scc Doc 282 Filed 08/15/17 Entered 08/15/17 19:01:47 Main Document Pg 1 of 88

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1 Pg 1 of 88 Albert Togut Frank A. Oswald Brian F. Moore Kyle J. Ortiz TOGUT SEGAL & SEGAL LLP One Penn Plaza New York, New York (212) Counsel for the Debtors and Debtors-in-Possession UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK x : In re: : Chapter 11 : TOISA LIMITED, et al., : Case No (SCC) : : Debtors. 1 : (Jointly Administered) : x DISCLOSURE STATEMENT FOR THE JOINT PLAN OF REORGANIZATION FOR TOISA LIMITED AND CERTAIN OF ITS AFFILIATES PURSUANT TO CHAPTER 11 OF THE BANKRUPTCY CODE Dated: August 15, 2017 New York, NY THIS PROPOSED DISCLOSURE STATEMENT HAS NOT BEEN APPROVED BY THE BANKRUPTCY COURT AS CONTAINING ADEQUATE INFORMATION WITHIN THE MEANING OF BANKRUPTCY CODE SECTION 1125(a). THIS IS NOT A SOLICITATION OF ACCEPTANCE OR REJECTION OF THE PLAN. ACCEPTANCES OR REJECTIONS WILL NOT BE SOLICITED UNTIL THE BANKRUPTCY COURT HAS APPROVED THIS PROPOSED DISCLOSURE STATEMENT. THE DEBTORS RESERVE THE RIGHT TO AMEND OR SUPPLEMENT THIS PROPOSED DISCLOSURE STATEMENT AT OR BEFORE THE HEARING TO CONSIDER THIS PROPOSED DISCLOSURE STATEMENT. 1 The Debtors are as follows: Trade Prosperity, Inc.; Toisa Limited; United Courage, Inc.; Trade Vision, Inc.; United Journey, Inc.; United Kalavryta, Inc.; Trade Sky, Inc.; Trade Industrial Development Corporation; United Honor, Inc.; Trade Will, Inc.; United Leadership Inc.; United Seas, Inc.; United Dynamic, Inc.; United Emblem, Inc.; United Ideal Inc.; Trade Unity, Inc.; Trade Quest, Inc.; Trade Spirit, Inc.; Trade Resource, Inc.; United Ambassador, Inc.; Edgewater Offshore Shipping, Ltd.; United Banner, Inc.; Toisa Horizon, Inc.; and Trade and Transport Inc.

2 Pg 2 of 88 INTRODUCTION AND DISCLAIMER Toisa Limited ( Toisa ) and certain of its affiliates (collectively, the Debtors ) submit this Disclosure Statement to holders of claims entitled to vote on the Joint Plan of Reorganization of Toisa Limited and Certain of Its Affiliates Pursuant to Chapter 11 of the Bankruptcy Code, dated as of August 15, 2017, a copy of which is annexed hereto as Appendix A (the Plan ). 2 The Disclosure Statement is to be used by each such person solely in connection with its evaluation of the Plan. Use of this Disclosure Statement for any other purpose is not authorized. No assertion of fact or conclusion of law contained herein shall be binding on any party other than the Debtors. THE TABLE SET FORTH BELOW SUMMARIZES THE CLASSIFICATION AND TREATMENT OF ALL CLAIMS AGAINST AND INTERESTS IN THE DEBTORS. FOR A COMPLETE UNDERSTANDING OF THE PLAN, YOU SHOULD READ THIS DISCLOSURE STATEMENT, THE PLAN, AND THE APPENDICES AND EXHIBITS THERETO IN THEIR ENTIRETY. IN THE EVENT OF ANY INCONSISTENCY BETWEEN THE PLAN AND THIS DISCLOSURE STATEMENT, THE TERMS OF THE PLAN ARE CONTROLLING. Description And Amount Of Claims Or Interests Summary Of Treatment Estimated Recovery Entitled to Vote Administrative Claims Priority Tax Claims (Estimated Allowed Amount: $0) An Administrative Claim is a claim for costs and expenses of administration of the Chapter 11 Cases, including Professional Fee Claims (as defined in the Plan). Except as otherwise expressly provided for in the Plan, all Allowed Administrative Claims will be paid in full in cash on the Effective Date of the Plan. However, any Allowed Administrative Claim based on a liability incurred by a Debtor in the ordinary course of business during the Chapter 11 Cases may be paid in the ordinary course of business in accordance with the terms and conditions of any agreement or customary payment terms, and Professional Fee Claims will be paid in accordance with an order of the Bankruptcy Court permitting such payment. An Allowed Priority Tax Claim is a claim of a governmental unit for taxes accorded priority in right of payment under section 507(a)(8) of the Bankruptcy Code. To the extent any such Claim is not so paid, then on the Effective Date, each holder of an Allowed Priority Tax Claim shall have its claim reinstated, which means that such holder's legal, equitable and contractual rights with respect to its Priority Tax Claim will be left unaltered and paid in the ordinary course, unless such holder and the Debtors agree to different treatment or as otherwise permitted under Section 1129(a)(9) of the Bankruptcy Code. 100% N/A 100% N/A 2 All capitalized terms not otherwise defined in this Disclosure Statement have the meanings ascribed to such terms in the Plan. i

3 Pg 3 of 88 Class 1 Other Priority Claims (Estimated Allowed Amount: $0) Class 2 Existing Citi Tanker Credit Facility Claims (Estimated Allowed Amount: $46,094,548) Class 3 Existing Commerzbank I Credit Facility Claims (Estimated Allowed Amount: $53,237,261) An Other Priority Claim is a claim accorded priority in right of payment under section 507(a) of the Bankruptcy Code, such as claims for wages and related matters. The Debtors do not believe they have any such claims. To the extent any such claim is not paid in the ordinary course, without interruption, then as soon as reasonably practicable after the Effective Date, each holder of an Allowed Other Priority Claim will be paid in full in cash. On, or as soon as reasonably practicable after, the Effective Date, each holder of an Allowed Class 2 Citi Tanker Credit Facility Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such claims, its pro rata share of the loans under the Amended and Restated Citi Tanker Credit Facility, in addition to any terms of treatment that the Court orders. Under the Amended and Restated Citi Tanker Credit Facility the balances and interest rates under the Amended and Restated Citi Tanker Credit Facility will remain unchanged from those in effect under the Existing Citi Tanker Credit Facility; however, the maturity shall be extended to five (5) years from the Effective Date; interest is to be paid by the earnings from the Citi Tanker Vessels, and pooled to pay interest deficiencies, if any relating to the Amended and Restated Oceangoing Facilities. 50% of any excess cash flow shall be swept on a quarterly basis to repay principal on the Amended and Restated Citi Tanker Credit Facility subject to a consolidated cash balance at Reorganized Trade and Transport Enterprise in excess of the Oceangoing Minimum Working Capital amount. Such cash flow sweep shall replace the prepetition amortization schedule. On, or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Class 3 Existing Commerzbank I Credit Facility Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such claims, its pro rata share of the loans under the Amended and Restated Commerzbank I Credit Facility, in addition to any terms of treatment that the Court orders. Under the Amended and Restated Commerzbank I Credit Facility the balances and interest rates under the Amended and Restated Commerzbank I Credit Facility will remain unchanged from those in effect under the Existing Commerzbank I Credit Facility; however, the maturity shall be extended to five (5) years from the Effective Date; interest is to be paid by the earnings from the Commerzbank I Vessels, and pooled to pay interest deficiencies, if any relating to the Amended and Restated Oceangoing Facilities. 50% of any excess cash flow shall be swept on a quarterly basis to repay principal on the Amended and Restated Commerzbank I Credit Facility subject to a consolidated cash balance 100% N/A 100% Yes 100% Yes ii

4 Pg 4 of 88 at Reorganized Trade and Transport Enterprise in excess of the Oceangoing Minimum Working Capital amount. Such cash flow sweep shall replace the prepetition amortization schedule. Class 4 Existing Commerzbank II Credit Facility Claims (Estimated Allowed Amount: $25,609,035) On, or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Class 4 Existing Commerzbank II Credit Facility Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such claims, its pro rata share of the loans under the Amended and Restated Commerzbank II Credit Facility, in addition to any terms of treatment that the Court orders. Under the Amended and Restated Commerzbank II Credit Facility the balances and interest rates under the Amended and Restated Commerzbank II Credit Facility will remain unchanged from those in effect under the Existing Commerzbank II Credit Facility; however, the maturity shall be extended to five (5) years from the Effective Date; interest is to be paid by the earnings from the Commerzbank II Vessels, and pooled to pay interest deficiencies, if any relating to the Amended and Restated Oceangoing Facilities. 50% of any excess cash flow shall be swept on a quarterly basis to repay principal on the Amended and Restated Commerzbank II Credit Facility subject to a consolidated cash balance at Reorganized Trade and Transport Enterprise in excess of the Oceangoing Minimum Working Capital amount. Such cash flow sweep shall replace the prepetition amortization schedule. 100% Yes Class 5 Existing Credit Agricole Tanker Credit Facility Claims (Estimated Allowed Amount: $25,976,000) On, or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Class 5 Credit Agricole Tanker Credit Facility Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such claims, its pro rata share of the loans under the Amended and Restated Credit Agricole Tanker Credit Facility, in addition to any terms of treatment that the Court orders. Under the Amended and Restated Credit Agricole Tanker Credit Facility the balances and interest rates under the Amended and Restated Credit Agricole Tanker Credit Facility will remain unchanged from those in effect under the Existing Credit Agricole Tanker Credit Facility; however, the maturity shall be extended to five (5) years from the Effective Date; interest is to be paid by the earnings from the Credit Agricole Tanker Vessels, and pooled to pay interest deficiencies, if any relating to the Amended and Restated Oceangoing Facilities. 50% of any excess cash flow shall be swept on a quarterly basis to repay principal on the Amended and Restated Credit Agricole Tanker Credit Facility subject to a consolidated cash balance at Reorganized Trade and Transport Enterprise 100% Yes iii

5 Pg 5 of 88 in excess of the Oceangoing Minimum Working Capital amount. Such cash flow sweep shall replace the prepetition amortization schedule. Class 6 Existing Danish Ship Bulker Credit Facility Claims (Estimated Allowed Amount: $22,000,000) Class 7 Existing Danish Ship Tanker Credit Facility Claims (Estimated Allowed Amount: $35,285,720) On, or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Class 6 Danish Ship Bulker Credit Facility Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such claims, its pro rata share of the loans under the Amended and Restated Danish Ship Bulker Credit Facility, in addition to any terms of treatment that the Court orders. Under the Amended and Restated Danish Ship Bulker Credit Facility the balances and interest rates under the Amended and Restated Danish Ship Bulker Credit Facility will remain unchanged from those in effect under the Existing Danish Ship Bulker Credit Facility; however, the maturity shall be extended to five (5) years from the Effective Date; interest is to be paid by the earnings from the Danish Ship Bulker Vessels, and pooled to pay interest deficiencies, if any relating to the Amended and Restated Oceangoing Facilities. 50% of any excess cash flow shall be swept on a quarterly basis to repay principal on the Amended and Restated Danish Ship Bulker Credit Facility subject to a consolidated cash balance at Reorganized Trade and Transport Enterprise in excess of the Oceangoing Minimum Working Capital amount. Such cash flow sweep shall replace the prepetition amortization schedule. On, or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Class 7 Existing Danish Ship Tanker Credit Facility Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such claims, its pro rata share of the loans under the Amended and Restated Danish Ship Tanker Credit Facility, in addition to any terms of treatment that the Court orders. Under the Amended and Restated Danish Ship Tanker Credit Facility the balances and interest rates under the Amended and Restated Danish Ship Tanker Credit Facility will remain unchanged from those in effect under the Existing Danish Ship Tanker Credit Facility; however, the maturity shall be extended to five (5) years from the Effective Date; interest is to be paid by the earnings from the Danish Ship Tanker Vessels, and pooled to pay interest deficiencies, if any relating to the Amended and Restated Oceangoing Facilities. 50% of any excess cash flow shall be swept on a quarterly basis to repay principal on the Amended and Restated Danish Ship Tanker Credit Facility subject to a consolidated cash balance at Reorganized Trade and Transport Enterprise in excess of the Oceangoing Minimum Working Capital amount. Such cash flow 100% Yes 100% Yes iv

