull H1367 - TBN SBI Estupendo	Q2-16	180,000	Shanghai Waigaoqiao Shipbuilding Co., Ltd.
8	Hull S1205 - TBN SBI Camacho	Q2-15	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
9	Hull S1206 - TBN SBI Montesino	Q2-15	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
10	Hull S1211 - TBN SBI Magnum	Q2-15	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
11	Hull S1212 - TBN SBI Montecristo	Q3-15	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
12	Hull S1213 - TBN SBI Aroma	Q3-15	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
13	Hull S1214 - TBN SBI Cohiba	Q4-15	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
14	Hull S1215 - TBN SBI Habano	Q1-16	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
15	Hull S1216 - TBN SBI Lonsdale *	Q4-15	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
16	Hull S1217 - TBN SBI Partagas *	Q1-16	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
17	Hull S1219 - TBN SBI Toro *	Q2-16	180,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
18	Hull H1059 - TBN SBI Churchill	Q4-15	180,000	Daewoo Mangalia Heavy Industries S.A.
19	Hull H1060 - TBN SBI Perfecto	Q1-16	180,000	Daewoo Mangalia Heavy Industries S.A.
20	Hull H1061 - TBN SBI Presidente	Q2-16	180,000	Daewoo Mangalia Heavy Industries S.A.
21	Hull HN1058 - TBN SBI Behike	Q4-15	180,000	Daehan Shipbuilding Co., Ltd.
22	Hull HN1059 - TBN SBI Monterrey	Q4-15	180,000	Daehan Shipbuilding Co., Ltd.
	Capesize NB DWT		3,960,000

* Subsequently converted to LR1 product tanker contracts. See Note18.

Kamsarmax Vessels
	Vessel Name	Expected Delivery (1)	DWT	Shipyard
1	Hull S1680 - TBN SBI Samba	Q1-15	84,000	Imabari Shipbuilding Co., Ltd.
2	Hull S1681 - TBN SBI Rumba	Q3-15	84,000	Imabari Shipbuilding Co., Ltd.
3	Hull 1090 - TBN SBI Electra	Q3-15	82,000	Jiangsu Yangzijiang Shipbuilding Co., Ltd.
4	Hull 1091 - TBN SBI Flamenco	Q3-15	82,000	Jiangsu Yangzijiang Shipbuilding Co., Ltd.
5	Hull 1092 - TBN SBI Rock	Q4-15	82,000	Jiangsu Yangzijiang Shipbuilding Co., Ltd.
6	Hull 1093 - TBN SBI Twist	Q1-16	82,000	Jiangsu Yangzijiang Shipbuilding Co., Ltd.
7	Hull SS179 - TBN SBI Merengue	Q1-16	81,600	Tsuneishi Group (Zhoushan) Shipbuilding Inc.
8	Hull S1228 - TBN SBI Capoeira	Q2-15	82,000	Hudong-Zhonghua (Group) Co., Ltd.
9	Hull S1722A - TBN SBI Conga	Q2-15	82,000	Hudong-Zhonghua (Group) Co., Ltd.
10	Hull S1723A - TBN SBI Bolero	Q3-15	82,000	Hudong-Zhonghua (Group) Co., Ltd.
11	Hull S1229 - TBN SBI Carioca	Q3-15	82,000	Hudong-Zhonghua (Group) Co., Ltd.
12	Hull S1724A - TBN SBI Sousta	Q3-15	82,000	Hudong-Zhonghua (Group) Co., Ltd.
13	Hull S1725A - TBN SBI Reggae	Q4-15	82,000	Hudong-Zhonghua (Group) Co., Ltd.
14	Hull S1726A - TBN SBI Zumba	Q1-16	82,000	Hudong-Zhonghua (Group) Co., Ltd.
15	Hull S1231 - TBN SBI Macarena	Q1-16	82,000	Hudong-Zhonghua (Group) Co., Ltd.
16	Hull S1735A - TBN SBI Parapara	Q2-16	82,000	Hudong-Zhonghua (Group) Co., Ltd.
17	Hull S1736A - TBN SBI Mazurka	Q2-16	82,000	Hudong-Zhonghua (Group) Co., Ltd.
18	Hull S1230 - TBN SBI Lambada	Q3-15	82,000	Hudong-Zhonghua (Group) Co., Ltd.
19	Hull S1232 - TBN SBI Swing	Q2-16	82,000	Hudong-Zhonghua (Group) Co., Ltd.
20	Hull S1233 - TBN SBI Jive	Q3-16	82,000	Hudong-Zhonghua (Group) Co., Ltd.
	Kamsarmax NB DWT		1,643,600

Ultramax Vessels
	Vessel Name	Expected Delivery (1)	DWT	Shipyard
1	Hull 1907 - TBN SBI Hera	Q2-16	60,200	Mitsui Engineering & Shipbuilding Co., Ltd.
2	Hull 1906 - TBN SBI Zeus	Q2-16	60,200	Mitsui Engineering & Shipbuilding Co., Ltd.
3	Hull 1911 - TBN SBI Poseidon	Q2-16	60,200	Mitsui Engineering & Shipbuilding Co., Ltd.
4	Hull 1912 - TBN SBI Apollo	Q2-16	60,200	Mitsui Engineering & Shipbuilding Co., Ltd.
5	Hull S870 - TBN SBI Echo	Q3-15	61,000	Imabari Shipbuilding Co., Ltd.
6	Hull S871 - TBN SBI Tango	Q3-15	61,000	Imabari Shipbuilding Co., Ltd.
7	Hull S-A098 - TBN SBI Achilles	Q4-15	61,000	Imabari Shipbuilding Co., Ltd.
8	Hull S-A089 - TBN SBI Cronos	Q4-15	61,000	Imabari Shipbuilding Co., Ltd.
9	Hull S-A090 - TBN SBI Hermes	Q1-16	61,000	Imabari Shipbuilding Co., Ltd.
10	Hull NE180 - TBN SBI Bravo	Q1-15	61,000	Nantong COSCO KHI Ship Engineering Co. Ltd.
11	Hull NE181 - TBN SBI Antares	Q1-15	61,000	Nantong COSCO KHI Ship Engineering Co. Ltd.
12	Hull NE182 - TBN SBI Maia	Q3-15	61,000	Nantong COSCO KHI Ship Engineering Co. Ltd.
13	Hull NE183 - TBN SBI Hydra	Q3-15	61,000	Nantong COSCO KHI Ship Engineering Co. Ltd.
14	Hull NE194 - TBN SBI Hyperion	Q2-16	61,000	Nantong COSCO KHI Ship Engineering Co. Ltd.
15	Hull NE195 - TBN SBI Tethys	Q2-16	61,000	Nantong COSCO KHI Ship Engineering Co. Ltd.
16	Hull DE018 - TBN SBI Leo	Q1-15	61,000	Dalian COSCO KHI Ship Engineering Co. Ltd.
17	Hull DE019 - TBN SBI Lyra	Q2-15	61,000	Dalian COSCO KHI Ship Engineering Co. Ltd.
18	Hull DE020 - TBN SBI Subaru	Q2-15	61,000	Dalian COSCO KHI Ship Engineering Co. Ltd.
19	Hull DE021 - TBN SBI Ursa	Q3-15	61,000	Dalian COSCO KHI Ship Engineering Co. Ltd.
20	Hull CX0610 - TBN SBI Athena	Q1-15	64,000	Chengxi Shipyard Co. Ltd.
21	Hull CX0651 - TBN SBI Pegasus	Q3-15	64,000	Chengxi Shipyard Co. Ltd.
22	Hull CX0652 - TBN SBI Orion	Q4-15	64,000	Chengxi Shipyard Co. Ltd.
23	Hull CX0612 - TBN SBI Thalia	Q4-15	64,000	Chengxi Shipyard Co. Ltd.
24	Hull CX0653 - TBN SBI Hercules	Q4-15	64,000	Chengxi Shipyard Co. Ltd.
25	Hull CX0627 - TBN SBI Perseus	Q1-16	64,000	Chengxi Shipyard Co. Ltd.
26	Hull CX0654 - TBN SBI Kratos	Q1-16	64,000	Chengxi Shipyard Co. Ltd.
27	Hull CX0655 - TBN SBI Samson	Q2-16	64,000	Chengxi Shipyard Co. Ltd.
28	Hull CX0613 - TBN SBI Phoebe	Q3-16	64,000	Chengxi Shipyard Co. Ltd.
29	Hull CX0656 - TBN SBI Phoenix	Q3-16	64,000	Chengxi Shipyard Co. Ltd.
	Ultramax NB DWT		1,795,800
	Total Newbuild DWT		7,399,400

(1) Expected delivery date relates to quarter during which each vessel is currently expected to be delivered from the shipyard.

XML

Vessels

12 Months Ended

Dec. 31, 2014

Property, Plant and Equipment [Abstract]

Vessels

Vessels

The Company took delivery of the SBI Cakewalk on August 26, 2014 and SBI Charleston on September 26, 2014. These vessels have an aggregate carrying value of $66,633 which is net of accumulated depreciation of $686 as of December 31, 2014.

Owned vessels

Vessel Name	Year Built	DWT	Vessel Type
SBI Cakewalk	2014	82,000	Kamsarmax
SBI Charleston	2014	82,000	Kamsarmax
Total DWT		164,000

XML

Unaudited Quarterly Results

12 Months Ended

Dec. 31, 2014

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Information [Text Block]

Unaudited Quarterly Results of Operations

In the opinion of the Company’s management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation have been included on a quarterly basis.

