Contract analysis

1. Negative Covenants (Article VII): Approximately 95 comments remain, principally addressing the permitted indebtedness baskets (Section 7.01), permitted liens (Section 7.02), restricted payments and dividend restrictions (Section 7.06), and vessel disposition rights (Section 7.04). These provisions represent the most heavily negotiated portion of the agreement, and we anticipate that resolution of the key commercia

2. Representations and Warranties (Article V): Approximately 42 comments, principally concerning the Material Adverse Change/Material Adverse Effect definition, the litigation disclosure threshold, the sanctions and compliance representations as applied to chartered vessels, and the scope of the vessel condition and classification representations.

3. Events of Default (Article VIII): Approximately 38 comments, including open points on grace and cure periods, the Borrower's request for a financial covenant equity cure right, the cross-default and judgment thresholds, the Change of Control trigger, and the treatment of vessel arrest or detention events.

4. Conditions Precedent (Article IV): Approximately 28 comments, principally regarding the appraisal dating requirement, the Borrower's objection to the newly introduced environmental due diligence condition, the representation bring-down standard for subsequent borrowings, and the treatment of the Harborstone payoff letter as a funding (rather than signing) condition.

5. Credits and Mechanics (Article II): Approximately 25 comments, with the most significant relating to mandatory prepayment triggers (asset sale proceeds and the newly introduced excess cash flow sweep), voluntary prepayment mechanics, notice periods, and commitment reduction minimums.

6. Definitions (Article I): Approximately 30 comments addressing key defined terms, including the Borrowing Base concept (which the Borrower objects to as inconsistent with the term sheet), Change of Control, Consolidated EBITDA add-backs, Defaulting Lender, Excluded Subsidiary, Material Adverse Change/Effect, Mortgaged Vessels, and Permitted Acquisitions.

7. Affirmative Covenants (Article VI): Approximately 22 comments, primarily concerning financial reporting timelines, collateral coverage ratio testing frequency and cure periods, insurance notice provisions, vessel earnings account requirements, and the after-acquired subsidiary guarantor covenant.

8. Administrative and Agency Provisions (Article IX): Approximately 12 comments relating to the exculpation standard, successor agent consent rights, and Collateral Agent instruction mechanics.

9. Miscellaneous Provisions (Article X): Approximately 16 comments, with the principal open issues concerning the assignment and participation provisions (particularly the Borrower's request for a disqualified institutions list), the amendment voting threshold for financial covenant modifications, expense and indemnification limitations, and confidentiality survival periods.

10. Schedules and Exhibits: Approximately 4 comments relating to the completion of pending disclosure schedules and the form of compliance certificate. We note that the following provisions are substantially agreed, subject to minor conforming edits that do not require further commercial discussion: • Financial Covenant Levels (Article VI): The Consolidated Net Leverage Ratio maintenance covenant of 4.50:1.00, steppi

ARTICLE I — DEFINITIONS AND INTERPRETATION

Section 1.01 — Defined Terms As used in this Agreement, the following terms shall have the meanings set forth below: "Adjusted Term SOFR" means, for any Interest Period, the per annum rate equal to (a) Term SOFR for such Interest Period, plus (b) the SOFR Adjustment; provided that if Adjusted Term SOFR as so determined shall ever be less than the Floor, then Adjusted Term SOFR shall be deemed to be the Floor for all

Section 1.02 — Interpretation; Rules of Construction (a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine, and neuter forms. The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation." The word "will" shall b

Section 1.03 — SOFR Provisions (a) Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Loan Document, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred prior to or on the Reference Time in respect of any setting of the then-current Benchmark, then the applicable Benchmark Replacement will replace such Benchmark for all purposes hereunder and un

Section 2.01 — Revolving Commitments Subject to the terms and conditions set forth herein, each Lender severally agrees to make revolving loans (each, a "Revolving Loan" and collectively, "Revolving Loans") to the Borrower from time to time during the Availability Period in an aggregate principal amount at any time outstanding not to exceed such Lender's Commitment. During the Availability Period, the Borrower may bo

Section 2.02 — Borrowings; Conversion and Continuation of Loans (a) Each Revolving Borrowing, each conversion of Revolving Loans from one Type to the other, and each continuation of SOFR Loans shall be made upon the Borrower's irrevocable notice to the Administrative Agent, which may be given by (i) telephone or (ii) a Borrowing Request; provided that any telephonic notice must be confirmed promptly by delivery to th

Section 2.03 — Letters of Credit (a) LC Sublimit. Subject to the terms and conditions set forth herein, Meridian Atlantic Bank, National Association, in its capacity as LC Issuer, agrees to issue standby and commercial letters of credit (each, a "Letter of Credit") for the account of the Borrower from time to time during the Availability Period in an aggregate face amount at any time outstanding not to exceed the LC