6 Pg 6 of 88 sweep shall replace the prepetition amortization schedule. Class 8 Existing DNB Tanker Credit Facility Claims (Estimated Allowed Amount: $110,703,990) Class 9 Existing ING Bulker Credit Facility Claims (Estimated Allowed Amount: $72,265,104) On, or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Class 8 DNB Tanker Credit Facility Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such claims, its pro rata share of the loans under the Amended and Restated DNB Tanker Credit Facility, in addition to any terms of treatment that the Court orders. Under the Amended and Restated DNB Tanker Credit Facility the balances and interest rates under the Amended and Restated DNB Tanker Credit Facility will remain unchanged from those in effect under the Existing DNB Tanker Credit Facility; however, the maturity shall be extended to five (5) years from the Effective Date; interest is to be paid by the earnings from the DNB Tanker Vessels, and pooled to pay interest deficiencies, if any relating to the Amended and Restated Oceangoing Facilities. 50% of any excess cash flow shall be swept on a quarterly basis to repay principal on the Amended and Restated DNB Tanker Credit Facility subject to a consolidated cash balance at Reorganized Trade and Transport Enterprise in excess of the Oceangoing Minimum Working Capital amount. Such cash flow sweep shall replace the prepetition amortization schedule. On, or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Class 9 Existing ING Bulker Credit Facility Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such claims, its pro rata share of the loans under the Amended and Restated ING Bulker Credit Facility, in addition to any terms of treatment that the Court orders. Under the Amended and Restated ING Bulker Credit Facility the balances and interest rates under the Amended and Restated ING Bulker Credit Facility will remain unchanged from those in effect under the Existing ING Bulker Credit Facility; however, the maturity shall be extended to five (5) years from the Effective Date; interest is to be paid by the earnings from the ING Bulker Vessels, and pooled to pay interest deficiencies, if any relating to the Amended and Restated Oceangoing Facilities. 50% of any excess cash flow shall be swept on a quarterly basis to repay principal on the Amended and Restated ING Bulker Credit Facility subject to a consolidated cash balance at Reorganized Trade and Transport Enterprise in excess of the Oceangoing Minimum Working Capital amount. Such cash flow sweep shall replace the prepetition amortization schedule. 100% Yes 100% Yes v

7 Pg 7 of 88 Class 10 Existing NBG Credit Facility Claims (Estimated Allowed Amount: $29,925,000) Class 11 Existing Newbuild Tanker Credit Facility Claims (Estimated Allowed Amount: $24,034,500) On, or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Class 10 NBG Existing Credit Facility Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such claims, its pro rata share of the loans under the Amended and Restated NBG Credit Facility, in addition to any terms of treatment that the Court orders. Under the Amended and Restated NBG Credit Facility the balances and interest rates under the Amended and Restated NBG Credit Facility will remain unchanged from those in effect under the Existing NBG Credit Facility; however, the maturity shall be extended to five (5) years from the Effective Date; interest is to be paid by the earnings from the NBG Vessels, and pooled to pay interest deficiencies, if any relating to the Amended and Restated Oceangoing Facilities. 50% of any excess cash flow shall be swept on a quarterly basis to repay principal on the Amended and Restated NBG Credit Facility subject to a consolidated cash balance at Reorganized Trade and Transport Enterprise in excess of the Oceangoing Minimum Working Capital amount. Such cash flow sweep shall replace the prepetition amortization schedule. On, or as soon as reasonably practicable after, the Effective Date and the closing of the Newbuild Tanker Sale Transaction, each Holder of an Allowed Class 11 Newbuild Tanker Credit Facility Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such claims, the treatment provided for in the Newbuild Tanker Purchase Agreement. 100% Yes 100% Yes Class 12 Existing DVB Credit Facility Claims (Estimated Allowed Amount: $73,978,000) On, or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Class 12 DVB Credit Facility Claims shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for such Claims its pro rata share of the loans under the Amended and Restated DVB Credit Facility. Under the Amended and Restated DVB Credit Facility the balances and interest rates under the Amended and Restated DVB Credit Facility will remain unchanged from those in effect under the Existing DVB Credit Facility; however, the maturity shall be extended to five (5) years from the Effective Date and interest shall be paid in Cash at the rate of Libor+25bps (the Cash Rate ) with the remaining interest paid as PIK Interest in an amount equal to the interest rate under the Existing DVB Credit Facility minus the Cash Rate. Any earnings from DVB Credit Facility Vessels in excess of the Cash Rate shall be pooled to pay interest deficiencies, if any, relating to the Amended and Restated Offshore Facilities. 50% of any excess cash flow after payment of interest deficiencies shall be 100% Yes vi

8 Pg 8 of 88 swept on a quarterly basis to repay principal on the Amended and Restated DVB Credit Facility subject to a consolidated cash balance at Reorganized Toisa in excess of the Offshore Minimum Working Capital amount. Such cash flow sweep shall replace the prepetition amortization schedule. Class 13 Existing Citizens I Credit Facility Claims (Estimated Allowed Amount: $12,260,000) On, or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Class 13 Existing Citizens I Credit Facility Secured Claims shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for such Claims, its pro rata share of the loans under the Amended and Restated Citizens I Credit Facility, in addition to any terms of treatment that the Court orders. Under the Amended and Restated Offshore Credit Facilities the balances and interest rates under the Amended and Restated Offshore Credit Facilities will remain unchanged from those in effect under the Existing Offshore Credit Facilities; however, the maturity shall be extended to five (5) years from the Effective Date and interest shall be paid in Cash at the Cash Rate (as defined in section 3.3(n) below) with the remaining interest paid as PIK Interest in an amount equal to the interest rate under the applicable Existing Offshore Credit Facility minus the Cash Rate. Any earnings from Citizens I Credit Facility Vessels in excess of the Cash Rate shall be pooled to pay interest deficiencies, if any, relating to the Amended and Restated Offshore Facilities. 50% of any excess cash flow after payment of interest deficiencies shall be swept on a quarterly basis to repay principal on the Amended and Restated Citizens I Credit Facility subject to a consolidated cash balance at Reorganized Toisa in excess of the Offshore Minimum Working Capital amount. Such cash flow sweep shall replace the prepetition amortization schedule. 100% Yes Class 14 Toisa Offshore Secured Claims (Estimated Allowed Amount: $289,893,258) On, or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Class 14 Toisa Offshore Secured Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for such Claims its pro rata share of the loans under such Holder s applicable Amended and Restated Offshore Credit Facility. Under the Amended and Restated Offshore Credit Facilities, the balances and interest rates under the Amended and Restated Offshore Credit Facilities will remain unchanged from those in effect under the Existing Offshore Credit Facilities; however, the maturity shall be extended to five (5) years from the Effective Date and interest shall be paid in Cash at the Cash Rate with the remaining interest paid as PIK Interest in an amount equal to the 100% Yes vii

9 Pg 9 of 88 interest rate under the applicable Existing Offshore Credit Facility minus the Cash Rate. Any earnings from Offshore Credit Facility Vessels in excess of the Cash Rate interest payable under the corresponding Offshore Credit Facility shall be pooled to pay interest deficiencies, if any, relating to the Amended and Restated Offshore Facilities. 50% of any excess cash flow from Offshore Credit Facility Vessels after payment of pooled interest deficiencies shall be swept on a quarterly basis to repay principal on the corresponding Amended and Restated Offshore Credit Facility subject to a consolidated cash balance at Reorganized Toisa in excess of the Offshore Minimum Working Capital amount. Such cash flow sweeps shall replace the prepetition amortization schedule. Class 15 G550 Airplane Credit Facility Claims (Estimated Allowed Amount: $17,139,881) On, or as soon as reasonably practicable after, the Effective Date, each G550 Airplane Credit Facility Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such claims, its pro rata share of the loans under the Reinstated G550 Airplane Credit Facility, in addition to any terms of treatment that the Court orders. 100% No Class 16 T&T General Unsecured Claims (Estimated Allowed Amount: $0) Within ninety (90) days after the Effective Date or, if such T&T General Unsecured Claim becomes Allowed after the Effective Date, as soon as reasonably practicable after the date at which such General Unsecured Claim becomes Allowed, each Holder of an Allowed Class 16 T&T General Unsecured Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such Claim, payment in Cash of the full amount of such Allowed T&T General Unsecured Claims. 100% No Class 17 Toisa General Unsecured Claims (Estimated Allowed Amount: $0) Within ninety (90) days after the Effective Date or, if such Toisa General Unsecured Claim becomes Allowed after the Effective Date, as soon as reasonably practicable after the date at which such General Unsecured Claim becomes Allowed, each Holder of an Allowed Class 17 Toisa General Unsecured Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such Claim, payment in Cash of the full amount of such Allowed Toisa General Unsecured Claims. 100% No Class 18 Intercompany Claims (Estimated Allowed Amount: TBD) On or prior to the Effective Date, all Class 18 Intercompany Claims shall be reinstated. 100% No viii

10 Pg 10 of 88 Class 19 Interests in Toisa On the Effective Date, all Class 19 Interests shall be reinstated. 100% No Class 20 Intercompany Interests in Other Debtors Except as otherwise provided herein or in the Oceangoing Equity Purchase Agreement, on or prior to the Effective Date, all Class 20 Intercompany Interests in Other Debtors shall be reinstated. 100% No THE DEBTORS HAVE PREPARED THIS PROPOSED DISCLOSURE STATEMENT PURSUANT TO BANKRUPTCY CODE SECTION 1125 FOR USE IN THE SOLICITATION OF VOTES ON THE PLAN. FOR A COMPLETE UNDERSTANDING OF THE PLAN, YOU SHOULD READ THIS DISCLOSURE STATEMENT, INCLUDING SECTION V RISK FACTORS TO BE CONSIDERED, THE PLAN, AND THE APPENDICES AND EXHIBITS HERETO AND THERETO IN THEIR ENTIRETY. IN THE EVENT OF ANY INCONSISTENCY BETWEEN THE PLAN AND THIS DISCLOSURE STATEMENT, THE TERMS OF THE PLAN ARE CONTROLLING. THE CONFIRMATION AND EFFECTIVENESS OF THE PLAN ARE SUBJECT TO THE SATISFACTION OR WAIVER OF MATERIAL CONDITIONS PRECEDENT. THERE CAN BE NO ASSURANCE THAT THOSE CONDITIONS PRECEDENT WILL BE SATISFIED. THE DEBTORS CURRENTLY INTEND TO SEEK TO EFFECTUATE THE PLAN PROMPTLY AFTER CONFIRMATION OF THE PLAN. THERE CAN BE NO ASSURANCE, HOWEVER, AS TO WHEN AND WHETHER CONFIRMATION OF THE PLAN AND THE EFFECTIVE DATE ACTUALLY WILL OCCUR. PROCEDURES FOR DISTRIBUTIONS UNDER THE PLAN, INCLUDING MATTERS THAT ARE EXPECTED TO AFFECT (A) THE TIMING OF THE RECEIPT OF DISTRIBUTIONS BY HOLDERS OF CLAIMS IN CERTAIN CLASSES AND (B) THE AMOUNT OF DISTRIBUTIONS ULTIMATELY RECEIVED BY SUCH HOLDERS ARE DESCRIBED IN SECTION IV SUMMARY OF THE PLAN OF REORGANIZATION. IF THE PLAN IS NOT CONFIRMED AND/OR EFFECTUATED, THEN THE DEBTORS WILL HAVE TO CONSIDER ALL OF THEIR OPTIONS AS DEBTORS IN BANKRUPTCY. NO PERSON IS AUTHORIZED BY THE DEBTORS IN CONNECTION WITH THE PLAN OR THE SOLICITATION TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION REGARDING THIS DISCLOSURE STATEMENT OR THE PLAN OTHER THAN AS CONTAINED IN THIS DISCLOSURE STATEMENT AND THE APPENDICES ATTACHED HERETO OR INCORPORATED HEREIN BY REFERENCE OR REFERRED TO HEREIN. IF SUCH INFORMATION OR REPRESENTATION IS GIVEN OR MADE, IT MAY NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE DEBTORS. THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE LEGAL, BUSINESS, FINANCIAL, OR TAX ADVICE. ANY CREDITOR OR INTEREST HOLDER DESIRING ANY SUCH ADVICE OR ANY OTHER ADVICE SHOULD CONSULT WITH ITS OWN ADVISORS. THE INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT, INCLUDING THE INFORMATION REGARDING THE DEBTORS HISTORY, BUSINESS, AND OPERATIONS, IS INCLUDED FOR PURPOSES OF SOLICITING ACCEPTANCES OF THE PLAN BUT, AS TO CONTESTED MATTERS AND ADVERSARY PROCEEDINGS THAT MAY BE PENDING AS OF THE FILING OF THE DEBTORS CHAPTER 11 CASES OR COMMENCED AFTER THE FILING OF THE DEBTORS CHAPTER 11 CASES, IS NOT TO BE CONSTRUED AS AN ADMISSION OR A STIPULATION BUT RATHER AS A STATEMENT MADE IN SETTLEMENT NEGOTIATIONS. THIS DISCLOSURE STATEMENT MAY NOT BE RELIED ON FOR ANY PURPOSE OTHER THAN TO DETERMINE WHETHER TO VOTE TO ACCEPT OR REJECT THE PLAN, AND NOTHING STATED HEREIN CONSTITUTES AN ADMISSION OF ANY FACT OR LIABILITY BY ANY PARTY, OR SHALL BE ADMISSIBLE IN ANY PROCEEDING INVOLVING THE DEBTORS OR ANY OTHER PARTY, OR BE DEEMED A REPRESENTATION OF THE TAX OR OTHER LEGAL EFFECTS OF ix