	2014 Quarter Ended												2013 Quarter Ended
	Mar-31			Jun-30			Sep-30			Dec-31			Mar-31		Jun-30			Sep-30			Dec-31
Revenues	$	5,467		$	13,180		$	12,608		$	17,732		$	—	$	—		$	—		$	—
Operating loss	(11,157		)	(15,289		)	(19,069		)	(71,973		)	—		(1		)	(675		)	(4,829		)
Net loss	(10,656		)	(15,002		)	(18,909		)	(71,998		)	—		(1		)	(2,737		)	(3,569		)
Net loss per share Basic (2)	$	(0.08	)	$	(0.11	)	$	(0.14	)	$	(0.48	)	$	—	$	—		$	(0.08	)	$	(0.04	)
Net loss per share Diluted(2)	(0.08		)	(0.11		)	(0.14		)	(0.48		)	—		—			(0.08		)	(0.04		)
Weighted average common shares outstanding- Basic	132,610,911			133,236,911			133,248,016			151,119,957			1,500		1,500			33,453,698			91,023,403
Weighted average common shares outstanding- Diluted	132,910,911			133,236,911			133,248,016			151,119,957			1,500		1,500			33,453,698			91,023,403

(1) Operating loss and net loss for the fourth quarter of 2014 includes a write down on assets held for sale of $55,487 .

(2) Amounts may not total to annual loss because each  quarter and year are calculated separately based on basic and diluted weighted-average common shares outstanding during that period.

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Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value, Measurement Inputs, Disclosure [Text Block]

Fair value of financial instruments

The fair values and carrying values of the Company’s financial instruments at December 31, 2014 and December 31, 2013 which are required to be disclosed at fair value, but not recorded at fair value, are noted below.

	December 31, 2014				December 31, 2013
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial assets:
Cash and cash equivalents	$	272,673	$	272,673	$	733,896	$	733,896
Due from related parties	47,678		47,678		—		—
Prepaid expenses and other current assets	3,872		3,872		61		61
Assets held for sale	43,781		43,781		—		—
Financial liabilities:
Accounts payable and accrued expenses	$	15,811	$	15,811	$	1,472	$	1,472
Due to related parties	1,231		1,231		—		—
Bank loans	33,550		33,550		—		—
Senior Notes	73,625		57,133		—		—

ASC Subtopic 820-10, Fair Value Measurements & Disclosures, applies to all assets and liabilities that are being measured and reported on a fair value basis. This guidance enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 requires significant management judgment. The three levels are defined as follows:

Level 1-Valuations based on quoted prices in active markets for identical instruments that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these instruments does not entail a significant degree of judgment.

Level 2-Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

Level 3-Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

Cash and cash equivalents are considered Level 1 items as they represent liquid assets with short-term maturities. The fair value of bank loans is estimated based on current rates offered to the Company for similar debt of the same remaining maturities. The carrying value approximates the fair market value for the variable rate loans.

The Senior Notes are publicly traded on the New York Stock Exchange and are considered a Level 1 item. The carrying amounts of the Company’s other financial instruments at December 31, 2014 and December 31, 2013 (principally balances with related parties, Prepaid expenses and other current assets and Accounts payable and accrued expenses) approximate fair values because of the relatively short maturity of these instruments. The carrying value of amounts Due from related parties classified as noncurrent assets represents working capital balances due from the Scorpio Kamsarmax Pool and Scorpio Ultramax Pool (see Note 15) which are known amounts of cash withheld by from pool distributions which approximate fair value.

The fair value of Assets held for sale (see Note 7) was determined based on the selling price, net of estimated costs to sell, of such assets based on contracts negotiated in December 2014, are considered to be Level 3 items. The following table summarizes the valuation of assets measured on a nonrecurring basis:

	Year ended December 31, 2014				For the period from March 20, 2013 (date of inception) to December 31, 2013
	Total		Significant Unobservable Inputs (Level 3)		Total		Significant Unobservable Inputs (Level 3)
Assets held for sale	$	43,781	$	43,781	$	—	$	—

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Accounts Payable and Accrued Liabilities

12 Months Ended

Dec. 31, 2014

Payables and Accruals [Abstract]

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following:

	December 31,
	2014	2013
Accounts payable	7,934	591
Accrued operating	6,111	41
Accrued administrative	1,766	840
	15,811	1,472

Accrued operating relates to obligations arising from operation of the Company’s owned and chartered-in vessels and construction of the Company’s fleet, such as operating costs and installments on Vessels under construction. Accrued administrative relates to obligations that are corporate or financing in nature, such as payroll, professional fees, interest and commitment fees.

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Debt (Details 2) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Oct. 16, 2014	Dec. 31, 2013	Jun. 27, 2014
2015	$ 3,300
2016	3,300
2017	2,260
2018	2,260
2019	96,055
Senior Notes	73,625	8,625	0
Total Long-term Debt	107,175
Secured credit facility Maturity June 27, 2019 [Member]
Long-term Debt	33,550		0	33,550
Secured Debt [Member] | Secured credit facility Maturity June 27, 2019 [Member]
2015	3,300
2016	3,300
2017	2,260
2018	2,260
2019	22,430
Long-term Debt	33,550			19,800
Secured Debt [Member] | Senior Notes [Member]
2015	0
2016	0
2017	0
2018	0
2019	$ 73,625

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Assets Held for Sale

12 Months Ended

Dec. 31, 2014

Assets Held for Sale [Abstract]

Disclosure of Long Lived Assets Held-for-sale [Table Text Block]

Assets Held for Sale

In December 2014, the Company (i) reached agreements with shipyards in South Korea and Romania to modify six newbuilding contracts for Capesize bulk carriers into newbuilding contracts for LR2 product tankers, (ii) reached an agreement to sell four of these LR2 newbuilding contracts to Scorpio Tankers Inc., a related party, and (iii) granted options to Scorpio Tankers Inc. to purchase the two remaining LR2 newbuilding contracts.

The sale price for each of the four LR2 newbuilding contracts is $51,000. The two option contracts, which expire on May 31, 2015, may be exercised by Scorpio Tankers Inc. for a fixed purchase price of $52,500 for each contract.

Also in December 31, 2014, the Company entered into an agreement to sell one Kamsarmax newbuilding drybulk vessel for approximately $30,650. The vessel is currently being constructed at Tsuneishi Group (Zhoushan) Shipbuilding Inc., and has an expected delivery date in the third quarter of 2015.

The Company has classified these contracts for seven vessels as assets held for sale as of December 31, 2014.   Assets held for sale was $43,781 as of December 31, 2014 and represents the proceeds expected to be realized from the sale of these contracts. The Company recorded a write down on assets held for sale aggregating $55,487 which includes (i) the amount by which balances in vessels under construction for these contracts exceeded the selling prices of the contracts net of remaining installments yet to be made under the contracts, including modifications to contract prices of the six LR2 product tanker contracts, (ii) costs expected to be incurred to suppliers relating to the cancellation of orders for the purchase of components that would have been used in the construction of the Capesize vessels prior to their modification, and (iii) the write off of a portion of deferred financing costs associated with a reduction in negotiated loan facilities that would have been collateralized by certain of the modified Capesize vessels.

A summary of assets held for sale is as follows:

	Vessel Name	Expected Delivery (1)	DWT	Shipyard
1	Hull S3120 - TBN SBI Parejo	Q3-16	115,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
2	Hull S3121 - TBN SBI Tuscamina	Q3-16	115,000	Sungdong Shipbuilding & Marine Engineering Co., Ltd.
3	Hull H5023 - TBN SBI Panatela	Q4-16	112,000	Daewoo Mangalia Heavy Industries S.A.
4	Hull H5024 - TBN SBI Robusto	Q1-17	112,000	Daewoo Mangalia Heavy Industries S.A.
5	Hull H.5003 - TBN SBI Macanudo	Q1-16	115,000	Daehan Shipbuilding Co., Ltd.
6	Hull H.5004 - TBN SBI Cuaba	Q2-16	115,000	Daehan Shipbuilding Co., Ltd.
	Total LR2 HFS NB DWT		684,000
	Kamsarmax Held for Sale
1	Hull SS164 - TBN SBI Salsa	Q3-15	81,600	Tsuneishi Group (Zhoushan) Shipbuilding Inc.
	Total Kamsarmax NB DWT		81,600
	Total HFS DWT		765,600

(1) Expected delivery date relates to quarter during which each vessel is currently expected to be delivered from the shipyard.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Commitment and Contingencies

As of December 31, 2014, the Company’s estimated commitments through the expected delivery dates of the 71 vessels under construction aggregate approximately $1,814,350, which will be payable as follows:

2015	$	1,181,099
2016	633,251
	$	1,814,350

As of December 31, 2014, the Company’s estimated commitments for the seven vessels under construction classified as assets held for sale through the expected delivery dates aggregate approximately $295,305, which will be payable as follows:

2015	$	92,906
2016	175,013
2017	27,386
	$	295,305

As of December 31, 2014, we had a cash balance of $272,673 to fund these future newbuilding commitments; however, a significant portion of our remaining commitments are currently unfunded. If we are not able to borrow additional funds, raise other capital or utilize available cash on hand, we may not be able to acquire these newbuilding vessels, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. 