Section 2.04 — Swingline Loans Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make swingline loans (each, a "Swingline Loan") to the Borrower from time to time during the Availability Period in an aggregate principal amount at any time outstanding not to exceed the Swingline Sublimit ($15,000,000). > C&H Comment [28]: Agreed. Minor drafting comments only. Please confirm that Meri

Section 2.05 — Prepayments (a) Voluntary Prepayments. The Borrower may, upon notice to the Administrative Agent, at any time and from time to time prepay any Borrowing of Revolving Loans in whole or in part, without premium or penalty (other than breakage costs under Section 3.04). Each voluntary prepayment of SOFR Loans shall be in a minimum principal amount of $2,500,000. Each voluntary prepayment of Base Rate Loan

Section 2.06 — Reduction and Termination of Commitments (a) The Borrower may, upon notice to the Administrative Agent, at any time and from time to time terminate in whole or reduce in part the unutilized portion of the Total Commitments; provided that (i) each partial reduction shall be in a minimum aggregate amount of and integral multiples of in excess thereof, and (ii) the Total Commitments shall not be reduced t

Section 2.07 — Repayment of Loans The Borrower shall repay to the Lenders on the Maturity Date the aggregate principal amount of all Revolving Loans outstanding on such date. The "Maturity Date" shall be the date that is five (5) years after the Closing Date. > C&H Comment [32]: Agreed. No open comment.

Section 2.08 — Interest (a) Each SOFR Loan shall bear interest for each Interest Period at a rate per annum equal to the Adjusted Term SOFR for such Interest Period plus the Applicable Margin. (b) Each Base Rate Loan shall bear interest at a rate per annum equal to the Base Rate plus the Applicable Margin. (c) Default Interest. , all outstanding Obligations (including, without limitation, overdue principal, interest,

Section 2.09 — Fees (a) Commitment Fee. The Borrower agrees to pay to the Administrative Agent, for the account of each Lender, a commitment fee (the "Commitment Fee") equal to the Commitment Fee Rate multiplied by the average daily amount of the of such Lender during the period from and including the Closing Date to but excluding the date on which such Lender's Commitment terminates. Accrued Commitment Fees shall be

Section 2.10 — Computation of Interest and Fees All computations of interest and 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) elapsed. > C&H Comment [35]: Agreed. No open comment.

Section 2.11 — Payments Generally All payments to be made by the Borrower hereunder or under any other Loan Document shall be made in Dollars and in immediately available funds, without set-off, counterclaim, or deduction of any kind, to the Administrative Agent at its office at 600 Lexington Avenue, 38th Floor, New York, NY 10022 (or such other office as the Administrative Agent may designate in writing to the Borro

Section 2.12 — Sharing of Payments If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Revolving Loans or participations in LC Obligations or Swingline Loans resulting in such Lender's receiving payment of a greater proportion of the aggregate unpaid principal and interest then due and owing to such Lender than t

ARTICLE III — TAXES; YIELD PROTECTION; ILLEGALITY

Section 3.01 — Taxes (a) Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrower or any Guarantor under any Loan Document shall be made free and clear of and without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law requires the deduction or withholding of any Tax from any such payment, then (i) the sum payable by the Borrower o

Section 3.02 — Illegality If any Lender determines that any law has made it unlawful, or that any governmental authority has asserted that it is unlawful, for any Lender or its applicable lending office to make, maintain, or fund SOFR Loans, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, any obligation of such Lender to make or continue SOFR Loans or to convert Base Rate Loan

Section 3.03 — Inability to Determine Rates If the Administrative Agent determines that for any reason adequate and reasonable means do not exist for determining Adjusted Term SOFR for any requested Interest Period, the Administrative Agent will promptly so notify the Borrower and each Lender, and the Benchmark Replacement provisions of Section 1.03 shall apply. > C&H Comment [41]: Cross-reference to Section 1.03. Su

Section 3.04 — Increased Costs (a) If any Change in Law shall (i) impose, modify, or deem applicable any reserve, special deposit, compulsory loan, insurance charge, or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender, (ii) subject any Lender to any Tax (other than Excluded Taxes) with respect to this Agreement or any Loan, or (iii) impos

Section 3.05 — Mitigation Each Lender shall use reasonable efforts (consistent with legal and regulatory restrictions) to designate a different applicable lending office if such designation would avoid or reduce amounts payable under Section 3.01 or Section 3.04, and would not, in such Lender's sole reasonable judgment, be otherwise disadvantageous to such Lender. > C&H Comment [43]: Agreed. No open comment.

ARTICLE IV — CONDITIONS PRECEDENT

Section 4.01 — Conditions to Closing and Initial Borrowing The obligation of the Lenders to make the initial Revolving Loan hereunder (and the obligation of the LC Issuer to issue the initial Letter of Credit hereunder) is subject to the satisfaction (or waiver in writing by the Administrative Agent, acting on the instructions of the Required Lenders) of each of the following conditions: (a) Credit Agreement and Loan