11 Pg 11 of 88 THE PLAN ON THE DEBTORS OR HOLDERS OF CLAIMS OR INTERESTS. CERTAIN OF THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT, BY THEIR NATURE, ARE FORWARD-LOOKING AND CONTAIN ESTIMATES AND ASSUMPTIONS. THERE CAN BE NO ASSURANCE THAT SUCH STATEMENTS WILL BE REFLECTIVE OF ACTUAL OUTCOMES. ALL HOLDERS OF IMPAIRED CLAIMS SHOULD CAREFULLY READ AND CONSIDER THIS DISCLOSURE STATEMENT AND THE PLAN IN THEIR ENTIRETY, INCLUDING SECTION V RISK FACTORS TO BE CONSIDERED, BEFORE VOTING TO ACCEPT OR REJECT THE PLAN. THIS DISCLOSURE STATEMENT CONTAINS SUMMARIES OF CERTAIN PROVISIONS OF THE PLAN, CERTAIN DOCUMENTS RELATED TO THE PLAN, CERTAIN EVENTS IN THE DEBTORS CHAPTER 11 CASES AND CERTAIN FINANCIAL INFORMATION. ALTHOUGH THE DEBTORS BELIEVE THAT SUCH SUMMARIES ARE FAIR AND ACCURATE, SUCH SUMMARIES ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO THE FULL TEXT OF SUCH DOCUMENTS. FACTUAL INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT HAS BEEN PROVIDED BY THE DEBTORS MANAGEMENT, EXCEPT WHERE OTHERWISE SPECIFICALLY NOTED. UNLESS SPECIFICALLY NOTED, THE FINANCIAL INFORMATION CONTAINED HEREIN HAS NOT BEEN AUDITED BY A CERTIFIED PUBLIC ACCOUNTING FIRM. THE DEBTORS DO NOT WARRANT OR REPRESENT THAT THE INFORMATION CONTAINED HEREIN, INCLUDING FINANCIAL INFORMATION, IS WITHOUT ANY INACCURACY OR OMISSION. THE DEBTORS BELIEVE THAT CONFIRMATION AND IMPLEMENTATION OF THE PLAN IS IN THE BEST INTERESTS OF THE DEBTORS ESTATES, CREDITORS AND EQUITY INTEREST HOLDERS. ACCORDINGLY, THE DEBTORS URGE HOLDERS OF CLAIMS TO VOTE TO ACCEPT THE PLAN. FOR FURTHER INFORMATION AND INSTRUCTIONS ON VOTING TO ACCEPT OR REJECT THE PLAN, SEE SECTION I OF THIS DISCLOSURE STATEMENT, ENTITLED PLAN VOTING INSTRUCTIONS AND PROCEDURES. EXCEPT AS OTHERWISE SPECIFICALLY AND EXPRESSLY STATED HEREIN, THIS DISCLOSURE STATEMENT DOES NOT REFLECT ANY EVENTS THAT MAY OCCUR SUBSEQUENT TO THE DATE HEREOF AND THAT MAY HAVE A MATERIAL IMPACT ON THE INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT. ACCORDINGLY, THE DELIVERY OF THIS DISCLOSURE STATEMENT WILL NOT, UNDER ANY CIRCUMSTANCE, IMPLY THAT THE INFORMATION HEREIN IS CORRECT OR COMPLETE AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. x

12 Pg 12 of 88 TABLE OF CONTENTS INTRODUCTION AND DISCLAIMER... i I. PLAN VOTING INSTRUCTIONS AND PROCEDURES... 1 A. Introduction... 1 B. Solicitation Procedures and Solicitation Package... 1 C. Voting Procedures and Voting Deadline... 2 D. Revocation; Waivers of Defects; Irregularities... 2 E. Confirmation Hearing and Deadline for Objections to Confirmation... 3 F. Executive Summary of the Plan... 3 II. OVERVIEW OF THE DEBTORS... 4 A. Corporate Structure and Business Operations Offshore Segment Oceangoing Segment... 6 B. Capital Structure Offshore Silos Tanker and Bulker Silos Newbuilds Silo Additional Non-Vessel Related Silos General Unsecured Creditors C. Events Leading to the Debtors Need to Restructure III. THE CHAPTER 11 CASES A. First Day Motions B. Retention of Restructuring and Other Professionals C. Use of Cash Collateral D. Citizens Lift Stay Motion E. Claims Process and Bar Date Schedules and Statements Bar Date Overview of Claims Claims Objections F. Appointment of Unsecured Creditors Committee G. Plan Exclusivity H. Debtors Extension to Assume or Reject their Unexpired Leases of Nonresidential Real Property I. Plan Negotiations With Prepetition Lenders IV. SUMMARY OF THE PLAN OF REORGANIZATION A. Overview of Chapter B. Plan Supplement xi

13 Pg 13 of 88 C. Classification of Claims and Interests Treatment Of Unclassified Claims Classification and Treatment of Claims and Interests Treatment of Classified Claims and Interests D. Alternative Treatment E. Special Provision Regarding Unimpaired Claims F. Acceptance Or Rejection Of The Plan Acceptance By Class Entitled To Vote Presumed Acceptance Of The Plan Elimination Of Classes Cramdown G. Means For Implementation of the Plan Joint Chapter 11 Plan Continued Legal Existence The Oceangoing Equity Sale The Newbuild Tanker Sale Proposed Purchaser Sources of Cash for Toisa Distributions and Operations Sources of Cash for Reorganized Oceangoing Debtors Distributions and Operations Approval and Authorization for the Amended and Restated Credit Facilities New Boards of Reorganized Debtors Corporate Action Effectuating Documents; Further Transactions Preservation Of Retained Actions Exemption From Certain Transfer Taxes And Recording Fees Further Authorization Cancellation Of Existing Securities And Agreements Closing of the Chapter 11 Case H. Provisions Governing Distributions Distribution Record Date Allowed Claims Distributions For Claims Allowed As Of The Effective Date Interest And Penalties On Claims Delivery of Distributions Withholding and Reporting Requirements Manner of Payment Under Plan Setoffs xii

14 Pg 14 of Payment of Disputed Claims I. Procedures For Disputed Claims Allowance of Claims Objections to Claims Estimation of Claims Establishment of Reserve Account No Distributions Pending Allowance Resolution of Claims Disallowed Claims J. Treatment Of Executory Contracts And Unexpired Leases Rejection Of Executory Contracts And Unexpired Leases Assumption of Existing Management Contracts D&O Liability Insurance Policies Indemnification Cure of Defaults Under Assumed Contracts Reservation of Rights K. Conditions Precedent To The Effective Date Conditions Precedent to the Effective Date Waiver of Conditions Precedent Effect of Failure of Conditions to Effective Date L. Effect of Confirmation Binding Effect Revesting Of Assets Compromise And Settlement Of Claims, Interests And Controversies Releases And Related Matters Discharge Of the Debtors Injunction Exculpation And Limitation Of Liability Term Of Bankruptcy Injunction Or Stays Post-Confirmation Date Retention Of Professionals M. Retention of Jurisdiction N. Miscellaneous Provisions Payment of Statutory Fees Amendment Or Modification Of The Plan Substantial Consummation Severability Of Plan Provisions Successors And Assigns Revocation, Withdrawal, Or Non-Consummation xiii

15 Pg 15 of Dissolution of Creditors Committee Governing Law Time Additional Documents Immediate Binding Effect Entire Agreement Notice Exhibits V. RISK FACTORS TO BE CONSIDERED A. Failure to Confirm the Plan B. Uncertainty of Extraterritorial Recognition of Plan Confirmation C. Potential Adverse Effects of Chapter D. No Assurance of Ultimate Recoveries E. Classification and Treatment of Claims and Interests F. Risk of Non-Confirmation of the Plan G. Non-Consensual Confirmation H. Risk Related to Final Cash Collateral Orders I. Risk Related to the Transactions Proposed in the Plan J. The Debtors Have No Duty to Update K. Failure to Identify Litigation Claims or Projected Objections L. No Waiver of Right to Object or Right to Recover Transfers and Assets M. Information Was Provided by the Debtors and Was Relied Upon by the Debtors Advisors N. No Assurance of Ultimate Recoveries; Uncertainty of Financial Projections O. Uncertainty of Post-Confirmation Value P. Business and Operational Risks Reliance on Management Companies Volatility of Shipping Market Charter Defaults Risks Related to Foreign Ports Smuggling Requisition of Vessels Arrest of Vessels Vessel Damage and Maintenance Insurance Fuel Prices Crew Costs Vessel Replacement and Technological Innovation xiv

16 Pg 16 of 88 Q. Legal and Regulatory Risks Litigation Global Regulatory Regimes and Anticorruption Laws Inspections and Surveys R. No Representation Outside This Disclosure Statement Are Authorized S. No Legal or Tax Advice Is Provided to You by This Disclosure Statement T. No Admission Made VI. CERTAIN INCOME TAX CONSEQUENCES OF THE PLAN A. Certain U.S. Federal Income Tax Consequences to U.S. Holders B. Certain U.S. Federal Income Tax Consequences to Non-U.S. Holders C. Importance of Obtaining Professional Tax Assistance VII. CONFIRMATION OF THE PLAN A. Confirmation Hearing B. Objections C. Requirements for Confirmation of the Plan Requirements of Section 1129(a) of the Bankruptcy Code Requirements of Section 1129(b) of the Bankruptcy Code Alternative to Confirmation and Consummation of the Plan Nonconsensual Confirmation CONCLUSION AND RECOMMENDATION xv

17 Pg 17 of 88 APPENDICES APPENDIX A Amended Joint Plan of Reorganization APPENDIX B APPENDIX C List of Debtors and Corporate Organization Chart Liquidation Analysis APPENDIX D Financial Projections APPENDIX E Valuation of Reorganized Debtors xvi

18 Pg 18 of 88 A. Introduction I. PLAN VOTING INSTRUCTIONS AND PROCEDURES On January 29, 2017 (the Petition Date ), the Debtors commenced with the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy Court ) voluntary cases pursuant to chapter 11 of title 11 of the United States Code (the Bankruptcy Code ). The Debtors chapter 11 cases (the Chapter 11 Cases ) are being administered under the caption In re Toisa Limited, et al., Case No (SCC). On, 2017, the Bankruptcy Court approved this Disclosure Statement as containing adequate information of a kind and in sufficient detail to enable a hypothetical holder of an Allowed Claim to make an informed judgment whether to accept or reject the Plan (the Disclosure Statement Approval Order ), APPROVAL OF THIS DISCLOSURE STATEMENT DOES NOT, HOWEVER, CONSTITUTE A DETERMINATION BY THE BANKRUPTCY COURT AS TO THE FAIRNESS OR MERITS OF THE PLAN. The purpose of this Disclosure Statement is to provide holders of Claims entitled to vote to accept or reject the Plan with adequate information about (i) the Debtors businesses and certain historical events, (ii) the Chapter 11 Cases, (iii) the Plan, (iv) the rights of holders of Claims and Interests under the Plan, and (v) other information necessary to enable each Holder of a Claim entitled to vote on the Plan to make an informed judgment as to whether to vote to accept or reject the Plan. Pursuant to section 1125 of the Bankruptcy Code, the Debtors submit this Disclosure Statement to all holders of Claims against the Debtors entitled to vote on the Plan to provide information in connection with the solicitation of votes to accept or reject the Plan. The only classes that are entitled to vote on the Plan are: Classes 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, and 14. The purpose of this Disclosure Statement is to provide adequate information to enable such holders to make a reasonably informed decision with respect to the Plan prior to exercising their right to vote to accept or reject the Plan. All other classes are either unimpaired under the Plan, in which case the holders of claims and interests in such classes are deemed to have accepted the Plan, or are receiving no distribution under the Plan, in which case the holders of claims and interests in such classes are deemed to have rejected the Plan. ALL HOLDERS OF IMPAIRED CLAIMS AND INTERESTS ENTITLED TO VOTE ON THE PLAN ARE ENCOURAGED TO READ THIS DISCLOSURE STATEMENT AND ITS APPENDICES CAREFULLY AND IN THEIR ENTIRETY BEFORE DECIDING TO VOTE TO ACCEPT OR REJECT THE PLAN. THIS DISCLOSURE STATEMENT CONTAINS IMPORTANT INFORMATION ABOUT THE PLAN AND IMPORTANT CONSIDERATIONS PERTINENT TO ACCEPTANCE OR REJECTION OF THE PLAN. THIS DISCLOSURE STATEMENT, THE PLAN, AND BALLOTS ARE THE ONLY DOCUMENTS TO BE USED IN CONNECTION WITH THE SOLICITATION OF VOTES ON THE PLAN. NO PERSON HAS BEEN AUTHORIZED TO DISTRIBUTE ANY INFORMATION CONCERNING THE DEBTORS RELATING TO THE SOLICITATION OTHER THAN THE INFORMATION CONTAINED HEREIN. The Disclosure Statement is also available to all holders of claims against and interests in the Debtors for informational purposes, including to detail the impact the Plan will have on such holders Claims and Interests. B. Solicitation Procedures and Solicitation Package The Debtors are causing Solicitation Packages to be distributed to holders of Claims and Interests. With respect to holders of Claims and Interests entitled to vote on the Plan, each Solicitation Package shall include: (1) the Disclosure Statement Approval Order, (2) a notice of the hearing to consider confirmation of the Plan (the Confirmation Hearing Notice ), (3) this Disclosure Statement with the Plan annexed thereto, and (4) an appropriate form of ballot(s) and appropriate return envelope with postage pre-paid. With respect to holders of Claims and Interests not entitled to vote on the Plan, each Solicitation Package shall include (1) the Confirmation Hearing Notice, (2) a notice of such