During the year ended December 31, 2014, the Company incurred charterhire expense of $73,214. As of December 31, 2014, the Company had time chartered-in 20 drybulk vessels. The future estimated minimum charterhire payments for the 19 vessels on fixed dollar amount time charters, excluding the vessel time chartered-in at a rate based on an index and excluding optional periods, are as follows:

2015	$	54,951
2016	31,513
2017	9,978
2018	378
	$	96,820

Time chartered-in vessels

The Company has agreed to time charter-in 20 drybulk vessels. The terms of the time charter-in contracts are summarized as follows:

Vessel Type	Year Built	DWT	Where Built	Daily Base Rate	Earliest Expiry
Post-Panamax	2012	98,700	China	$13,000	15-Oct-16 (1)
Post-Panamax	2009	93,000	China	See Note (2)	09-May-15 (2)
Post-Panamax	2011	93,000	China	$9,500	11-Aug-15 (3)
Kamsarmax	2014	82,500	South Korea	$12,000	23-Jul-15 (4)
Kamsarmax	2009	82,500	Japan	$14,500	28-Jan-15 (5)
Kamsarmax	2012	82,000	South Korea	$15,500	23-Jul-17 (6)
Kamsarmax	2011	81,900	South Korea	$12,750	04-Mar-15 (7)
Kamsarmax	2011	81,500	South Korea	$15,000	15-Jan-16 (8)
Kamsarmax	2012	81,000	South Korea	$15,000	06-Mar-15 (9)
Kamsarmax	2012	79,500	China	$14,000	07-Feb-15 (10)
Panamax	2004	77,500	China	$14,000	03-Jan-17 (11)
Panamax	2014	77,000	Japan	$16,000	10-Jan-15 (12)
Panamax	2014	76,000	China	See Note (13)	19-Jun-15 (13)
Panamax	2007	75,500	South Korea	$13,750	17-Feb-15 (14)
Ultramax	2010	61,000	Japan	$14,200	01-Apr-17 (15)
Supramax	2010	58,000	China	$14,250	12-Dec-15 (16)
Supramax	2011	58,000	China	$13,750	13-Jan-15 (17)
Supramax	2008	58,000	China	$12,250	13-Jun-16 (18)
Supramax	2015	55,000	Japan	$14,000	27-Jan-18 (19)
Handymax	2002	48,500	Japan	$12,000	31-Jan-17 (20)
Aggregate TC DWT		1,500,100

(1) This vessel has been time chartered-in for 21 to 25 months, with such term to be determined at the Company’s option at $13,000 per day. The Company has the option to extend this time charter for one year at $14,000 per day. The vessel was delivered February 22, 2015.

(2) This vessel has been time chartered-in for ten to 14 months at the Company's option at a rate of 90% of the Baltic Panamax 4TC Index. The Company has the option to extend this time charter for an additional ten to 14 months at the same rate of hire. The vessel was delivered on July 9, 2014.

(3) This vessel has been time chartered-in for 11 to 13 months, with such term to be determined at the Company’s option at $9,500 per day. The Company has the option to extend this time charter for one year at $11,500 per day. The vessel was delivered on September 11, 2014.

(4) This vessel has been time chartered-in for 11 to 14 months, with such term to be determined at the Company’s option at $12,000 per day. The Company has the option to extend this time charter for one year. The vessel was delivered on August 22, 2014.

(5) This vessel has been time chartered-in for 11 to 13 months, with such term to be determined at the Company’s option at $14,500 per day. The Company has the option to extend this time charter for one year at $15,500 per day. The vessel was delivered on March 8, 2014 and was returned to its owner on January 28, 2015.

(6) This vessel has been time chartered-in for 39 to 44 months, with such term to be determined at the Company’s option at $15,500 per day. The Company has the option to extend this time charter for one year at $16,300 per day. The vessel was delivered on April 23, 2014.

(7) This vessel has been time chartered-in for 11 to 13 months, with such term to be determined at the Company’s option at $12,750 per day. The Company has the option to extend this time charter for one year at $13,750 per day. The vessel was delivered on May 3, 2014 and was returned to its owner on March 4, 2015.

(8) This vessel has been time chartered-in for 23 to 28 months, with such term to be determined at the Company’s option at $15,000 per day. The Company has the option to extend the charter for an additional 11 to 13 months at $16,000 per day. The vessel was delivered on February 15, 2014.

(9) This vessel has been time chartered-in for 12 to 14 months, with such term to be determined at the Company’s option at $15,000 per day. The vessel was delivered on February 10, 2014 and was returned to its owner on March 6, 2015.

(10) This vessel has been time chartered-in for 11 to 14 months, with such term to be determined at the Company’s option at $14,000 per day. The Company has the option to extend the charter for an additional 11 to 14 months at $14,750 per day. The vessel was delivered on February 23, 2014 and was returned to its owner on February 7, 2015.

(11) This vessel has been time chartered-in for 32 to 38 months, at the Company’s option at $14,000 per day. The vessel was delivered on May 3, 2014.

(12) This vessel has been time chartered-in for 12 to 13 months, with such term to be determined at the Company’s option at $16,000 per day. The vessel was delivered on March 4, 2014 and was returned to its owner on January 10, 2015, for which the Company incurred a fee of $375 for the early redelivery of this vessel.

(13) This vessel has been time chartered-in for ten to 13 months, with at the Company’s option at $5,000 per day for the first 40 days and $10,000 per day thereafter. The Company has the option to extend the charter for an additional year. The vessel was delivered on August 10, 2014.

(14) This vessel has been time chartered-in for 11 to 13 months, with such term to be determined at the Company’s option at $13,750 per day. The Company has the option to extend the charter for an additional year at $14,750 per day. This vessel was delivered on March 14, 2014 and was returned to its owner on February 17, 2015.

(15) This vessel has been time chartered-in for three years at $14,200 per day. The Company has options to extend the charter for up to three consecutive one year periods at $15,200 per day, $16,200 per day and $17,200 per day, respectively. The vessel was delivered on April 13, 2014.

(16) This vessel has been time chartered-in for 20 to 24 months, with such term to be determined at the Company’s option at $14,250 per day. The Company has the option to extend the charter for an additional ten to 12 months at $14,850 per day. The vessel was delivered on April 12, 2014.

(17) This vessel has been time chartered-in for ten to 13 months, with such term to be determined at the Company’s option at $13,750 per day. The vessel was delivered on March 18, 2014 and was returned to its owner on January 13, 2015.

(18) This vessel has been time chartered-in for 21 to 25 months, with such term to be determined at the Company’s option at $12,250 per day. The Company has the option to extend this time charter for one year at $13,000 per day. The vessel was delivered on September 13, 2014.

(19) This vessel has been time chartered-in for three years at $14,000 per day. The Company has options to extend the charter for up to two consecutive one year periods at $15,000 per day and $16,000 per day, respectively. The vessel was delivered January 27, 2015.

(20) This vessel has been time chartered-in for 34 to 37 months, with such term to be determined at the Company’s option at $12,000 per day. The Company has options to extend the charter for up to three consecutive one year periods at $12,750 per day, $13,600 per day and $14,800 per day, respectively. The vessel was delivered on March 31, 2014.

The following table sets forth the Company’s total contractual obligations at December 31, 2014 that are not shown elsewhere in the notes to consolidated financial statements:

	Year ending December 31,
	2015		2016		2017		2018		2019		Thereafter		Total
Interest payments (1)	$	6,548	$	6,444	$	6,351	$	6,278	$	4,254	$	—	$	29,875
Commitment fees (2)	7,612		1,330		—		—		—		—		8,942
Commercial management fee (3)	219		219		—		—		—		—		438
Technical management fee (4)	400		400		—		—		—		—		800
	$	14,779	$	8,393	$	6,351	$	6,278	$	4,254	—		$	40,055

(1) Represents the interest payments on outstanding balances of Senior Notes at 7.5% per annum and bank loans, for which the LIBOR rate in effect as of December 31, 2014 of 0.2356% plus a margin of 2.925%.

(2) Represents the commitment fees we will pay under our three credit facilities at December 31, 2014 on which we are incurring commitment fees (as defined in Note 12, the $67.5 Million Senior Secured Credit Facility, the $330.0 Million Senior Secured Credit Facility and the $409.0 Million Senior Secured Credit Facility). Such fees are calculated on the undrawn portion of these credit facilities and assume that the committed amount of each vessel will be drawn when the vessel collateralizing the credit facility is delivered from the shipyards.

(3) Represents the commercial management fee we pay to SCM of $300 per day for each vessel that we own based on the two vessels we owned as of December 31, 2014.

(4) Represents the annual technical management fee we pay to SSM of $200,000 per vessel that we own based on the two vessels we owned as of December 31, 2014.

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Common Shares

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Common Shares

On March 20, 2013, the Company issued 1,500 common shares in connection with its formation.

Between July 1, 2013 and July 16, 2013, the Company issued and sold 31,250,000 common shares, par value $0.01 per share, for net proceeds of $242,800.

On September 24, 2013, the Company issued and sold an additional 33,400,000 common shares for net proceeds of $290,490, as denominated in Norwegian kroner (NOK) as of that date, in Norwegian private placement transactions exempt from registration under the Securities Act. As of September 24, 2013, the Company recorded a receivable from shareholders of $289,956, denominated in NOK, which was not paid until October 2013 when the Company received $288,822 in full settlement of that receivable. The $1,134 difference between the amount initially recorded as a shareholder receivable and the amount subsequently collected was attributable to a change in exchange rate and recorded as foreign exchange loss on the Company’s consolidated statement of operations.

In November 2013, the Company received $291,000 of proceeds from the sale of 32,590,411 common shares that had been consummated in October 2013 in a Norwegian private transaction exempt from registration under the Securities Act.

