Transaction and Parties

Lender:                               Nautica Financial Services, or its assigns 
Borrower:  
Guarantor:                                    
Co-Guarantor:                 Insurance Company, with an investment rating of A+ or better.  The form and substance will be acceptable to Lessor in its sole discretion.  
Purpose:                           The proceeds shall be used to construct and acquire one (1) ___________l (Vessel”) to be constructed for Borrower by  ________ 
                                           (the “Ship Builder”) under a Vessel Construction Contract executed by Borrower and the Ship Builder (the “Vessel Construction
                                           Contract”). 
Financing Vehicle:        Construction Loan converting to Lease type financing 
Loan Amount:                100% of the amount necessary to build the vessel, in accordance with the construction contract:
                                          Vessel #1: $___________ (not to exceed cost to build vessel) 

Structure Fee:                Total Amount to be paid by Borrower, will not exceed 7% ($___________).  This will be applied toward Insurance and Syndication fees. 
                                          Collateral:  First Preferred Ship Mortgage on the vessels together with all present and future attachments, accessories, exchanges,                                                            replacement parts, repairs, and additions.  All collateral must be acceptable to Lender. 
Insurance:                      Borrower will be required to obtain a “Lenders Risk Policy”, that ensures payments are made to Lender.  The policy will remain in force for                                               the life of the loan (Construction and Lease).  The policy premium is included in the loan payment.

 Construction Loan:
The “Construction Period” commences on the date of the Loan Agreement. Lender or assigns will provide a construction loan during the Construction Period.  The loan made by Lender to Borrower during the Construction Period shall be referred to herein as the “Construction Loan" and shall bear interest and be payable in accordance with the terms set forth below:

Advance:                        Advances by Lender shall be made per the schedule of progress payments to be made by Borrower under the Vessel Construction Contract                                              upon the completion, satisfactory inspection and approval by Borrower and Lender, and invoicing by the Ship Builder at the completion of                                            each stage of the Vessel construction.  Lender will provide 100% construction financing in conjunction with the insurance guaranty. 
                                        Interest Rate:  Interest on the Construction Loan will be set at the time of closing, and is estimated to be 5.5%.           
​      
Collateral:                     The Construction Loan will be secured by a valid, first, senior and perfected (i) security interest in and assignment of all rights, title and                                               interest of the Borrower in the Vessel Construction Contract, all insurance now or hereafter in effect with respect to the Vessels, and the                                                 proceeds thereof, (ii) security interests and first preferred ship mortgages in and to the completed Vessel(s) together with all present and                                             future attachments, accessories, exchanges, replacement parts, repairs, and additions thereto, and cash and non-cash proceeds thereof. 

Lease Terms
Charterer:                   ________________________
Guarantor:                  Aon Plc. (NYSE – AON) or better rated insurance company.  The form and substance will be acceptable to Lessor in its sole                                                                           discretion.  AON will provide all risk coverage as well as an additional coverage to guaranty principle and interest to lender. 
Lender:                        To Be Named 
Intermediary:            To Be Named 
Structure:                  Charter with an end-of-term PUT/Balloon is at 50-62% of cost.  This amount is subject to an independent appraisal of the vessel                                                                for future value.  Upon mutual acceptance by Charterer and Lender, the Loan can be extended. 
Total Finance Amount:  Not to exceed the actual cost of the vessels       
Lease Term:                10-Years
Implicit Rate:            Currently __%                                                     
                                        
Index:  Rates will be fixed at the time of funding.  The rates and schedules are for Informational purposes only and are subject to change. Once all due diligence, credit/financial/documentation/legal and underwriting is complete, rates and structures will be fixed and will be presented in a final funding contract.   

Early Charter Termination Option:       The loan can be paid off early and requires 180-days prior written notice, Borrower can exercise the following option: At any point after 72-months during the loan, for a net present value of the remaining stream of payments including balloon discounted at 3.25%.

Costs: Out-of-pocket third-party costs to close this transaction will be borne by Lessee including (1) Cost of maritime counsel, (2) appraisal cost, (3) filing expenses (4) insurance underwriting expense and (5) Syndication/structure expense to be included in the blended rate.