19 Pg 19 of 88 holder s non-voting status, and (3) such other materials as may be ordered or permitted by the Bankruptcy Court. The Disclosure Statement Approval Order sets forth, among other things (1) solicitation procedures with respect to holders of Claims and Interests in voting classes, (2) the deadline for submitting ballots to accept or reject the Plan, (3) the date, time and place of hearing to consider confirmation of the Plan and the time for filing objections to the Plan, (4) the voting record date, and (5) procedures for tabulation of the ballots cast on the Plan, including assumptions and procedures for tabulating ballots that are not completed fully or correctly. Holders of claims and interests should read the Disclosure Statement Approval Order and, if applicable, the instructions attached to your ballot received in the Solicitation Package in connection with this section of the Disclosure Statement. C. Voting Procedures and Voting Deadline After carefully reviewing the Plan, this Disclosure Statement, and the detailed instructions accompanying your ballot, please indicate your acceptance or rejection of the Plan by voting in favor of or against the Plan on the enclosed ballot. Please complete and sign your ballot and return your ballot to Kurtzman Carlson Consultants, LLC (the Voting Agent ) either by fax to the fax number set forth below; , to the address set forth below; or by hand delivery during customary business hours, or overnight courier to the address set forth below, so that it is received by the Voting Deadline. THE VOTING DEADLINE IS 5:00 P.M. PREVAILING EASTERN TIME ON UNLESS EXTENDED BY THE DEBTORS (THE VOTING DEADLINE ). THE VOTING RECORD DATE FOR DETERMINING WHETHER A HOLDER OF A CLAIM IS ENTITLED TO VOTE ON THE PLAN IS. FOR YOUR VOTE TO BE COUNTED, YOUR BALLOT MUST BE PROPERLY COMPLETED AS SET FORTH ABOVE AND IN ACCORDANCE WITH THE VOTING INSTRUCTIONS ON THE BALLOT AND RECEIVED NO LATER THAN THE VOTING DEADLINE BY THE VOTING AGENT AT THE ADDRESS, FAX NUMBER OR ADDRESS SET FORTH BELOW. If by First-Class Mail, Hand Delivery or Overnight Mail: Toisa Limited, et al., Ballot Processing c/o Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, California If you have any questions about the procedure for voting your Claim, the packet of materials that you have received or the amount of your Claim, or if you wish to obtain an additional copy of the Plan, this Disclosure Statement, or any appendices or exhibits to such documents, please contact the Voting Agent as follows: By ToisaInfo@kccllc.com By Phone: (888) or (310) if outside US or Canada Case website: Except as provided herein, unless the ballot is timely submitted to the Voting Agent before the Voting Deadline or the Bankruptcy Court orders otherwise, the Debtors may, in their sole discretion, reject such ballot as invalid, and therefore decline to utilize it in connection with seeking confirmation of the Plan ( Confirmation ). In the event that any Claim is the subject of an objection or contested matter, any vote to accept or reject the Plan cast with respect to such Claim will not be counted for purposes of determining whether the Plan has been accepted or rejected, unless the Bankruptcy Court orders otherwise. D. Revocation; Waivers of Defects; Irregularities Unless otherwise directed by the Bankruptcy Court, all questions as to the validity, form, eligibility (including time of receipt), acceptance, revocation, or withdrawal of ballots will be determined by the Voting Agent and the Debtors in their sole discretion, which determination will be final and binding. Once a party delivers a valid ballot for the acceptance or rejection of the Plan, such party may 2

20 Pg 20 of 88 not withdraw or revoke such acceptance or rejection without the Debtors written consent or an order of the Bankruptcy Court. The Debtors also reserve the right to reject any and all ballots not in proper form. The Debtors further reserve the right to waive any defects or irregularities or conditions of delivery as to any particular ballot. The interpretation (including the ballot and the respective instructions therein) by the Debtors, unless otherwise directed by the Bankruptcy Court, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with deliveries of ballots must be cured within such time as the Debtors (or the Bankruptcy Court) determine. Neither the Debtors nor any other person will be under any duty to provide notification of defects or irregularities with respect to deliveries of ballots nor will any of them incur any liabilities for failure to provide such notification. Unless otherwise directed by the Bankruptcy Court, delivery of such ballots will not be deemed to have been made until such irregularities have been cured or waived. Ballots previously furnished (and as to which any irregularities have not theretofore been cured or waived) will be invalidated. E. Confirmation Hearing and Deadline for Objections to Confirmation THE BANKRUPTCY COURT HAS SCHEDULED A HEARING TO CONSIDER CONFIRMATION OF THE PLAN ON PURSUANT TO THE NOTICE OF CONFIRMATION HEARING PROVIDED TO HOLDERS OF CLAIMS AND INTERESTS OR THEIR REPRESENTATIVES, OBJECTIONS TO CONFIRMATION MUST BE FILED WITH THE BANKRUPTCY COURT BY AT 4:00 P.M. PREVAILING EASTERN TIME AND ARE GOVERNED BY BANKRUPTCY RULES 3020(B) AND 9014 AND THE LOCAL RULES OF THE BANKRUPTCY COURT. UNLESS AN OBJECTION TO CONFIRMATION IS TIMELY SERVED AND FILED, SUCH OBJECTION TO CONFIRMATION MAY NOT BE CONSIDERED BY THE BANKRUPTCY COURT AT THE CONFIRMATION HEARING. F. Executive Summary of the Plan Since the outset of these Chapter 11 Cases, the Debtors and their advisors, as well as the Proposed Purchaser (defined herein), have repeatedly sought to engage in discussions with prepetition lenders, especially the Informal Committee (described below) as well as their principals, financial advisors, and attorneys, as applicable, in an effort to reach a global resolution with respect to these Chapter 11 Cases. As part of an ongoing dialogue with the Informal Committee, the Debtors have offered several plan proposals. The Informal Committee has responded that the Debtors proposals have not been acceptable and provided the Debtors with an Indicative Term Sheet. Although the Indicative Term Sheet did not provide terms, this Plan is responsive to the concepts raised in the Indicative Term Sheet. Thus, the Plan described in this Disclosure Statement is a plan of reorganization proposed by the Debtors in good faith, provides a path forward, and also complies with a milestone to which Debtors agreed as part of a final cash collateral order negotiated with the Informal Committee (described below) [See Dkt. No. 246 at 22.aa]. The Debtors intend to continue negotiations with the Informal Committee, their secured lenders, as well as the Creditors Committee (described below) on the terms of the Plan. It is therefore expected that this Plan will be amended. The purpose of the Plan is to provide the Reorganized Debtors with a capital structure supported by cash flows from operations, proposed transactions, and a substantial working capital infusion from the Newbuild Tanker Purchaser and Oceangoing Equity Purchaser (as defined in the Plan) that will allow the Debtors to emerge from bankruptcy as reorganized enterprises upon the Effective Date of the Plan and address Allowed Claims as provided for in the Plan. The Plan also provides for the release of claims against Purchaser in exchange for certain consideration described in the Plan. The Debtors believe that the Plan provides for the payment in full of the Allowed Claims of their creditors, and as such, satisfies the absolute priority rule. Therefore, the Debtors are not seeking approval of the Plan, including the treatment provided to the equity interests on the basis that the Purchaser is providing new value. 3

21 Pg 21 of 88 The Debtors believe that the reorganization contemplated by the Plan is in the best interests of its creditors as a whole. If the Plan is not confirmed, the Debtor believes that it will be forced to liquidate under Bankruptcy Code. In that event, creditors would realize substantially lower recoveries on account of their Allowed Claims. The Debtors retain the right, in their sole discretion and subject solely to their business judgment to enter into any alternative restructuring transaction including (i) a merger, consolidation, business combination, recapitalization, or refinancing of any of the Debtors (in one or a series of related transactions) on terms other than as set forth in the proposed transactions in the Plan, (ii) the issuance, sale, transfer, exchange, or other disposition by any of the Debtors of any equity interests (other than common stock or equity interests issued in respect of any employee stock or unit options), or (iii) a sale or transactions under section 363 or a chapter 11 plan for all or substantially all of the Debtors assets. II. OVERVIEW OF THE DEBTORS This Disclosure Statement contains, among other things, descriptions and summaries of provisions of the Plan. Unless otherwise defined herein, all capitalized terms contained herein have the meanings ascribed to them in the Plan. A. Corporate Structure and Business Operations Toisa Limited is the ultimate parent of each of the other Debtors in these Chapter 11 Cases. A list of the Debtors and a corporate organization chart is attached as Appendix B hereto. Toisa is also an operating company that directly owns 23 offshore vessels. Toisa s registered office is at Clarendon House, 2 Church Street, Hamilton, Bermuda. In addition to owning 23 vessels, Toisa directly owns six Debtors, each of which owns a single vessel (three offshore vessels and three tankers). Toisa also owns the Debtor holding company, Trade & Transport, Inc. ( T&T ), which directly owns 17 Debtors, each of which owns a single vessel (ten tankers and seven bulkers). Gregory Callimanopulos, who has over fifty (50) years of experience in the maritime industry, is the ultimate beneficial owner of each of the Debtors. As is common practice in the shipping industry, the Debtors have very few employees. Rather they rely on three non-debtor ship managers and their management teams at their non-debtor management companies: Sealion Shipping, Ltd. ( Sealion ), Marine Management Services M.C. ( MMS ), and Marine Management Bulk Services Inc. ( MMBS and together with MMS and Sealion, the Management Companies and each a Management Company ) provide management services to the Debtors. Sealion provides ship management services to the offshore fleet (the Offshore Segment ), and MMS and MMBS provide ship management services to the tanker and bulker fleets, respectively (the Oceangoing Segment ). As more fully described below, these management services companies oversee, manage, and exercise a degree of control over the operations of the Debtors vessels. Sealion is an accredited ISM (International Safety Management) ship management company and provides a full range of ship management functions including operating, technical, chartering, crewing, project management, safety, purchasing and logistics, and accounting services to the offshore fleet. Additionally, Brokerage & Management Corporation ( BMC ), a New York corporation with offices at 40 Wall Street in New York City, is an agency of Toisa and provides advice and support to Sealion managed vessels. Typically, Sealion will pay all invoices for these services to third-parties and then invoice Toisa or, where applicable, the specific vessel operating company for reimbursement. MMS and MMBS provide operating, technical, chartering, accounting, financial and legal support on behalf of the Debtors to facilitate their tanker and bulker operations. Additionally, Trade and Transport (UK) Ltd. ( T&T UK ) is an agency of T&T and provides chartering, and sale and purchase support for the ships in the Oceangoing Segment. Further, BMC provides chartering, and sale and purchase support for MMS managed vessels. Typically, expenses of the tanker and bulker vessels are paid by either MMS or MMBS on behalf of the Debtor vessel operating companies, which in turn seek reimbursement from the vessel operating companies. 4

22 Pg 22 of 88 In order to effectively and profitably manage the Debtors fleet and business, the Debtors entered into management agreements with the Management Companies (collectively, the Management Agreements ). The Management Agreements can be divided into two categories: (i) the MMS and MMBS Agreements, which govern the Oceangoing Segment of the enterprise; and (ii) the Sealion Management Agreement, which governs the Offshore Segment. MMS and MMBS operate as the managers of the Debtors oceangoing fleet of tanker and bulkers. In that connection, MMS and MMBS provide chartering, accounting, financial, and legal support on behalf of the Debtors to facilitate the operations of the Debtors thirteen (13) tankers and seven (7) bulkers. Each individual vessel entered into a Management Agreement with either MMS or MMBS (depending on the type of vessel). The terms and conditions of these agreements are substantially similar, except for the vessel description and compensation amount, which differ slightly. Under these Management Agreements, the respective Management Agent provides administrative, operational, and ship management services, including charter negotiations and repair. Additionally, under the Management Agreements, the Debtors agreed to indemnify and hold harmless the respective Management Agent for all liabilities. In return for these services, a daily management fee ranging from $1,500 to $2,000 is paid to MMS and MMBS, as appropriate, which fees are paid monthly. In addition to the daily management fee, MMS and MMBS are entitled to a 1% commission of the aggregate transaction value of the: (1) disposition of the vessel; (2) acquisition of new vessels; or (3) advisory services in connection with the vessels and any future vessels. Each of the Management Agreements between MMS or MMBS and a vessel owner has a five-year term, with the option to renew. Sealion is the Management Company for the Debtors Offshore Segment and facilitates the operations of twenty-six (26) offshore vessels, twenty-three of which Toisa Limited owns directly. The remaining three (3) offshore vessels are wholly-owned by separate, direct subsidiaries of Toisa Limited. Rather than having each individual vessel enter into a separate Management Agreement, Sealion has a master Management Agreement with Toisa Limited. The original Sealion Management Agreement between Sealion and Toisa was executed in 1989 and has continually been amended and renewed, as needed, to include additional vessels and to extend the term. In addition, Sealion earns commission and management fees for the vessels it manages in accordance with the Management Agreements. These commission and management fees are invoiced on a quarterly basis and settled on commercial terms. In this regard, the compensation structure is different with Sealion than it is with MMS and MMBS. Specifically, Toisa Limited pays Sealion an annual fee on account of each vessel based on the schedule to the Management Agreement, payable each month. Sealion also provides ship management services to Toisa Limited subsidiary and Debtor entity Edgewater Offshore Limited, and the intercompany relationship is managed the same way as MMS and MMBS intercompany claims are handled. Compensation structures aside, the duties and responsibilities of Sealion are substantially identical to those of MMS and MMBS. Additionally, under Management Agreements, the Debtors agreed to indemnify and hold harmless Sealion for all liabilities. Under the Plan, the Debtors intend to assume the Management Agreements. 1. Offshore Segment The Debtors offshore fleet consists of four (4) construction support vessels, one (1) well test service vessel, nine (9) remotely operated vehicle ( ROV ) support vessels, and twelve (12) platform supply and anchor handling tug supply vessels ( PSV vessels and AHTS vessels, respectively). The entire offshore fleet is equipped with dynamic positioning ( DP ) technology that enables a vessel to maintain its position over the ocean floor without use of anchors, which is critical to the ability of the vessels to perform their functions in the deep sea locations they operate in, where use of anchors would be impractical. The Debtors construction support vessels are equipped with large unobstructed deck areas, substantial accommodation capacity and subsea heavy lift crane capability, able to support surface and subsea construction and installation projects, and inspection, repair and maintenance ( IRM ) programs. Construction support vessels are designed to provide tailored solutions and facilitate larger projects that often require such vessels to remain on location for long periods of time. The Debtors construction support vessels range in length from 373 to 436 feet long. 5