On December 17, 2013, the Company received $284,018 of proceeds from the sale of 31,300,000 common shares in its initial public offering.

In January 2014, the underwriters in the Company’s initial public offering, which closed on December 17, 2013, exercised in full their option to purchase an additional 4,695,000 common shares at the public offering price of $9.75 per share. The sale of these common shares resulted in net proceeds to the Company of approximately $42,360, after deducting underwriters’ discounts and commissions.

During the third quarter of 2014, the Company issued a total of 52,394 shares to Scorpio Services Holding Limited, or SSH, pursuant to the Administrative Services Agreement relating to two Kamsarmax Vessels delivered under our Newbuilding program (See Note 15). The aggregate value of these shares was $500.

On November 20, 2014 the Company issued 40,000,000 Common shares through a Securities Purchase Agreement with certain institutional investors for the private placement of shares of its common stock, par value $0.01 per share for $150,000. Of this share issuance, SSH acquired 4,000,000 shares for $15,000.

As of December 31, 2014 we have:

• 180,299,695 common shares outstanding, the $0.01 par value of which is recorded as common stock of $1,803.

• Paid-in capital of $1,321,057 which substantially represents the excess of net proceeds from common stock issuances over the par value as well as the amount of cumulative restricted stock amortization.

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Fair value (Details 1) (Fair Value, Measurements, Nonrecurring [Member])	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long Lived Assets Held-for-sale, Description	43781	0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long Lived Assets Held-for-sale, Description	43781	0

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Related Party Transactions (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Related Party Transaction [Line Items]
Vessel revenue-related party pools (Note 15)	$ 0	$ 45,213
Vessel operating costs-related party (Note 15)	0	122
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party	0	972	0
Kamsarmax pool [Member]
Related Party Transaction [Line Items]
Vessel revenue-related party pools (Note 15)	0	34,986
Ultramax pool [Member]
Related Party Transaction [Line Items]
Vessel revenue-related party pools (Note 15)	0	10,196
Scorpio commercial management (SCM)
Related Party Transaction [Line Items]
Vessel revenue-related party pools (Note 15)	0	31
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party	0	148
Scorpio Ship Management SSM
Related Party Transaction [Line Items]
Vessel operating costs-related party (Note 15)	0	122
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party	0	51
Scorpio Services Holding Limited
Related Party Transaction [Line Items]
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party	0	56
SUK
Related Party Transaction [Line Items]
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party	$ 0	$ 717

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Fair Value of Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Oct. 16, 2014	Dec. 31, 2013	Mar. 20, 2013
Statement [Line Items]
Prepaid Expense and Other Assets, Current	$ 3,872		$ 61
Cash and cash equivalents	272,673		733,896	0
Senior Notes	73,625	8,625	0
Reported Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Statement [Line Items]
Prepaid Expense and Other Assets, Current	3,872		61
Accounts Payable and Accrued Liabilities, Fair Value Disclosure	15,811		1,472
Cash and cash equivalents	272,673		733,896
Accounts Receivable, Related Parties	47,678		0
Long-term Debt	33,550		0
Senior Notes	73,625		0
Accounts Payable, Related Parties	1,231		0
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 1 [Member]
Statement [Line Items]
Accrued Liabilities, Fair Value Disclosure	3,872		61
Accounts Payable and Accrued Liabilities, Fair Value Disclosure	15,811		1,472
Cash and Cash Equivalents, Fair Value Disclosure	272,673		733,896
Accounts Receivable, Fair Value Disclosure	47,678		0
Long-term Debt, Fair Value	33,550		0
Senior Notes	57,133		0
Accounts Payable, Related Parties	1,231		0
Estimate of Fair Value Measurement [Member] | Fair Value, Inputs, Level 2 [Member]
Statement [Line Items]
Assets Held-for-sale, Long Lived, Fair Value Disclosure	$ 43,781		$ 0

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Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value, by Balance Sheet Grouping [Table Text Block]

The fair values and carrying values of the Company’s financial instruments at December 31, 2014 and December 31, 2013 which are required to be disclosed at fair value, but not recorded at fair value, are noted below.

	December 31, 2014				December 31, 2013
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial assets:
Cash and cash equivalents	$	272,673	$	272,673	$	733,896	$	733,896
Due from related parties	47,678		47,678		—		—
Prepaid expenses and other current assets	3,872		3,872		61		61
Assets held for sale	43,781		43,781		—		—
Financial liabilities:
Accounts payable and accrued expenses	$	15,811	$	15,811	$	1,472	$	1,472
Due to related parties	1,231		1,231		—		—
Bank loans	33,550		33,550		—		—
Senior Notes	73,625		57,133		—		—

Fair Value Measurements, Nonrecurring [Table Text Block]

	Year ended December 31, 2014				For the period from March 20, 2013 (date of inception) to December 31, 2013
	Total		Significant Unobservable Inputs (Level 3)		Total		Significant Unobservable Inputs (Level 3)
Assets held for sale	$	43,781	$	43,781	$	—	$	—