23 Pg 23 of 88 The Debtors well test service vessel, the Toisa Pisces, is a highly specialized type of DP vessel designed and built to receive, process, store and offload hydrocarbons and other products, from drilling rigs or clean-up operations. The Debtors ROV Support Vessels are DP vessels from which ROV (Remote Operating Vehicle) operations are conducted. ROV Support Vessels are equipped with computer-controlled, precision, position-keeping capabilities with added redundancy features, such as multiple computers, thrusters and reference systems. Such vessels have additional cabins, mess room facilities and customer offices, to comfortably accommodate the ROV support crews of the Debtors customers. The Debtors PSV vessels are specially designed to carry a diverse range of equipment, cargoes and personnel to offshore drilling rigs and platform. Modern PSVs now incorporate dynamic positioning systems as standard, have substantial available deck areas, and the capability underdeck to transport and discharge offshore, oil and water-based muds, brine, fuel, dry bulk cargoes, drill water and potable water. The Debtors AHTS vessels are designed for towing and/or anchor handling. AHTS vessels are predominantly employed in the movement of rigs and platforms, and for the handling and laying of their anchors. These vessels also have supply duty capabilities. The historic downturn in the oil market has led to a number of the Debtors customers to scale back or cease their offshore exploration and production activities. As a result almost all of the Debtors offshore vessels are currently being held in cold lay-up to reduce costs, maintain the assets and preserve value pending a rebound in the oil market. As of the Petition Date, 21 of the Debtors offshore vessels were in lay-up. After the commencement of the Chapter 11 Cases, three more offshore vessels completed their charters and were also moved to cold lay-up. 2. Oceangoing Segment The Debtors oceangoing fleet of thirteen tankers consist of five (5) Suezmax tankers, five (5) Aframax tankers, and three (3) Panamax tankers. The Debtors Suezmax tankers have a capacity of approximately 160,000 deadweight tons ( DWT ), their Panamax tankers have a capacity of 73,584 DWT, and their Aframax Tankers approximately 112,000 DWT. The tanker business has historically been a strong segment for the Debtors, and after a brief downturn in late summer 2016, returned to moderate profitability in 2017 before declining again in the summer of The Debtors operate one of the youngest tanker fleets for an operator of their size with the entire fleet less than twelve years old. The Debtors seven (7) bulkers are all Kamsarmax bulkers capable of carrying approximately 81,000 tons of dry cargo in seven holds/hatches. The Debtors bulker fleet is very young with all of the bulkers built since The Debtors tankers generated the majority of the revenue and the profits for the company in the first three quarters of 2016 and experienced a firm market for the first half of However, weakness began to develop in the third quarter of 2016 and the tanker market fell sharply in August The Debtors seven bulk carriers operated in a weak dry goods market that produced negative returns for the first three quarters of 2016 and as well as 2017 to date. B. Capital Structure In addition to owning 23 vessels, Toisa directly owns six Debtors, each of which owns a single vessel (three offshore vessels and three tankers). Toisa also owns the Debtor holding company, T&T, which directly owns 17 Debtors, each of which owns a single vessel (ten tankers and seven bulkers). The Debtors capital structure is organized into 17 separate groups or silos that reflect obligations to separate lenders under separate loan facilities secured by various built vessels, as well as two separate silos related to the financing of 6 tankers under construction and a Gulfstream Aerospace GV-SP G550 airplane. Each of these silos and the related secured debt facilities are described below. 6

24 Pg 24 of Offshore Silos (a) Silo 1 BNDES Silo BNDES Credit Facility. Non-debtor Sealion Do Brazil Navegacao LTDA ( Sealion Do Brazil ) is a borrower under that certain senior secured credit facility, dated as of May 28, 2003, utilized to finance the vessel Sealion Amazonia (the BNDES Credit Facility ). The BNDES Credit Facility has a term of twenty (20) years with a rate of five percent (5%). As of the Petition Date, the unpaid principal balance of the BNDES Credit Facility is approximately $8,407,000. Sealion Do Brazil s obligations under the BNDES Credit Facility are secured by a lien on the vessel, including the assignment of charters and insurances. The lender under the BNDES Credit Facility is Banco Nacional de Desenvolvimento Economico e Social ( BNDES ). Toisa is a party to a guarantee dated as of May 28, 2003 pursuant to which it undertook to guarantee the non-debtor s obligations in connection with the BNDES Credit Facility. (b) Silo 2 BNP Silo BNP Credit Facility. Toisa is a borrower under that certain senior secured credit facility, dated as of March 11, 2008, utilized to finance the vessels named Toisa Pegasus and Toisa Paladin (the BNP Credit Facility ). The BNP Credit Facility has a term of twelve (12) years from the drawdown date and has a rate of Libor %. As of the Petition Date, the unpaid principal balance of the BNP Credit Facility was approximately $78,869,046. Toisa s obligations under the BNP Credit Facility are secured by first priority liens on the vessels, including the assignment of earnings and insurances. The lenders under the BNP Credit Facility are BNP Paribas ( BNP ), Unicredit Bank AG ( Unicredit ) and Commerzbank AG ( Commerzbank ), who are the successors to the original lenders. BNP is the swap bank, agent and security trustee. (c) Silo 3 Commonwealth Bank of Australia Silo Commonwealth Bank of Australia Credit Facility. Toisa is a borrower under that certain senior secured credit facility, dated as of February 21, 2014, utilized to finance the vessel named Toisa Solitare (the Commonwealth Bank of Australia Credit Facility ). The Commonwealth Bank of Australia Credit Facility has term of seven (7) years and rate of Libor %. As of the Petition Date, the unpaid principal balance of the Commonwealth Bank of Australia Credit Facility was approximately $22,750,000. Toisa s obligations under the Commonwealth Bank of Australia Credit Facility are secured by a lien on the vessel Toisa Solitare, including the assignment of charters and insurances. In addition, the vessel named Toisa Warrior was added as additional collateral at a later date via an intercreditor agreement with ING and the Commonwealth Bank of Australia. The Commonwealth Bank of Australia is the agent, security trustee, and lender under the Commonwealth Bank of Australia Credit Facility. (d) Silo 4 Citi Offshore Silo Citi Offshore Credit Facility. Toisa is a borrower under that certain senior secured credit facility, dated as of December 30, 2009, utilized to finance the vessels named Toisa Envoy, Toisa Explorer, Toisa Elan, and Toisa Wave (the The Citi Offshore Credit Facility ). The Citi Offshore Credit Facility has a term of ten (10) years with a rate of Libor + 3%. As of the Petition Date, the unpaid principal balance on the Citi Offshore Credit Facility was approximately $99,493,000. Toisa s obligations under the Citi Offshore Credit Facility are secured by liens on the vessels, including assignment of insurance and charters. The lenders under the Citi Offshore Credit Facility are Citibank N.A. ( Citi ), the Export- Import Bank of China ( Cexim ) and ING Bank N.V. ( ING ), who joined the Citi Offshore Credit Facility after it signed a transfer certificate taking half of Citi s previous 30% share of the facility. Citibank Europe PLC is agent and Citi is security trustee. (e) Silo 5 Citizens Silo Citizens I Credit Facility. Edgewater Offshore Shipping, LTD. ( Edgewater ) is a borrower under that certain senior secured credit facility, dated as of July 28, 2010, utilized to finance the vessel named Toisa Independent (the Citizens I Credit Facility ). The Citizens I Credit Facility has a term 7

25 Pg 25 of 88 of seven (7) years and rate of Libor + 2.5%. As of the Petition Date, the unpaid principal balance on the Citizens I Credit Facility was approximately $12,260,416. Edgewater s obligations under the Citizens I Credit Facility are secured by a lien on the vessel, including assignment of insurance and charters. The lender under the Citizens I Credit Facility is Citizens Bank NA ( Citizens ). Toisa is a party to a guarantee dated as of July 28, 2010 pursuant to which it undertook to guarantee Edgewater s obligations in connection with the Citizens I Credit Facility. Related to the Citizens I Credit Facility, on January 13, 2017, Edgewater extended a loan in the principal amount of $12,260,416 to Toisa (the Edgewater Loan ). The Edgewater Loan had a term of one (1) month (renewable on a month-to-month basis), and Toisa agreed to place the principal in an interest bearing account with the sum becoming due upon maturity. Citizens II Credit Facility. Toisa is a borrower under that certain senior secured credit facility, dated as of July 28, 2010, utilized to finance the vessel named Toisa Coral (the Citizens II Credit Facility ). The Citizens Credit II Facility has a term of seven (7) years and rate of Libor + 2.5%. As of the Petition Date, the unpaid principal balance on the Citizens II Credit Facility is approximately $6,535,258. Toisa s obligations under the Citizens II Credit Facility are secured by a lien on the vessel, including assignment of insurance and charters. The lender under the Citizens II Credit Facility is Citizens. (f) Silo 6 Credit Agricole Offshore Silo Credit Agricole Offshore Credit Facility. Toisa is a borrower under that certain senior secured credit facility, dated as of September 21, 2007, utilized to finance the vessels named Toisa Valiant, Toisa Vigilant, and Toisa Voyager (the Credit Agricole Offshore Credit Facility ). The Credit Agricole Offshore Credit Facility has a term of twelve (12) years from the drawdown date and a rate of Libor %. As of the Petition Date, the unpaid principal balance on the Credit Agricole Offshore Credit Facility was approximately $47,400,000. Toisa s obligations under the Credit Agricole Offshore Credit Facility are secured by liens on the vessels, including assignment of insurance and charters. The lender under the Credit Agricole Offshore Credit Facility is Credit Agricole Corporate and Investment Bank ( Credit Agricole ), formerly known as Calyon. (g) Silo 7 DNB Offshore Silo DNB Offshore Credit Facility. Toisa is a borrower under that certain senior secured credit facility, dated as of December 16, 2014, utilized to finance the purchase of vessels named Toisa Proteus, Toisa Intrepid, and Toisa Conqueror (the DNB Offshore Credit Facility ). The DNB Offshore Credit Facility has a term of five (5) years and a rate of Libor %. As of the Petition Date, the unpaid principal balance on the DNB Offshore Credit Facility was approximately $58,411,354. Toisa s obligations under the DNB Offshore Credit Facility are secured by liens on the vessels, including assignment of insurance and charters. The lenders under the DNB Offshore Credit Facility are DNB Bank ASA ( DNB ) and UniCredit Bank AG ( UniCredit ). DNB is the agent and security trustee. (h) Silo 8 DVB Silo DVB Credit Facility. Toisa is a borrower under that certain senior secured credit facility, dated as of December 19, 2014, utilized to partially finance the vessels named Toisa Pisces and Toisa Perseus (the DVB Credit Facility ). The DVB Credit Facility has a term of five (5) years and a rate of Libor %. As of the Petition Date, the unpaid principal balance on the DVB Credit Facility is approximately $73,978,000. Toisa s obligations under the DVB Credit Facility are secured by liens on the vessels, including assignment of insurance and charters. The lender under the DVB Credit Facility is DVB Bank of America N.V. ( DVB ). DVB is the agent and security trustee. Toisa Horizon Inc. is party to a guarantee dated December 19, 2014 pursuant to which it undertook to guarantee Toisa s obligations in connection with the DVB Credit Facility. (i) Silo 9 ING Offshore Silo ING Offshore Credit Facility. Toisa is a borrower under that certain senior secured credit facility, dated as of February 21, 2014, utilized to finance the purchase of the vessels named Toisa Serenade and Toisa Sonata (the ING Offshore Credit Facility ). The ING Offshore Credit Facility has a seven (7) year term and a rate of Libor + 2.3%. As of the Petition Date, the unpaid principal balance on the ING 8

26 Pg 26 of 88 Offshore Credit Facility was approximately $42,316,000. Toisa s obligations under the ING Offshore Credit Facility are secured by liens on the vessels, including assignment of insurance and charters. In addition, via a letter dated June 22, 2016 and an intercreditor agreement also dated June 22, 2016, the vessel named Toisa Warrior was added as additional collateral. The lender under the ING Offshore Credit Facility is ING Bank N.V. ( ING ). ING is the agent and security trustee. (j) Silo 10 Wells Fargo Silo Wells Fargo Credit Facility. Toisa is a borrower under that certain senior secured credit facility, dated as of July 28, 2010, utilized to finance the purchase of the vessel named Toisa Crest (the Wells Fargo Credit Facility ). The Wells Fargo Credit Facility has a term of seven (7) years from the drawdown date and a rate of Libor + 2.5%. As of the Petition Date, the unpaid principal balance on the Wells Fargo Credit Facility was approximately $6,756,000. Toisa s obligations under the Wells Fargo Credit Facility are secured by a lien on the vessel, including assignment of insurance and charters. The lender under the Wells Fargo Credit Facility is Wells Fargo Equipment Finance Inc. ( Wells Fargo ), who is the successor to the original lender. 2. Tanker and Bulker Silos (k) Silo 11 Citi Tanker Silo Citi Tanker Credit Facility. Debtors United Journey Inc. and United Seas Inc. (collectively, the UJ-US Debtors ) are borrowers under that certain senior secured credit facility, dated as of January 26, 2015, utilized to finance the vessels United Journey and United Seas (the Citi Tanker Credit Facility ). The Citi Tanker Credit Facility has a term of five (5) years and a rate of Libor + 2%. As of the Petition Date, the unpaid principal balance of the Citi Tanker Credit Facility was approximately $46,094,548. The UJ-US Debtors obligations under the Citi Tanker Credit Facility are secured by liens on the vessels, including assignments of insurance and charters. Citi is the lender under the Citi Tanker Credit Facility. Toisa is a party to a guarantee dated as of January 26, 2015 pursuant to which it undertook to guarantee the UJ-US Debtors obligations in connection with the Citi Tanker Credit Facility. (l) Silo 12 Commerzbank Silo Commerzbank I Credit Facility. Debtors United Banner, Inc., United Courage, Inc., and United Ambassador, Inc. (the UB-UC-UA Debtors ) are borrowers under that certain senior secured credit facility, dated as of June 13, 2007, utilized to finance the vessels named United Banner, United Carrier, and United Ambassador (the Commerzbank I Credit Facility ). The Commerzbank I Credit Facility has a term of ten (10) years and a rate of Libor + 1%. As of the Petition Date, the unpaid principal balance on the Commerzbank I Credit Facility was approximately $53,237,261. The UB-UC-UA Debtors obligations under the Commerzbank I Credit Facility are secured by liens on the vessels, including assignment of insurance and charters. The lenders under the Commerzbank I Credit Facility are Commerzbank AG and Unicredit AG. T&T and Toisa are parties to two separate guarantees dated as of June 13, 2007 and February 13, 2013 respectively, pursuant to which they undertook to guarantee the UB-UC-UA Debtors obligations in connection with the Commerzbank I Credit Facility. Commerzbank II Credit Facility. Debtor United Honor, Inc. (the UH Debtor ) is a borrower under that certain senior secured credit facility, dated as of March 3, 2010, utilized to finance the vessel named United Honor (the Commerzbank II Credit Facility ). The Commerzbank II Credit Facility has a term of ten (10) years and a rate of Libor + 2.5%. As of the Petition Date, the unpaid principal balance on the Commerzbank II Credit Facility is approximately $25,609,035. The UH Debtor s obligations under the Commerzbank II Credit Facility are secured by a lien on the vessel, including assignment of insurance and charters. The lender under the Commerzbank II Credit Facility is Commerzbank FKA Deutsche Schiffsbank AG. T&T is a party to a guarantee dated as of March 3, 2010, pursuant to which it undertook to guarantee the UH Debtor s obligations in connection with the Commerzbank II Credit Facility. Toisa is also a party to a guarantee dated October 24, 2014 pursuant to which it undertook to guarantee the UH Debtor s obligations in connection with the Commerzbank II Credit Facility. 9

27 Pg 27 of 88 (m) Silo 13 Credit Agricole Tanker Silo Credit Agricole Tanker Credit Facility. Debtor Trade Industrial Development Corporation (the UG Debtor ) is a borrower under that certain senior secured credit facility, dated as of November 7, 2008, utilized to finance the purchase of the vessel named United Grace (the Credit Agricole Tanker Credit Facility ). The Credit Agricole Offshore Credit Facility has a term of twelve (12) years and a rate of Libor + 1.0%. As of the Petition Date, the unpaid principal balance on the Credit Agricole Offshore Credit Facility was approximately $25,976,000. The UG Debtor s obligations under the Credit Agricole Tanker Credit Facility are secured by a lien on the vessel, including assignment of insurance and charters. The lender under the Credit Agricole Tanker Credit Facility is Credit Agricole, who is the successor to the original lender. T&T is a party to a guarantee dated as of November 7, 2008, pursuant to which it undertook to guarantee the UG Debtor s obligations in connection with the Credit Agricole Tanker Credit Facility. (n) Silo 14 DNB Tanker Silo DNB Tanker Credit Facility. Debtors United Dynamic, Inc., United Emblem, Inc., and United Ideal, Inc. (the Toisa Tanker Debtors ) are borrowers under that certain senior secured credit facility, dated as of September 20, 2010, utilized to finance the vessels named United Emblem, United Dynamic, and United Ideal (the DNB Tanker Credit Facility ). On August 30, 2012 Toisa Invincible was added as collateral and gave a first preferred mortgage via a supplemental agreement. The DNB Tanker Credit Facility has a term of ten (10) years and a rate of Libor % % depending on the interest coverage ratio. As of the Petition Date, the unpaid principal balance on the DNB Tanker Credit Facility was approximately $110,703,990. The Debtor s obligations under the DNB Tanker Credit Facility are secured by liens on the vessels, including assignment of insurance and charters. The lenders under the DNB Offshore Credit Facility are DNB Bank ASA ( DNB ), Royal Bank of Scotland PLC ( RBS ), and HSH Nordbank AG ( HSH ). DNB is the agent and security trustee. Toisa is a party to a guarantee dated as of September 20, 2010, pursuant to which it undertook to guarantee the Toisa Tanker Debtors obligations in connection with the DNB Tanker Credit Facility. (o) Silo 15 ING Bulker Silo ING Bulker Credit Facility. Trade Unity Inc., Trade Resource Inc., Trade Prosperity Inc., Trade Quest Inc., and Trade Spirit Inc. (the Five SPC Debtors ) are borrowers under that certain senior secured credit facility, dated as of May 7, 2015, utilized to finance the vessels named Trade Quest, Trade Spirit, Trade Unity, Trade Prosperity, and Trade Resource (the ING Bulker Credit Facility ). The ING Bulker Credit Facility has a term of seven (7) years and a rate of Libor + 1.9%. As of the Petition Date, the unpaid principal balance on the ING Bulker Credit Facility was approximately $72,265,104. Toisa s obligations under the ING Bulker Credit Facility are secured by liens on the vessels, including assignment of insurance and charters. The lender under the ING Bulker Credit Facility is ING Bank N.V. ( ING ). ING is the agent and security trustee. Toisa is a party to a guarantee dated as of May 7, 2015, pursuant to which it undertook to guarantee the Five SPC Debtors obligations in connection with the ING Bulker Credit Facility. (p) Silo 16 NBG Silo NBG Credit Facility. Debtor Trade Sky Inc. is a borrower under that certain senior secured credit facility, dated as of November 13, 2008, utilized to finance the purchase of vessel named United Fortitude (the NBG Credit Facility ). The NBG Credit Facility has a term of ten (10) years and a rate of Libor + 1%. As of the Petition Date, the unpaid principal balance on the NBG Credit Facility is approximately $29,925,000. Toisa s obligations under the NBG Credit Facility are secured by a lien on the vessel, including assignment of insurance and charters. The lender under the NBG Credit Facility is National Bank of Greece S.A. ( NBG ). T&T is a party to a guarantee dated as of November 12, 2008 pursuant to which it undertook to guarantee Trade Sky Inc. s obligations in connection with the NBG Credit Facility. 10

28 Pg 28 of 88 (q) Silo 17 Danish Ship Finance Silo Danish Ship Offshore Credit Facility. Toisa is a borrower under that certain senior secured credit facility, dated as of November 11, 2014, utilized to finance the vessels named Toisa Defiant, Toisa Daring, and Toisa Dauntless (the Danish Ship Offshore Credit Facility ). The Danish Ship Finance Offshore Credit Facility has a term of seven (7) years and a rate of Libor %. As of the Petition Date, the unpaid principal balance on the Danish Ship Offshore Credit Facility was approximately $64,643,000. Toisa s obligations under the Danish Ship Offshore Credit Facility are secured by liens on the vessels, including assignment of insurance and charters. In addition, the vessel named United Leadership was added as additional collateral on April 28, The lender under the Danish Ship Offshore Credit Facility is Danish Ship Finance A/S. Danish Ship Finance A/S is the agent and security trustee. United Leadership, Inc. is a party to a guarantee dated as of April 28, 2016, pursuant to which it undertook to guarantee the Debtors obligations in connection with the Danish Ship Offshore Credit Facility. Danish Ship Tanker Credit Facility. Debtors United Leadership, Inc. and United Kalavryta Inc. (the UL-UK Debtors ) are borrowers under that certain senior secured credit facility, dated as of February 28, 2014, utilized to finance the purchase of the vessels named United Leadership and United Kalavryta (the Danish Ship Tanker Credit Facility ). The Danish Ship Tanker Credit Facility has a term of seven 7 years with a rate of Libor + 1.8%. As of the Petition Date, the unpaid principal balance on the Danish Ship Tanker Credit Facility was approximately $35,285,720. The UL-UK Debtors obligations under the Danish Ship Tanker Credit Facility are secured by liens on the vessels, including assignment of insurance and charters. The lender under the Danish Ship Tanker Credit Facility is Danish Ship Finance A/S. Danish Ship Finance A/S is the agent and security trustee. Toisa is a party to a guarantee dated as of March 4, 2014, pursuant to which it undertook to guarantee the UL-UK Debtors obligations in connection with the Danish Ship Tanker Credit Facility. Danish Ship Bulker Credit Facility. Debtors Trade Vision, Inc. and Trade Will Inc. (the TV-TW Debtors ) are borrowers under that certain senior secured credit facility, dated as of March 22, 2013, utilized to finance the purchase of the vessels named Trade Vision and Trade Will (the Danish Ship Bulker Credit Facility ). The Danish Ship Finance Bulker Credit Facility has a term four (4) years and nine (9) months and a rate of Libor %. As of the Petition Date, the unpaid principal balance on the Danish Ship Bulker Credit Facility was approximately $22,000,000. The TV-TW Debtors obligations under the Danish Ship Bulker Credit Facility are secured by liens on the vessels, including assignment of insurance and charters. The lender under the Danish Ship Tanker Credit Facility is Danish Ship Finance A/S. Danish Ship Finance A/S is the agent and security trustee. Toisa is a party to a guarantee dated as of March 27, 2013, pursuant to which it undertook to guarantee the TV-TW Debtors obligations in connection with the Danish Ship Bulker Credit Facility. 3. Newbuilds Silo (r) Citi Newbuilding Tanker Credit Facility. Citi Newbuilding Tanker Credit Facility. Toisa is a borrower under that certain senior secured credit facility, dated as of June 14, 2016, utilized to finance the construction of a total of six (6) vessels: three (3) Aframax tankers and (3) Suezmax tankers (the Citi Newbuilding Tanker Credit Facility ). The Citi Newbuilding Tanker Credit Facility has a term of seven (7) years post-delivery or up to 9.5 years from signing, and a rate of Libor % for the Citi tranche and 4.35% of the Cexim tranche. The unpaid principal balance on the Citi Newbuilding Tanker Facility was approximately $24,034,500. As of the Petition Date, Toisa s obligations under the Citi Newbuilding Tanker Credit Facility are secured by an assignment of the shipbuilding contract and refund guarantees and will be secured by liens on the vessels when delivered, including assignment of insurance and charters. The lenders under the Citi Newbuilding Credit Tanker Facility are Citi and Cexim. Citi Europe PLC is agent and security trustee. T&T and certain of its subsidiaries are parties to a guarantee dated as of June 14, 2016, pursuant to which they undertook to guarantee the Toisa obligations in connection with the Citi Newbuilding Credit Tanker Facility. 11