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Commitments and Contingencies (Details 1) (USD $)	12 Months Ended
	Dec. 31, 2014 DWT
DWT	7,399,400
Post-Panamax [Member] | 2012 [Member] | CHINA | 15-10-2016 [Member]
DWT	98,700
Daily Base Rate	13,000
Daily Base Rate during extended period	14,000
Post-Panamax [Member] | 2012 [Member] | CHINA | 15-10-2016 [Member] | Maximum [Member]
Vessel Charter in period (in months)	0 years 25 months
Post-Panamax [Member] | 2012 [Member] | CHINA | 15-10-2016 [Member] | Minimum [Member]
Vessel Charter in period (in months)	0 years 21 months
Extended Vessel Charter in period	1 year 0 months
Post-Panamax [Member] | 2011 [Member] | CHINA | 11-Aug-15 [Member]
DWT	93,000
Daily Base Rate	9,500
Daily Base Rate during extended period	11,500
Post-Panamax [Member] | 2011 [Member] | CHINA | 11-Aug-15 [Member] | Maximum [Member]
Vessel Charter in period (in months)	0 years 13 months
Post-Panamax [Member] | 2011 [Member] | CHINA | 11-Aug-15 [Member] | Minimum [Member]
Vessel Charter in period (in months)	0 years 11 months
Extended Vessel Charter in period	1 year 0 months
Post-Panamax [Member] | 2009 [Member] | CHINA | 9-May-15 [Member]
DWT	93,000
Chartered-in rate as a percentage of Baltic Panamax 4TC Index (as a percentage)	90.00%
Post-Panamax [Member] | 2009 [Member] | CHINA | 9-May-15 [Member] | Maximum [Member]
Vessel Charter in period (in months)	0 years 14 months
Extended Vessel Charter in period	0 years 14 months
Post-Panamax [Member] | 2009 [Member] | CHINA | 9-May-15 [Member] | Minimum [Member]
Vessel Charter in period (in months)	0 years 10 months
Extended Vessel Charter in period	0 years 10 months
Kamsarmax Vessels [Member]
DWT	1,643,600
Kamsarmax Vessels [Member] | Maximum [Member]
DWT	84,000
Kamsarmax Vessels [Member] | Minimum [Member]
DWT	81,600
Kamsarmax Vessels [Member] | 2012 [Member] | CHINA | 07-Feb-15 [Member]
DWT	79,500
Daily Base Rate	14,000
Daily Base Rate during extended period	14,750
Kamsarmax Vessels [Member] | 2012 [Member] | CHINA | 07-Feb-15 [Member] | Maximum [Member]
Vessel Charter in period (in months)	0 years 14 months
Extended Vessel Charter in period	0 years 14 months
Kamsarmax Vessels [Member] | 2012 [Member] | CHINA | 07-Feb-15 [Member] | Minimum [Member]
Vessel Charter in period (in months)	0 years 11 months
Extended Vessel Charter in period	0 years 11 months
Kamsarmax Vessels [Member] | 2012 [Member] | South Korea | 23-Jul-17 [Member]
DWT	82,000
Daily Base Rate	15,500
Daily Base Rate during extended period	16,300
Kamsarmax Vessels [Member] | 2012 [Member] | South Korea | 23-Jul-17 [Member] | Maximum [Member]
Vessel Charter in period (in months)	0 years 44 months
Kamsarmax Vessels [Member] | 2012 [Member] | South Korea | 23-Jul-17 [Member] | Minimum [Member]
Vessel Charter in period (in months)	0 years 39 months
Extended Vessel Charter in period	1 year 0 months
Kamsarmax Vessels [Member] | 2012 [Member] | South Korea | 06-Mar-15 [Member]
DWT	81,000
Daily Base Rate	15,000
Kamsarmax Vessels [Member] | 2012 [Member] | South Korea | 06-Mar-15 [Member] | Maximum [Member]
Vessel Charter in period (in months)	0 years 14 months
Kamsarmax Vessels [Member] | 2012 [Member] | South Korea | 06-Mar-15 [Member] | Minimum [Member]
Vessel Charter in period (in months)	0 years 12 months
Kamsarmax Vessels [Member] | 2011 [Member] | South Korea | 4-Mar-15 [Member]
DWT	81,900
Daily Base Rate	12,750
Daily Base Rate during extended period	13,750
Kamsarmax Vessels [Member] | 2011 [Member] | South Korea | 4-Mar-15 [Member] | Maximum [Member]
Vessel Charter in period (in months)	0 years 13 months
Kamsarmax Vessels [Member] | 2011 [Member] | South Korea | 4-Mar-15 [Member] | Minimum [Member]
Vessel Charter in period (in months)	0 years 11 months
Extended Vessel Charter in period	1 year 0 months
Kamsarmax Vessels [Member] | 2011 [Member] | South Korea | 15-Jan-16 [Member]
DWT	81,500
Daily Base Rate	15,000
Daily Base Rate during extended period	16,000
Kamsarmax Vessels [Member] | 2011 [Member] | South Korea | 15-Jan-16 [Member] | Maximum [Member]
Vessel Charter in period (in months)	0 years 28 months
Extended Vessel Charter in period	0 years 13 months
Kamsarmax Vessels [Member] | 2011 [Member] | South Korea | 15-Jan-16 [Member] | Minimum [Member]
Vessel Charter in period (in months)	0 years 23 months
Extended Vessel Charter in period	0 years 11 months
Kamsarmax Vessels [Member] | 2009 [Member] | JAPAN | 28-Jan-15 [Member]
DWT	82,500
Daily Base Rate	14,500
Daily Base Rate during extended period	15,500
Kamsarmax Vessels [Member] | 2009 [Member] | JAPAN | 28-Jan-15 [Member] | Maximum [Member]
Vessel Charter in period (in months)	0 years 13 months
Kamsarmax Vessels [Member] | 2009 [Member] | JAPAN | 28-Jan-15 [Member] | Minimum [Member]
Vessel Charter in period (in months)	0 years 11 months
Extended Vessel Charter in period	1 year 0 months
Kamsarmax Vessels [Member] | 2014 [Member] | South Korea | 23-Jul-15 [Member]
DWT	82,500
Daily Base Rate	12,000
Kamsarmax Vessels [Member] | 2014 [Member] | South Korea | 23-Jul-15 [Member] | Maximum [Member]
Vessel Charter in period (in months)	0 years 14 months
Kamsarmax Vessels [Member] | 2014 [Member] | South Korea | 23-Jul-15 [Member] | Minimum [Member]
Vessel Charter in period (in months)	0 years 11 months
Extended Vessel Charter in period	1 year 0 months
Ultramax Vessels [Member]
DWT	1,795,800
Ultramax Vessels [Member] | Maximum [Member]
DWT	64,000
Ultramax Vessels [Member] | Minimum [Member]
DWT	60,200
Ultramax Vessels [Member] | 2010 [Member] | JAPAN | 1-Apr-17 [Member]
DWT	61,000
Daily Base Rate	14,200
Daily base rate extended period Year 1	15,200
Daily base rate extended period year2	16,200
Daily base rate extended period Year 3	17,200
Vessel Charter in period (in months)	3 years 0 months
Ultramax Vessels [Member] | 2010 [Member] | JAPAN | 1-Apr-17 [Member] | Minimum [Member]
Extended Vessel Charter in period	3 years 0 months
Panamax [Member] | 2014 [Member] | CHINA | 19-Jun-15 [Member]
DWT	76,000
Panamax [Member] | 2014 [Member] | CHINA | 19-Jun-15 [Member] | Maximum [Member]
Vessel Charter in period (in months)	0 years 13 months
Panamax [Member] | 2014 [Member] | CHINA | 19-Jun-15 [Member] | Minimum [Member]
Vessel Charter in period (in months)	0 years 10 months
Extended Vessel Charter in period	0 years 0 months 40 days
Panamax [Member] | 2014 [Member] | JAPAN | 10-Jan-15 [Member]
DWT	77,000
Daily Base Rate	16,000
Panamax [Member] | 2014 [Member] | JAPAN | 10-Jan-15 [Member] | Maximum [Member]
Vessel Charter in period (in months)	0 years 13 months
Panamax [Member] | 2014 [Member] | JAPAN | 10-Jan-15 [Member] | Minimum [Member]
Vessel Charter in period (in months)	0 years 12 months
Panamax [Member] | 2004 [Member] | CHINA | 3-Jan-17 [Member]
DWT	77,500
Daily Base Rate	14,000
Panamax [Member] | 2004 [Member] | CHINA | 3-Jan-17 [Member] | Maximum [Member]
Vessel Charter in period (in months)	0 years 38 months
Panamax [Member] | 2004 [Member] | CHINA | 3-Jan-17 [Member] | Minimum [Member]
Vessel Charter in period (in months)	0 years 32 months
Panamax [Member] | 2007 [Member] | South Korea | 17-Feb-15 [Member]
DWT	75,500
Daily Base Rate	13,750
Daily Base Rate during extended period	14,750
Panamax [Member] | 2007 [Member] | South Korea | 17-Feb-15 [Member] | Maximum [Member]
Vessel Charter in period (in months)	0 years 13 months
Panamax [Member] | 2007 [Member] | South Korea | 17-Feb-15 [Member] | Minimum [Member]
Vessel Charter in period (in months)	0 years 11 months
Extended Vessel Charter in period	1 year 0 months
Supramax [Member] | 2010 [Member] | CHINA | 12-Dec-15 [Member]
DWT	58,000
Daily Base Rate	14,250
Daily Base Rate during extended period	14,850
Supramax [Member] | 2010 [Member] | CHINA | 12-Dec-15 [Member] | Maximum [Member]
Vessel Charter in period (in months)	0 years 24 months
Extended Vessel Charter in period	0 years 12 months
Supramax [Member] | 2010 [Member] | CHINA | 12-Dec-15 [Member] | Minimum [Member]
Vessel Charter in period (in months)	0 years 20 months
Extended Vessel Charter in period	0 years 10 months
Supramax [Member] | 2011 [Member] | CHINA | 13-Jan-15 [Member]
DWT	58,000
Daily Base Rate	13,750
Supramax [Member] | 2011 [Member] | CHINA | 13-Jan-15 [Member] | Maximum [Member]
Vessel Charter in period (in months)	0 years 13 months
Supramax [Member] | 2011 [Member] | CHINA | 13-Jan-15 [Member] | Minimum [Member]
Vessel Charter in period (in months)	0 years 10 months
Supramax [Member] | 2008 [Member] | CHINA | 13-Jun-16 [Member]
DWT	58,000
Daily Base Rate	12,250
Daily Base Rate during extended period	13,000
Supramax [Member] | 2008 [Member] | CHINA | 13-Jun-16 [Member] | Maximum [Member]
Vessel Charter in period (in months)	0 years 25 months
Supramax [Member] | 2008 [Member] | CHINA | 13-Jun-16 [Member] | Minimum [Member]
Vessel Charter in period (in months)	0 years 21 months
Supramax [Member] | 2015 [Member] | JAPAN | 27-Jan-18 [Member]
DWT	55,000
Daily Base Rate	14,000
Daily base rate extended period Year 1	15,000
Daily base rate extended period year2	16,000
Vessel Charter in period (in months)	3 years 0 months
Supramax [Member] | 2015 [Member] | JAPAN | 27-Jan-18 [Member] | Minimum [Member]
Extended Vessel Charter in period	2 years 0 months
Handymax [Member] | 2002 [Member] | JAPAN | 31-Jan-17 [Member]
DWT	48,500
Daily Base Rate	12,000
Daily base rate extended period Year 1	12,750
Daily base rate extended period year2	13,600
Daily base rate extended period Year 3	14,800
Handymax [Member] | 2002 [Member] | JAPAN | 31-Jan-17 [Member] | Maximum [Member]
Vessel Charter in period (in months)	0 years 37 months
Handymax [Member] | 2002 [Member] | JAPAN | 31-Jan-17 [Member] | Minimum [Member]
Vessel Charter in period (in months)	0 years 34 months
Extended Vessel Charter in period	3 years 0 months
Time chartered vessels [Member]
DWT	1,500,100

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Related Party Transactions

12 Months Ended

Dec. 31, 2014

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

Related Party Transactions

Our Chairman and Chief Executive Officer, Mr. Emanuele Lauro, is a member of the Lolli-Ghetti family, which in 2009 founded Scorpio Tankers Inc. (NYSE: “STNG”), or Scorpio Tankers, a large international shipping company engaged in seaborne transportation of refined petroleum products, of which Mr. Lauro is currently the Chairman and Chief Executive Officer. The Lolli-Ghetti family also owns and controls the Scorpio Group, which includes Scorpio Ship Management S.A.M., or SSM, which provides us with vessel technical management services, Scorpio Commercial Management S.A.M., or SCM, which provides us with vessel commercial management services, Scorpio Services Holding Limited, or SSH, which provides us and other related entities with administrative services and services related to the acquisition of vessels and Scorpio UK Limited, or SUK. Our Co-Founder, President and Director, Mr. Robert Bugbee is also the President and a Director of Scorpio Tankers, has a senior management position at the Scorpio Group. SSM and SCM also provide technical and commercial management services to Scorpio Tankers as well as unaffiliated vessel owners.

We entered into an Administrative Services Agreement with SSH, a party related to us, for the provision of administrative staff, office space and accounting, legal compliance, financial and information technology services. Under the terms of this agreement, we reimburse SSH for the reasonable direct or indirect expenses it incurs in providing us with the administrative services described above. SSH also arranges vessel sales and purchases for us. The services provided to us by SSH may be sub-contracted to other entities within the Scorpio Group. We have begun incurring costs to SSH which will increase as the vessels in our Newbuilding Program are delivered to us.