29 Pg 29 of Additional Non-Vessel Related Silos (s) G550 Silo G550 Airplane Credit Facility. A Gulfstream Aerospace GV-SP G550 (the G550 Airplane ) is held in trust on behalf of Toisa. Non-Debtor Bank of Utah, as owner trustee and registered owner, ( BoU ) is a borrower under that certain senior secured credit facility, dated as of June 16, 2015, utilized to finance the acquisition the G550 Airplane (the G550 Airplane Credit Facility ). The G550 Airplane Credit Facility has a term of eight (8) years and a rate of Libor %. As of the August 11, 2017, the unpaid principal balance on the G550 Airplane Credit Facility was $16,961,476. BoU s obligations under the G550 Airplane Credit Facility are secured by a lien on the G550 Airplane, including assignment of insurance. The lender under the G550 Airplane Credit Facility is Citizens Asset Finance, Inc. Toisa is a party to a guarantee pursuant to which it undertook to guarantee the BoU s obligations in connection with the G550 Airplane Credit Facility. 5. General Unsecured Creditors As is common in the shipping industry, the Debtors have very few unsecured creditors because the Management Companies oversee, manage, and exercise a degree of control over the operations of the Debtors vessels on a day to day basis to ensure that the obligations arising on or before the Petition Date had otherwise been paid in the ordinary course, including, but not limited to, all operating expenses, vendor claims and employee-related costs. The Debtors are reviewing the asserted unsecured claims as of the Petition Date to determine whether the creditors were paid or otherwise satisfied in the ordinary course by the non-debtor Management Companies. C. Events Leading to the Debtors Need to Restructure Starting in the summer of 2014, oil prices began to decline significantly. This unexpected decline in oil prices, and the resulting decrease in capital expenditures by oil exploration and production ( E&P ) companies, led to a significant reduction in demand for the Debtors offshore supply vessels. In the 18 months prior to the Petition Date, the Debtors utilization rate for its offshore supply vessels has dropped from 85% in 2014 to well below 50% as of the Petition Date, and the Debtors have, at times, been forced to accept rates below certain vessel s operating expenses to maintain customer relationships and goodwill. Owing to their strong liquidity position at the onset of the decline in oil prices continued strong earnings from their tanker fleet, and relatively moderate leverage position, the Debtors were able to weather these adverse market conditions while many of their competitors and other companies involved in the offshore oil and gas sector experienced financial difficulties. The Debtors are a diversified enterprise with vessels operating in three distinct sectors: offshore, wet (tankers) and dry (bulkers). As the shipping and offshore markets have cyclical risk, a diversified fleet softened some of the impact of the depressed oil market. Due to the prolonged duration of the slump in oil prices as well as the sudden material decline in tanker rates during late summer of 2016, the Debtors began to experience significant cash flow pressure and projected that continued repayment of principal as scheduled would result in cash being exhausted by the middle of In the fall of 2016, the Debtors asked their lender group to negotiate a standstill agreement, which would have would allowed time for a consensual workout and preserve sufficient liquidity to weather the persistent weak market conditions. Although certain of the Debtors lenders appeared to be receptive to entering a standstill agreement, others were not. During this period, in anticipation of a restructuring, the Company did not make principal payments to certain of its lenders due in September 2016 and has not made them since. On or about December 12, 2016, Citi issued an Acceleration and Demand Notice. Shortly thereafter, on or about December 24, 2016 Citi caused the Debtors tanker United Journey to be arrested in St. Eustatius in the Caribbean Netherlands. 12

30 Pg 30 of 88 After Citi caused the United Journey to be arrested, several of the Debtors other lenders (including, among others, DNB Bank ASA, BNP Paribas SA, Danish Ship Finance A/S and Commonwealth Bank of Australia) issued similar acceleration and demand notices. Although they did not arrest any vessels, several lenders pursued or threatened certain other enforcement actions. The Debtors met with a group of their lenders in London on January 12, 2017 and committed to work toward a consensual resolution. For those discussions to succeed, it was important to obtain a stay of further enforcement actions. Such agreements were not reached and threat of further vessel seizures loomed. These cases were filed on January 29, 2017 to streamline that process without the risk of seizure and to provide a single forum for restructuring negotiations to continue. III. THE CHAPTER 11 CASES A. First Day Motions To ease their transition into chapter 11 and to expedite their emergence from chapter 11, on the Petition Date, the Debtors filed various first day motions. In particular, the Debtors filed motions requesting permission for administrative relief, including motions directing joint administration, authorizing the filing of a consolidated creditor list and establishing certain notice procedures, and authorizing an extension to file schedules and statements. The Bankruptcy Court entered final orders approving these motions on January 31, Pursuant to another first day motion, the Debtors sought relief under sections 105(a), 362, 365, and 525 of the Bankruptcy Code, enforcing and restating the automatic stay, ipso facto, and nondiscrimination provisions of the Bankruptcy Code for the purposes of protecting the Debtors and their assets from improper actions, particularly by parties in foreign jurisdictions who are not familiar with the Bankruptcy Code or its protections, and who might unwittingly otherwise violate those sections. On January 30, 2017, the Bankruptcy Court entered the Order Under Sections 105(a), 362, 365, and 525 of the Bankruptcy Code Enforcing and Restating Automatic Stay, Ipso Facto, and Non-Discrimination Provisions [Dkt. No. 14] (the Automatic Stay Order ). Additionally, the Debtors filed a motion to continue operating their business, including, among others, motions to continue using their Management Companies and their existing cash management system. On February 1, 2017, the Bankruptcy Court granted the motion on an interim basis [Docket No. 17] (the Interim Cash Management Order ). The Bankruptcy Court then entered ten subsequent interim orders authorizing the Debtors to continue using their existing cash management systems on though September 14, 2017 [See Dkt. Nos. 40, 57, 79, 92, 101, 135, 168, 219 and 261]. The socalled Bridge Orders were necessary as the Debtors negotiated cash collateral stipulations with their secured lenders. The Interim Cash Management Orders also (i) authorized the Management Companies to make disbursements for the Debtors ordinary course business purposes, which included the day to day direct operating expenses of the Debtors fleet, as well as the Management Companies own agreed-upon operating expenses, (ii) required that all charter receipts and other monies received on account of the operation of the Debtors vessels be deposited by the Debtors and any of the Management Companies promptly into the accounts identified by the applicable lenders, and (iii) authorized Toisa Limited to pay the Debtors allowed professionals fees and expenses in accordance with the terms and conditions set forth in the Compensation Orders 3 entered during the Chapter 11 Cases. 3 See Order Under Bankruptcy Code Sections 105(a) and 331 Establishing Procedures for Interim Compensation and Reimbursement of Expenses of Professionals [Dkt. No. 37] and Order Pursuant to 11 U.S.C. 105(A), 327, 330 and 331 Authorizing the Debtors to Employ and Compensate Professionals Utilized in the Ordinary Course of Business Nunc Pro Tunc to the Petition Date [Dkt. No. 83] (collectively, the Compensation Orders ). 13

31 Pg 31 of 88 B. Retention of Restructuring and Other Professionals To assist the Debtors in carrying out their duties as debtors-in-possession and to represent their interests in the Chapter 11 Cases, the Debtors obtained Bankruptcy Court approval to retain (i) Togut, Segal & Segal LLP as their counsel (the Togut Firm ) [Dkt No. 38] and (ii) Kurtzman Carson Consultants LLC ( KCC ) as Claims and Noticing Agent and as Administrative Agent for the Debtors [Dkt. Nos. 16 and 54, respectively]. On April 12, 2017, the Debtors filed applications to retain and employ (i) Moore Stephens LLP ( Moore Stephens ) as auditor and Tax Consultant to the Debtors, nunc pro tunc to the Petition Date [Dkt. No. 109]; (ii) Moore Stephens AE ( Moore Stephens Greece ) as auditor to the Debtor Toisa Limited nunc pro tunc to the Petition Date, [Dkt. No. 109] and (iii) Scura Paley Securities LLC ( Scura Paley ) as their financial advisor [Dkt. No. 113]. Subsequently, on April 21, 2017, Debtors filed an application to retain and employ PJT Partners LP ( PJT ) as the investment banker to the Debtors nunc pro tunc to April 11, 2017 [Dkt. No. 117]. On May 5, 2017, the Bankruptcy Court authorized the retention of Moore Stephens Greece and Moore Stephens as auditors for the Debtors [Dkt. Nos. 140 and 141]. The Bankruptcy Court then entered interim orders approving the retention Scura Paley on May 5, 2017 [Dkt. No. 142] and May 22, 2017 [Docket No. 176], and PJT on May 22, 2017 [Dkt. No. 175]. On June 26, 2017, Maritime Strategies International Ltd ( MSI ) was retained as the Debtors maritime consultant nunc pro tunc to May 23, 2017 [Dkt. No. 220]. Scura Paley s and PJT s retentions were approved by the Bankruptcy Court on a final basis on July 24, 2017 [Docket No. 251 and 250, respectively], and, on August 2, 2017, the Bankruptcy Court approved the Debtors retention of Zolfo Cooper, LLC ( Zolfo Cooper ) as Bankruptcy Consultants and Special Financial Advisors to the Debtors nunc pro tunc to June 21, 2017 [Dkt. No. 267]. In addition, the Bankruptcy Court granted the Debtors the authority to utilize the services of various additional professionals as ordinary course professionals to assist the Debtors. [Dkt. No. 83]. C. Use of Cash Collateral As of the Petition Date, without access to cash collateral as that term is defined in section 363 of the Bankruptcy Code (which includes, but is not limited to, any and all cash of any kind, whether in reserved accounts, blocked accounts or otherwise) (the Cash Collateral ), the Debtors needed access to liquidity to continue to operate their businesses and pay restructuring costs associated with the Chapter 11 Cases. The Debtors determined that access to the Cash Collateral was necessary to ensure sufficient working capital and liquidity to operate the Debtors businesses and thus preserve and maintain the going concern value of the Debtors estates. Accordingly, in connection with the entry of the first day Automatic Stay Order, the Debtors and Citi engaged in negotiations regarding the release of a tanker, the United Journey, as well as the Debtors post-petition use of cash collateral in connection with the United Journey and the United Seas (the other tanker financed under the Citi Tanker Facility) in which Citi asserted an interest. In exchange for the adequate protection granted to Citi pursuant to several cash collateral orders [Dkt. Nos. 39, 80, 128], Citi agreed to cause the United Journey s release. Shortly after the release of the United Journey, the Management Company was able to procure a charter for the United Journey in the spot market. On March 14, 2017, the Debtors filed a motion seeking authority to use the Cash Collateral of the United Grace, a tanker, and offshore vessels, Toisa Vigilant, Toisa Valiant and Toisa Voyager, all of which were financed by Credit Agricole (the Credit Agricole Cash Collateral Motion ) [Dkt. No. 70]. As with Citi, the relief sought in the Credit Agricole Cash Collateral Motion advanced the Debtors efforts in obtaining post-petition liquidity, which was essential for the Debtors in order for them to continue operating their business in the ordinary course during the Chapter 11 Cases. The Bankruptcy 14

32 Pg 32 of 88 Court approved the Credit Agricole Cash Collateral Motion on an interim basis on March 17, 2017, and a final order was entered on March 29, 2017 [Dkt. No. 91]. Early on, the Debtors recognized the inefficiency of having as many as 17 separate groups or silos with obligations owed to separate lenders under separate loan facilities secured by various vessels. Accordingly, the Debtors deemed it desirable to deal with a lender group with one voice and one set of professionals, at least in the first instance. Starting with the group of lenders who had met with the Debtors in London in January 2017 prior to the commencement of the Chapter 11 Cases, a steering committee of fifteen lenders ultimately organized themselves as the Informal Committee of Secured Lenders (the Informal Committee ). In addition to adopting by-laws and appointing co-chairs, the Informal Committee selected Cadwalader, Wickersham & Taft LLP ( Cadwalader ) as their bankruptcy counsel, Watson Farley & Williams LLP, as their maritime and U.K. counsel, and AMA Capital Partners LLC ( AMA ) as their financial advisor. The Debtors then negotiated an omnibus cash collateral order with the Informal Committee on behalf of 15 different silos. On April 28, 2017, the Debtors filed a motion seeking authority to use the cash collateral of the lenders comprising the Informal Committee (the Informal Committee Cash Collateral Motion ) [Dkt. No. 126]. The Bankruptcy Court approved the relief sought in the Informal Committee Cash Collateral Motion on an interim basis on May 4, 2017 [Dkt. No. 137] and May 22, 2017 [Dkt. No. 173], and on a final basis on July 18, 2017 (the Informal Committee Cash Collateral Order ) [Dkt. No. 246]. Pursuant to the Informal Committee Cash Collateral Order, the Debtors agreed to pay the reasonable fees and expenses of the Informal Committee s professionals in recognition of the efficiency to be achieved with one set of professionals. See Dkt. No. 246 at 6.b. In connection with obtaining the Informal Committee Cash Collateral Order on a final basis, the Debtors also agreed to milestones in that the Debtors would (i) deliver a term sheet for a plan of reorganization to the Informal Committee by July 15, 2017 and (ii) file a plan of reorganization no later than August 15, 2017 [Dkt. No. 246 at 22.z. and aa]. D. Citizens Lift Stay Motion On February 14, 2017, Citizens Asset Finance, Inc. ( Citizens ) filed a Precautionary Motion for Relief from the Automatic Stay Pursuant to 11 U.S.C. Section 362 [Dkt. No. 32] (the Citizen s Motion ) seeking to modify the stay so that the G550 Airplane could be re-possessed on the basis that there was insufficient equity in the G550 Airplane and that it was not necessary for the Debtors reorganization. On March 10, 2017, the Debtors filed their Objection to the Citizen s Motion [Dkt. No. 61]. On March 14, 2017, Citizens filed a Reply to the Debtors Objection [Dkt. No. 69]. Since then, the parties have engaged in settlement discussions and agreed to adjourn the hearing to consider the Citizen s Motion to allow for discovery and settlement discussions to continue. Currently, a hearing on Citizen s Motion is scheduled for September 14, Notwithstanding the relief sought in the Citizen s Motion, the Debtors intend to reinstate the G550 Airplane Credit Facility under the Plan and continue to use the G550 Airplane in connection with the Debtors business operations. E. Claims Process and Bar Date 1. Schedules and Statements In addition to the first day relief authorizing an initial extension to file the Debtors schedules of assets and liabilities, statements of financial affairs, and schedules of executory contracts and unexpired leases (the Schedules ), the Debtors filed a motion for entry of an order under sections 105(a) and 521 of the Bankruptcy Code, Rules 1007(a)(3), 1007(c), (d) and 9006(b) of the Bankruptcy Rules, and Rule of the Local Bankruptcy: (i) granting the Debtors additional time to file their Schedules and Statements for seventeen (17) days until March 31, 2017; and (ii) granting the Debtors additional time to file reports of financial information on entities in which a chapter 11 estate holds a controlling or substantial interest pursuant to Bankruptcy Rule (the Reports ) for twenty-one (21) days 15