Pursuant to the Administrative Services Agreement, we will reimburse SSH for the reasonable direct or indirect expenses it incurs in providing us with the administrative services described above and a pro-rata portion of the salary incurred by SSH for an internal auditor. We will also pay SSH a fee for arranging vessel acquisitions, including newbuildings, payable in shares of our common stock. The number of shares to be issued was 31,250 shares for each of the first 17 vessels ordered under our Newbuilding Program. For the remaining newbuildings ordered, the number of shares for each vessel ordered was determined by dividing $250,000 by the market value of our common shares based on the volume weighted average price of our common shares over the 30 trading day period immediately preceding the contract date of a definitive agreement to acquire any vessel. For the 80 vessels in our Newbuilding Program, an aggregate of 2,168,741 shares will be issued to SSH, ranging from 25,497 shares to 31,250 shares for each vessel. These shares will be issued to SSH upon the delivery of each vessel. Of this total, we issued 52,394 shares of our common stock to SSH for the two vessels delivered to us in 2014. In addition, SSH has agreed with us not to own any drybulk carriers greater than 30,000 dwt for so long as the Administrative Services Agreement is in full force and effect. This agreement may be terminated by SSH after the third anniversary of our initial public offering upon 12 months’ notice or by us with 24 months’ notice.

During July 2013, we issued and sold 1,250,000 common shares to SSH for $10,000 as part of a series of Norwegian private transactions exempt from registration under the Securities Act. These common shares were subject to a contractual lock-up until July 2014. During November 2014, we issued and sold 4,000,000 shares to SSH for $15,000 as part of a private placement transaction.

Our vessels are commercially managed by Scorpio Commercial Management S.A.M. (“SCM”) and technically managed by SSM pursuant to a Master Agreement, which may be terminated by either party upon 24 months’ notice. SCM and SSM are companies affiliated with us. In addition, our Co-founder, Chairman and Chief Executive Officer, Emanuele Lauro, is a member of the Lolli-Ghetti family, which owns and controls SCM, our commercial manager, and SSM, our technical manager. We expect that additional vessels that we may acquire in the future will also be managed under the Master Agreement or on substantially similar terms.

SCM’s services include securing employment for our vessels in the spot market and on time charters. SCM also manages the Scorpio Group Pools (spot market-oriented vessel pools) which include Scorpio Ultramax Pool and the Scorpio Kamsarmax Pool and will manage the Scorpio Capesize Pool in which we expect our Newbuilding Program will be employed and in which our owned and time chartered-in vessels are employed.

Transactions with entities controlled by the Lolli-Ghetti family and with Scorpio Tankers (herein referred to as related party affiliates) in the consolidated statement of operations and balance sheet are as follows:

For the year ended December 31, 2014 and 2013,we had the following balances with related parties, which have been included in the consolidated statement of operations:

	For the year ended December 31,
	2014		2013
Vessel revenue
Scorpio Kamsarmax Pool (1)	$	34,986	$	—
Scorpio Ultramax Pool (1)	10,196		—
SCM (2)	31		—
Total vessel revenue	$	45,213	$	—
Vessel operating cost:
SSM (3)	$	122	$	—
General and administrative expense:
SCM (2)	148		—
SSM (3)	51		—
SSH (4)	56		—
SUK (5)	717		—
Total general and administrative expense	$	972	$	—

At December 31, 2014 and 2013, we had the following balances with related parties, which have been included in the consolidated balance sheets:

	As of		For the period from March 20, 2013 (date of inception) to
	December 31, 2014		December 31, 2013
Assets
Due from related parties-current:
Scorpio Kamsarmax Pool (1)	$	8,482	$	—
Scorpio Ultramax Pool (1)	2,460		—
Scorpio Tankers(6)	31,277		—
SSM (3)	154		—
Total due from related parties-current	$	42,373	$	—
Due from related parties non-current:
Scorpio Kamsarmax Pool (1)	$	3,272	$	—
Scorpio Ultramax Pool (1)	2,033		—
Total due from related parties non-current	$	5,305	$	—
Liabilities
Due to related parties-current:
SUK (5)	$	44	$	—
SSM (3)	1,131		—
SSH (4)	56		—
Total due from related parties-current	$	1,231	$	—

(1) During the year ended December 31, 2014, we earned $34,986 from chartering our owned and chartered-in vessels to the Scorpio Kamsarmax Pool and $10,196 from chartering our chartered-in vessels to the Scorpio Ultramax Pool. As of December 31, 2014, we have balances due from these charterers (primarily consisting of working capital, undistributed earnings and reimbursable costs) which have been classified as current assets of $8,482 and $2,460 from the Scorpio Kamsarmax Pool and the Scorpio Ultramax Pool, respectively. As of December 31, 2014, there were non-current balances due from these charterers which relate to working capital retained by the pools for member vessels that do not have provisions to exit the pool in the next 12 months of $3,272 and $2,033 for the Scorpio Kamsarmax Pool and Scorpio Ultramax pool, respectively.

The Scorpio Kamsarmax Pool and the Scorpio Ultramax Pool were significant customers for the year ended December 31, 2014, accounting 71.4%and 20.8% of our total vessel revenue, respectively.

(2) For commercial management of any of our vessels that does not operate in one of these pools, we will pay SCM a daily fee of $300 per vessel, plus a 1.75% commission on the gross revenues per charter fixture. Effective November 20, 2014, SCM has agreed to reduce the1.75% commission to 1.00% until the first day when the closing price of the Company’s common stock is not less than $9.75 per share, adjusted to include all authorized dividends paid on the Company’s share capital, at which time the commission will revert to 1.75%. The Scorpio Ultramax Pool and the Scorpio Kamsarmax Pool participants, including us and third-party owners of similar vessels, pay SCM a pool management fee of $300 per vessel per day, plus a 1.75% commission on the gross revenues per charter fixture. During the year ended December 31, 2014, we recorded $31 of vessel revenue relating to SCM, consisting of: (a) a $100 reduction in commissions charged to the Scorpio Group Pools pursuant to the decrease of commission SCM receives on gross freight from 1.75% to 1.00% effective November 20, 2014. SCM has agreed to refund to the Company $100 as a result of this reduced commission; partially offset by (b) $69 of commissions on the gross revenue of certain vessels time chartered-in for which their initial voyage took place before being admitted to the Scorpio Group Pools. In addition, the Company incurred $148 of general and administrative expenses to SCM consisting of a fee of $300 per vessel day for the periods in which our time chartered-in vessels were not operating in one of the pools and for fees charged to four time chartered-in vessels which were returned to their owners.

(3) SSM’s services include providing technical support, such as arranging the hiring of qualified officers and crew, supervising the maintenance and performance of vessels, purchasing supplies, spare parts and new equipment, arranging and supervising drydocking and repairs, and monitoring regulatory and classification society compliance and customer standards. We pay SSM an annual fee of $200,000 per vessel to provide technical management services for each of our vessels upon delivery. For the year ended December 31, 2014, we incurred a cost to SSM for technical support, which is a component of vessel operating costs, of $122, none of which is unpaid at December 31, 2014. For the year ended December 31, 2014, we incurred $51 of rent allocated from SSM. In addition, representatives of SSM, including certain subcontractors, provide us with construction supervisory services while our vessels are being constructed in shipyards. For these services, we will compensate SSM for its direct expenses, which can vary between $200,000 and $500,000 per vessel. In connection with supervision of 67 of the vessels in our Newbuilding Program, as of December 31, 2014, we incurred a cost to SSM of $29,000 per vessel. Of this aggregate cost of $1,943, $1,131 is unpaid as of December 31, 2014. We also advanced to SSM $154 as of December 31, 2014, relating to equipment to be placed on board certain of the Vessels under construction.

(4) We incur a fee to SSH of $300 per day for each owned vessel, which is included in general and administrative expenses, which aggregated $56 for the year ended December 31, 2014. As of December 31, 2014 this amount was unpaid.

(5) For the year December 31, 2014, SUK charged us $717 for allocated salaries of certain SUK employees relating to the services such employees performed for the Company, of which $44 was unpaid as of December 31, 2014.

(6) In December 31, 2014, we agreed to sell four LR2 tankers to Scorpio Tankers and granted Scorpio Tankers an option to purchase two additional LR2 tankers (see Note 7). Pursuant to this, we paid Scorpio Tankers $31,277 as a security deposit relating to estimated costs we would incur to the shipyard for converting the vessels from Capesize contracts to LR2 contracts and scheduled installments on vessels expected to occur prior to the closing date of the sale. This deposit is reimbursable to us upon closing.

XML

Earnings Per Common Share (Tables)

12 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The components of the denominator for the calculation of basic earnings per share and diluted earnings per share are as follows:

	For the year ended	Period from March 20, 2013 (date of inception) to
	December 31, 2014	December 31, 2013
Common shares outstanding basic:
Weighted average common shares outstanding basic	137,592,861	39,925,160
Common shares outstanding, diluted:
Weighted average common shares outstanding basic	137,592,861	39,925,160
Restricted stock awards	—	—
Weighted average common shares outstanding, diluted	137,592,861	39,925,160

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Assets Held for Sale (Details Textural) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2014
Loss on disposal of assets	$ 0	$ 55,487
Number of vessels held for sale		7
Assets held for sale	0	43,781
Kamsarmax Hull SS164 - TBN SBI Salsa [Member]
Number of vessels held for sale		1
Scorpio Tankers [Member]
Number of options granted to related party to Purchase LR2		2
Amount of LR Tankers Sold to Related Party		4
Capesize converted to LR2 Tankers [Member] | Scorpio Tankers [Member]
Sale price of each LR2 Newbuilding contract		51,000
Number of LR2 newbuilding contract		4
Fixed price option to exercise purchase of additional LR2 vessels [Member] | Capesize converted to LR2 Tankers [Member] | Scorpio Tankers [Member]
Sale price of each LR2 Newbuilding contract		52,500
Number of options granted to related party to Purchase LR2		2
Tsuneishi Group (Zhoushan) Shipbuilding Inc. [Member] | Kamsarmax Hull SS164 - TBN SBI Salsa [Member]
Sale Price Kamsarmax		$ 30,650
Capesize converted to LR2 Tankers [Member]
Number of vessels held for sale		6

XML

Earnings Per Common Share (Details)	0 Months Ended	3 Months Ended							9 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2013	Dec. 31, 2014
Weighted Average Number of Shares Outstanding, Basic [Abstract]
Weighted Average Number of Shares Outstanding, Basic	1,500		133,248,016	133,236,911	132,610,911	91,023,403	33,453,698	1,500	39,925,160	137,592,861
Weighted Average Number of Shares Outstanding, Diluted [Abstract]
Weighted Average Number of Shares Outstanding, Basic	1,500		133,248,016	133,236,911	132,610,911	91,023,403	33,453,698	1,500	39,925,160	137,592,861
Weighted Average Number of Shares, Restricted Stock									0	0
Weighted Average Number of Shares Outstanding, Diluted	1,500	151,119,957	133,248,016	133,236,911	132,910,911	91,023,403	33,453,698	1,500	39,925,160	137,592,861

XML

Consolidated Statements of Changes in Shareholders' Equity (USD $) In Thousands, except Share data, unless otherwise specified	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated deficit
Beginning Balance at Mar. 19, 2013	$ 0	$ 0	$ 0	$ 0
Beginning Balance (in shares) at Mar. 19, 2013		0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss) Attributable to Parent	(6,307)			(6,307)
Shares issued upon formation		1,500
Stock Issued During Period, Value, New Issues	282,881	313	282,568
Stock Issued During Period, Shares, New Issues		31,300,000
Norwegian Private Placements In Shares		97,240,411
Norwegian Private Placements	824,279	972	823,307
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures		4,862,020
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures	0	49	(49)
Share-based Compensation	3,359
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition	3,359
Additional Paid in Capital	1,109,185
Ending Balance at Dec. 31, 2013	1,104,212	1,334	1,109,185	(6,307)
Ending Balance (in Shares) at Dec. 31, 2013	133,403,931	133,403,931
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss) Attributable to Parent	(116,565)			(116,565)
Shares issued private placement		40,000,000
Stock issued during the period private placement	145,627	400	145,227
Stock Issued During Period, Value, New Issues	42,345	47	42,298
Stock Issued During Period, Shares, New Issues		4,695,000
Stock Issued During Period, Value, Issued for Services	500	1	499
Stock Issued During Period, Shares, Issued for Services		52,394
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures		2,148,370
Stock Issued During Period, Value, Restricted Stock Award, Net of Forfeitures	0	21	(21)
Share-based Compensation	23,869		23,869
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition	23,869
Additional Paid in Capital	1,321,057		1,321,057
Ending Balance at Dec. 31, 2014	$ 1,199,988	$ 1,803		$ (122,872)
Ending Balance (in Shares) at Dec. 31, 2014	180,299,695	180,299,695

XML

Earnings Per Common Share

12 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Earnings Per Common Share 

The computation of basic earnings per share is based on the weighted-average number of common shares issued and outstanding during the year, excluding unvested shares of restricted stock (see Note 11). The computation of diluted earnings per share assumes the lapsing of restrictions on unvested restricted stock awards, for which the assumed proceeds upon lapsing of restrictions are deemed to be the amount of compensation cost attributable to future services and not yet recognized using the treasury stock method, to the extent dilutive.

The components of the denominator for the calculation of basic earnings per share and diluted earnings per share are as follows:

	For the year ended	Period from March 20, 2013 (date of inception) to
	December 31, 2014	December 31, 2013
Common shares outstanding basic:
Weighted average common shares outstanding basic	137,592,861	39,925,160
Common shares outstanding, diluted:
Weighted average common shares outstanding basic	137,592,861	39,925,160
Restricted stock awards	—	—
Weighted average common shares outstanding, diluted	137,592,861	39,925,160

Due to the net loss realized for the year ended December 31, 2014, potentially dilutive restricted stock awards totaling 865,758 shares were determined to be anti-dilutive; accordingly, they are not taken into account for the calculation of earnings per share. Due to the net loss realized for the period from March 20, 2013 (date of inception) to December 31, 2013, potentially dilutive restricted stock awards totaling 373,046 shares were determined to be anti-dilutive; accordingly, they are not taken into account for the calculation of earnings per share.

XML

Equity Incentive Plan (Details Textual) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition		1 year 1 month
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		2,148,370	4,862,020
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period		30,000	0
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized		7,012,391
Restricted stock amortization	$ 3,359	$ 23,869
Restricted Stock [Member]
Allocated Share-based Compensation Expense		39,758
Restricted Stock [Member] | September 30, 2013 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		2,775,000
Fair Value of awards		26,918
Allocated Share-based Compensation Expense		14,292
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		3 years 0 months
Restricted Stock [Member] | November 6, 2013 [Member]
Fair Value of awards		13,289
Allocated Share-based Compensation Expense		7,770
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		3 years 0 months
Restricted Stock [Member] | December 17, 2013 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		707,020
Fair Value of awards		6,780
Allocated Share-based Compensation Expense		4,030
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		3 years 0 months
Restricted Stock [Member] | February 21, 2014 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		2,080,370
Fair Value of awards		19,410
Allocated Share-based Compensation Expense		13,222
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		3 years 0 months
Restricted Stock [Member] | May 20, 2014 [Member]
Fair Value of awards		590
Allocated Share-based Compensation Expense		$ 444
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		3 years 0 months
Share-based Compensation Award, Tranche One [Member] | Restricted Stock [Member] | September 30, 2013 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period		1,395,000
Balance - number of shares vesting in three equal installments		1,380,000
Share-based Compensation Award, Tranche One [Member] | Restricted Stock [Member] | November 6, 2013 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		1,380,000
Share-based Compensation Award, Tranche One [Member] | Restricted Stock [Member] | December 17, 2013 [Member]
Share based compensation shares vesting in three installments		617,020
Balance - number of shares vesting in three equal installments		90,000
Share-based Compensation Award, Tranche One [Member] | Restricted Stock [Member] | February 21, 2014 [Member]
Share based compensation shares vesting in three installments		1,990,370
Share-based Compensation Award, Tranche One [Member] | Restricted Stock [Member] | May 20, 2014 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		68,000

XML

Segments (Details) (USD $) In Thousands, unless otherwise specified	0 Months Ended	3 Months Ended							9 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2013	Dec. 31, 2014
Vessel Revenue	$ 0	$ 17,732	$ 12,608	$ 13,180	$ 5,467	$ 0	$ 0	$ 0	$ 0	$ 48,987
Voyage expenses									0	(3,579)
Vessel operating expenses										(1,600)
Charterhire expense									0	(73,214)
Depreciation and amortization									0	(686)
General and administrative expenses										(31,909)
Gain (Loss) on Disposition of Assets									0	(55,487)
Interest income									341	1,052
Foreign exchange loss									1,135	(43)
Financial expense									(8)	(172)
Net Income (Loss) Attributable to Parent	0	(71,998)	(18,909)	(15,002)	(10,656)	(3,569)	(2,737)	(1)	(6,307)	(116,565)
Capesize [Member]
Vessel Revenue										0
Voyage expenses										0
Vessel operating expenses										0
Charterhire expense										0
Depreciation and amortization										0
General and administrative expenses										(39)
Gain (Loss) on Disposition of Assets										(51,968)
Interest income										0
Foreign exchange loss										0
Financial expense										0
Net Income (Loss) Attributable to Parent										(52,007)
Kamsarmax
Vessel Revenue										38,770
Voyage expenses										(3,505)
Vessel operating expenses										(1,600)
Charterhire expense										(57,909)
Depreciation and amortization										(686)
General and administrative expenses										(251)
Gain (Loss) on Disposition of Assets										(2,934)
Interest income										0
Foreign exchange loss										0
Financial expense										0
Net Income (Loss) Attributable to Parent										(28,115)
Scorpio Ultramax Pool
Vessel Revenue										10,217
Voyage expenses										(74)
Vessel operating expenses										0
Charterhire expense										(15,305)
Depreciation and amortization										0
General and administrative expenses										(26)
Gain (Loss) on Disposition of Assets										0
Interest income										0
Foreign exchange loss										0
Financial expense										0
Net Income (Loss) Attributable to Parent										(5,188)
Corporate Segment [Member]
Vessel Revenue										0
Voyage expenses										0
Vessel operating expenses										0
Charterhire expense										0
Depreciation and amortization										0
General and administrative expenses										(31,593)
Gain (Loss) on Disposition of Assets										(585)
Interest income										1,052
Foreign exchange loss										(43)
Financial expense										(172)
Net Income (Loss) Attributable to Parent										$ (31,255)

XML

Vessels (Tables)

12 Months Ended

Dec. 31, 2014

Property, Plant and Equipment [Abstract]

Schedule of Vessels delivered

Owned vessels

Vessel Name	Year Built	DWT	Vessel Type
SBI Cakewalk	2014	82,000	Kamsarmax
SBI Charleston	2014	82,000	Kamsarmax
Total DWT		164,000

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Subsequent Events (Details Textual) (USD $)	3 Months Ended	0 Months Ended
	Mar. 31, 2015	Feb. 27, 2015	Jan. 15, 2015	Dec. 31, 2014	Mar. 04, 2015	Mar. 26, 2015	Jan. 30, 2015	Mar. 02, 2015
Number of vessels held for sale				7
Numbers of vessels owned				2
Purchase price paid for New Vessels				$ 848,526,000
Capesize converted to LR2 Tankers [Member]
Number of vessels held for sale				6
Subsequent Event [Member]
Proceeds from Bank Debt	106,388,000
Subsequent Event [Member] | Capesize [Member]
Number of vessels					3
Subsequent Event [Member] | Capesize converted to LR2 Tankers [Member]
Number of vessels					3
Subsequent Event [Member] | $26,000 Credit Facility [Member] | Capesize
Line of Credit Facility, Maximum Borrowing Capacity		26,000,000
Number of vessels		1
Months facility matures after the drawdown date		0 years 6 months
Subsequent Event [Member] | $411,264 Credit Facility | Capesize
Line of Credit Facility, Maximum Borrowing Capacity			411,264,000
Number of vessels			7
Portion of Facility fixed coupon rate	6.25%
Subsequent Event [Member] | $411,264 Credit Facility | Capesize converted to tankers [Member]
Number of vessels						5
Subsequent Event [Member] | $260,264 Credit Facility formerly the $411,264 Credit Facility [Member] | Capesize
Line of Credit Facility, Maximum Borrowing Capacity						240,264,000
Credit facility, Maximum borrowing capacity reduction						171,000,000
Subsequent Event [Member] | $42,000 Credit Facility | KamsarmaxMember | Imabari Shipbuilding Co., Ltd. [Member]
Line of Credit Facility, Maximum Borrowing Capacity							42,000,000
Numbers of vessels owned							1
Number of tranches	2
Maturity period of tranches	6 years
Subsequent Event [Member] | $19,800 Credit Facility [Member] | KamsarmaxMember | Tsuneishi Group (Zhoushan) Shipbuilding Inc. [Member]
Line of Credit Facility, Maximum Borrowing Capacity								19,800,000
Debt Instrument, Interest Rate, Effective Percentage Rate Range, Minimum	2.50%
Maturity period of tranches	10 years
Subsequent Event [Member] | $39,600 Credit Facility reduced to $19,800 Credit Facility [Member] [Member] | KamsarmaxMember | Tsuneishi Group (Zhoushan) Shipbuilding Inc. [Member]
Line of Credit Facility, Maximum Borrowing Capacity								39,600,000
Subsequent Event [Member] | $230,325 Credit Facility [Member] | Capesize [Member] | Shanghai Waigaoqiao Shipbuilding Co., Ltd. [Member]
Number of vessels								7
Subsequent Event [Member] | $230,325 Credit Facility [Member] | KamsarmaxMember | Tsuneishi Group (Zhoushan) Shipbuilding Inc. [Member]
Line of Credit Facility, Maximum Borrowing Capacity								230,325,000
Debt Instrument, Interest Rate, Effective Percentage Rate Range, Minimum		0.25%
Amount of days the facility matures, after the date insurance is approved	0 years 0 months 10 days
Subsequent Event [Member] | $234,900 Credit Facility previously announced reduced to $230,325 Credit Facility [Member] [Member] | KamsarmaxMember | Tsuneishi Group (Zhoushan) Shipbuilding Inc. [Member]
Line of Credit Facility, Maximum Borrowing Capacity								234,900,000
Minimum [Member] | Subsequent Event [Member] | $411,264 Credit Facility | Capesize [Member]
Maturity period of tranches			6 years 0 months
Maximum [Member] | Subsequent Event [Member] | $411,264 Credit Facility | Capesize [Member]
Maturity period of tranches			12 years
Q1-16 [Member] | Subsequent Event [Member] | Capesize [Member]
Number of vessels					2
Q1-16 [Member] | Subsequent Event [Member] | $19,800 Credit Facility [Member] | KamsarmaxMember | Tsuneishi Group (Zhoushan) Shipbuilding Inc. [Member]
Number of vessels								1
Q1-15 [Member] | Subsequent Event [Member] | $230,325 Credit Facility [Member] | Capesize [Member] | Shanghai Waigaoqiao Shipbuilding Co., Ltd. [Member]
Number of vessels								1
Q-1 2015 - Q-2 2016 [Member] | Subsequent Event [Member] | $230,325 Credit Facility [Member] | Capesize [Member] | Shanghai Waigaoqiao Shipbuilding Co., Ltd. [Member]
Number of vessels								6
Q2-16 [Member] | Subsequent Event [Member] | Capesize
Number of vessels					1
Q2-16 [Member] | Subsequent Event [Member] | Capesize converted to LR2 Tankers [Member]
Number of vessels					2
Q3-17 [Member] | Subsequent Event [Member] | LR1 Product Tankers [Member]
Number of vessels					1
Assets Held-for-sale [Member] | Subsequent Event [Member] | Capesize Vessels Converted to LR1 Tankers [Member]
Gain (Loss) on Contract Termination	23,000,000
Kamsarmax Hull SS164 - TBN SBI Salsa [Member]
Number of vessels held for sale				1
Capesize - Hull H1309 TBN SBI Puro | Subsequent Event [Member] | Capesize
Vessel Time Charter out per day rate	13,800
Capesize - Hull H1309 TBN SBI Puro | Minimum [Member] | Subsequent Event [Member] | Capesize
Vessel Charter out period	0 years 10 months
Capesize - Hull H1309 TBN SBI Puro | Maximum [Member] | Subsequent Event [Member] | Capesize
Vessel Charter out period	0 years 13 months
London Interbank Offered Rate (LIBOR) [Member] | Subsequent Event [Member] | $42,000 Credit Facility | KamsarmaxMember | Imabari Shipbuilding Co., Ltd. [Member]
Debt Instrument, Interest Rate, Effective Percentage Rate Range, Minimum	2.80%
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | Subsequent Event [Member] | $411,264 Credit Facility | Capesize
Debt Instrument, Interest Rate, Effective Percentage Rate Range, Minimum	1.90%
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | Subsequent Event [Member] | $230,325 Credit Facility [Member] | KamsarmaxMember | Tsuneishi Group (Zhoushan) Shipbuilding Inc. [Member]
Debt Instrument, Interest Rate, Effective Percentage Rate Range, Minimum		2.00%
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | Subsequent Event [Member] | $411,264 Credit Facility | Capesize
Debt Instrument, Interest Rate, Effective Percentage Rate Range, Minimum	2.95%
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | Subsequent Event [Member] | $230,325 Credit Facility [Member] | KamsarmaxMember | Tsuneishi Group (Zhoushan) Shipbuilding Inc. [Member]
Debt Instrument, Interest Rate, Effective Percentage Rate Range, Minimum		3.25%
JAPAN | 2014 [Member] | 10-Jan-15 [Member] | Subsequent Event [Member] | Panamax [Member]
Penalties incurred for early redelivery of vessel	375,000
Newbuilding Drybulk carriers [Member] | Subsequent Event [Member]
Purchase price paid for New Vessels	176,023,000
Assets Held-for-sale [Member] | Subsequent Event [Member]
Purchase price paid for New Vessels	$ 19,756,000

XML

General information and significant accounting policies (Details Textual) (USD $)	9 Months Ended	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2014
Period of time charter rates		5 years
Period of time charter rate, historical average used for impairment test		10 years
Other short-term highly liquid investments with original maturities of three months or less		0 years 3 months
Property, Plant and Equipment, Useful Life		25 years
Contracts to acquire New Vessels		71
Numbers of vessels owned		2
Amortization of deferred financing costs	$ 0	$ 150,000
Accumulated Amortization, Deferred Finance Costs		150,000
Duration of derivate not expected to be realized or settled and maturity duration of instrument to classify derivative as a non-current asset or non-current liability		0 years 12 months
Period used for estimated scrap value		4 years 0 months
Number of vessels held for sale		7
Asset Impairment Charges		0
Number of major customers		2
Number of financial institutions where cash and cash equivalents are maintained.		5
Cash, FDIC Insured Amount		$ 0
Minimum [Member]
Duration of planned major repairs and maintainence of vessel (in months)		0 years 30 months
Maximum [Member]
Duration of planned major repairs and maintainence of vessel (in months)		0 years 60 months
Kamsarmax Hull SS164 - TBN SBI Salsa [Member]
Number of vessels held for sale		1
Newbuilding Drybulk carriers [Member]
Minimum carrying capicity of vessels		30,000
Capesize converted to LR2 Tankers [Member]
Number of vessels held for sale		6
Year Built 2014 [Member] | Kamsarmax [Member]
Number of vessels owned		2
Kamsarmax pool [Member]
Concentration Risk, Customer		0.714
Ultramax pool [Member]
Concentration Risk, Customer		0.208

XML

General and Administrative Expenses

12 Months Ended

Dec. 31, 2014

Notes to Financial Statements

General and Administrative Expenses

General and Administrative Expenses

General and administrative expense was $30,937 and $5,505 for the year ended December 31, 2014 and for the period from March 20, 2013 (date of inception) to December 31, 2013, respectively. Such amount included $23,869 and $3,359 of restricted stock amortization (noncash) for the year ended December 31, 2014 and for the period from March 20, 2013 (date of inception) to December 31, 2013. The balance was primarily for payroll, directors’ fees, professional fees and insurance.