33 Pg 33 of 88 until April 18, 2017 [Dkt. No. 62]. The relief was granted [Dkt. No. 95], and the extensions helped improve the accuracy and usefulness of the Schedules. On March 31, 2017, the Debtors filed the Schedules. On April 18, 2017, the Debtors file their Reports. 2. Bar Date On June 9, 2017, the Bankruptcy Court entered an order establishing the following deadlines for filing proofs of Claim against the Debtors and prescribing the form and manner thereof: (i) August 8, 2017 at 5:00 p.m. (prevailing Eastern time) (the General Bar Date ) for all creditors unless they fall within one of the exceptions; (ii) the later of (a) the General Bar Date and (b) 5:00 p.m. (prevailing Eastern time) on the date that is 60 days after entry of a Court order pursuant to which executory contracts or unexpired leases are rejected for claims arising from such rejected agreements; (iii) the later of (a) the General Bar Date and (b) 5:00 p.m. (prevailing Eastern time) on the date that is 60 days after the date that notice of any applicable amendment or supplement to the Schedules is served on a claimant for those claims affected by any such amendment or supplement to the Schedules; and July 28, 2017 at 5:00 p.m. (prevailing Eastern time) for governmental units [Dkt. No. 198] (collectively, the Bar Date ). 3. Overview of Claims As of the General Bar Date, 116 proofs of claim were filed against the Debtors asserting an aggregate liability in excess of $1.694 billion in claims, as well as unliquidated and amounts denominated in foreign currency, as follows: Class Number Amount Administrative Claims 1 $2,155 Secured Claims 19 $166,128,505, as well as unliquidated amounts Priority Tax 14 $491,417,547 Priority Claims 52 $295,550, as well as unliquidated and foreign denominated amounts General Unsecured Claims 58 $1,035,676,485, as well as unliquidated and foreign denominated amounts 4. Claims Objections The Debtors are reviewing whether there is a basis to object to any of the filed claims as already having been satisfied or duplicative, as well as to the extent to which the claims may otherwise be subject to reduction or disallowance on the basis of the Debtors defenses, offsets, and counterclaims. Currently, the Debtors anticipate that there will be few, if any, Allowed General Unsecured claims. (a) Secured Claims Of the filed claims, 17 are secured claims filed by lenders in connection their credit facilities securing the Debtors vessels, which the Debtors intend to resolve by virtue of the proposed treatment of such silo claims under the Plan described below. (b) Priority Tax and IRS Claims As of the Bar Date, the Internal Revenue Service ( IRS ) has filed 15 Claims in the Chapter 11 Case which could significantly impact the Debtors estates (the IRS Claims ). The IRS Claims seek a total of $491,417, as Priority Tax Claims and another $357,553, as additional 16

34 Pg 34 of 88 General Unsecured Claims. At this point, the Debtors dispute the validity of the IRS Claims and intend to contest each of these claims. Specifically, with respect Proof of Claim No. 1 asserted against Debtor Trade Vision, Inc. (an aggregate of $5,897, in Priority Tax Claims for taxes and penalties, and an additional $30,234 in General Unsecured Claims for certain penalties plus interest, which includes a $1,000,000 tax assertion); Proof of Claim No. 2 asserted against Debtor United Honor, Inc. (an aggregate of $12,546,742 in Priority Tax Claims); Proof of Claim No. 3 asserted against Debtor United Ideal, Inc. (aggregate of $34,046,138 in Priority Tax Claims for taxes and penalties, and an additional $1,711,588 as General Unsecured Claims for certain penalties plus interest); Proof of Claim No. 4 asserted against Debtor United Kalavryta, Inc. (an aggregate of $15,326,252 in Priority Tax Claims); Proof of Claim No. 5 asserted against Debtor United Banner, Inc. (an aggregate of $8,128,962 in Unsecured Priority Tax Claims); Proof of Claim No. 6 asserted against Debtor United Courage, Inc. (an aggregate of $8,794,194 in Priority Tax Claims); Proof of Claim No. 9 asserted against Debtor United Ambassador, Inc. (an aggregate of $7,500,022 in Priority Tax Claims); Proof of Claim No. 10 asserted against Debtor United Dynamic, Inc. (an aggregate of $18,777,590 in Priority Tax Claims); Proof of Claim No. 19 asserted against Debtor Trade Quest, Inc. (an aggregate of $1,325,527 in Priority Tax Claims); Proof of Claim No. 20 asserted against Debtor United Seas Inc. (an aggregate of $1,284,777 in Priority Tax Claims); Proof of Claim No. 21 asserted against Debtor United Leadership Inc. (an aggregate of $14,139, in Priority Tax Claims); Proof of Claim No. 22 asserted against Debtor Trade Resource, Inc. (an aggregate of $2,074,729 in Priority Tax Claims); Proof of Claim No. 23 asserted against Debtor United Emblem, Inc. (an aggregate of $13,678,473 in Priority Tax Claims), the Debtors contend the relevant Debtor did not generate any taxable United States related activities or presence in any of the relevant tax years for the following reasons (among other items): either (A) as a result of having no physical presence in the United States during those tax years, (B) as a result of not being treated as engaged in any United States activities due to the proper application of Section 638 of the of Section 638 of the Internal Revenue Code of 1986, as amended (the Tax Code ) and the applicable Treasury Regulations thereunder and existing legal authority with respect thereto, or (C) due to eligibility for the reciprocal exemption from tax under Section 883 of the Tax Code. Further, to the extent the IRS Claims relate to tax year 2016, United States federal income tax returns recently filed by the Debtors (or to be filed) with respect to any United States related activities have properly claimed exemptions from United States federal income tax under the reciprocal exemption from tax pursuant to Section 883 of the Tax Code. Accordingly, the Debtors request that the Proof of Claims Nos. 1, 2, 3, 4, 5, 6, 9, 10, 19, 20, 21, 22 and 23 be withdrawn in their entirety. As to Proof of Claim No. 8 asserted against Debtor Toisa Horizon, Inc., the IRS has claimed that Toisa Horizon, Inc., a Liberian corporation, has a missing IRS Form 1120F income tax return for the 2015 tax year (with respect to which the IRS has asserted a claim for $6,757, in tax plus interest of $237, through the Petition Date), and tax due in connection with its audit examination of the taxpayer for the 2010 tax year (with respect to which the IRS has asserted a claim for $30,069,992 in tax due plus $6,278, in interest through the petition date), as a result of which the IRS has filed a Proof of Claim in the aggregate amount equal to $52,404,980.03, of which $43,343, represents Unsecured Priority Tax Claims (including interest) and an additional $9,061, represents General Unsecured Claims (which includes penalties and interest on the Priority Tax Claims). The Debtors contend these claims with respect to the missing Form 1120F are estimates, which have been inflated based on assumptions made by the IRS as to the taxpayer s United States source income. Specifically, Toisa Horizon, Inc. owns a vessel that operates worldwide, and its gross income for the tax year in which a tax returns were not filed or periods which are not otherwise subject to an existing IRS examination was generated wholly outside of the United States. Because Toisa Horizon, Inc. had no United States source income for the 2015 tax year no tax return has been filed. Toisa Horizon, Inc. is also currently under examination by the IRS with respect to tax year Notwithstanding this examination and the anticipated Notice of Proposed Adjustment that we expect will be issued by the IRS for tax year 2010, Toisa Horizon, Inc. believes that it had no taxable United States related activities or presence in this tax year, for the following reasons (among other items): either (A) as a result of having no physical presence in the United States during that tax year, (B) as a result of not being treated as engaged in any United States activities due to the proper application of Section 638 of the Tax Code, and the applicable Treasury Regulations thereunder and existing legal authority with respect thereto, (C) due to the application of the United States Convention with Greece for Avoidance of Double Taxation and 17

35 Pg 35 of 88 Prevention of Fiscal Evasion with Respect to Taxes on Income, or (D) due to eligibility for the reciprocal exemption from tax under Section 883 of the Tax Code. As a result, the Debtors have requested that Proof of Claim No. 8 asserted against Debtor Toisa Horizon, Inc. be withdrawn in its entirety. As to Proof of Claim No. 7 asserted against Debtor Toisa Limited, the IRS has claimed that Toisa Limited, a Bermuda corporation, has missing IRS Form 1120F income tax returns for tax years 2011 through 2016, and, in connection with those missing returns and its initiated examination of the taxpayer for the tax years 2007 through 2010, the IRS has filed a Proof of Claim in the aggregate amount equal to $304,554, in Priority Tax Claims (including interest) and an additional $346,750, in General Unsecured Claims (which includes penalties and interest on the Priority Tax Claims and General Unsecured Claims). The Debtors contend that that these claims represent estimates, which have been inflated based on assumptions made by the IRS as to the taxpayer s United States source income. The Debtors own vessels that operate worldwide, and their gross income for tax years in which tax returns were not filed or periods which are not otherwise subject to an existing IRS examination was generated outside the United States. The Debtors contend to the extent the Debtor had no United States source income for the tax years at issue then no tax returns would have been filed. Further, for tax year 2016, it is our understanding that Toisa Limited did not have any United States source income and consequently a United States income tax return has not been filed. Toisa Limited is currently under examination with respect to tax years 2007 through Notwithstanding this examination, Toisa Limited believes that it had no taxable United States related activities or presence in any of those tax years, for the following reasons (among other items): either (A) as a result of having no physical presence in the United States during those tax years, (B) as a result of not being treated as engaged in any United States activities due to the proper application of Section 638 of the Tax Code and the applicable Treasury Regulations thereunder and existing legal authority with respect thereto, or (C) due to eligibility for the reciprocal exemption from tax under Section 883 of the Tax Code. As a result, the Debtors have requested that Proof of Claim No. 7 asserted against Debtor Toisa Limited be withdrawn in its entirety. Currently, the Debtors anticipate that there will not be any liability on account of the IRS Claims. To the extent the IRS Claims are not withdrawn or otherwise favorably resolved, the Debtors intend to object to the IRS claims. (c) Employee Claims There are 52 claims filed as employee or crew member claims to which the Debtors are reviewing to determine if the Debtors will object as either having (i) been satisfied by the Management Companies, or alternatively, (ii) no liability since the Debtors do no not have employees, and the employees or crew members are actually in the employ of the Management Companies. Currently, the Debtors do not anticipate that there will be liability on account of such claims. (d) Trade Vendor Claims There are 22 claims filed as trade vendor and supplier claims which the Debtors are reviewing to determine if the Debtors will object as either having (i) been satisfied by the Management Companies, or alternatively, (ii) no liability of the since certain of the creditors may actually be creditors of the Management Companies, rather than the Debtors. The Debtors will also review if the claims may otherwise be subject to reduction or disallowance on the basis of the Debtors defenses, offsets, and counterclaims. Currently, the Debtors do not anticipate that there will be liability on account of such claims. (e) The HHI Arbitration and Other Contract Claims On January 31, 2013, Toisa as buyer and HHI as builder entered into a Shipbuilding Contract (the HHI Contract ) for the vessel referred to as Hull 2649 (the HHI Vessel ). Pursuant to Article VII.1 of the Contract, HHI undertook to deliver the HHI Vessel to the Debtors by July 31, By March 8, 2016, the Debtors had not yet received delivery and pursuant to Article III.1(c) of the HHI 18

36 Pg 36 of 88 Contract had the right to cancel the Contract. On April 28, 2016, the Debtors served a written notice of cancellation by and letter upon HHI lawfully cancelling the HHI Contract. As a result of the lawful cancellation of the HHI Contract, HHI is liable to repay the Debtors pre-delivery installment payments in the sum of $67,500,000, together with interest and other costs that collectively approach approximately $90 million in refund costs (the HHI Refund ). On August 1, 2016 HHI filed a statement of claim (the HHI Claim ) commencing arbitration under the London Maritime Arbitrators Association Terms (the HHI Arbitration ). The HHI Claim alleges, among other things, that the Debtors wrongfully cancelled the HHI Contract and unjustifiably refused to take delivery of the HHI Vessel. The Debtors filed defense and counterclaims submissions on November 14, The parties agreed to proceed with the HHI Arbitration consistent with the stipulation and agreed order approved by the Bankruptcy Court on March 20, 2017 (the HHI Stipulation and Agreed Order ) [Dkt. No. 82]. The Stipulation and Agreed Order modified the stay for the limited purpose of allowing the parties to litigate the HHI Arbitration to judgment with the understanding that should any judgment be awarded in favor of HHI, that HHI would be stayed from seeking to enforce such judgment without further order of the Court. The HHI Arbitration is scheduled for Currently, the Debtors do not anticipate the HHI Arbitration will result in liability to be assessed against the Debtors and anticipate an affirmative recovery in connection with the HHI Refund. On April 29, 2014, Toisa as buyer and Shanghai Zhenhua Heavy Industries Col, Ltd. ( ZPMC ) entered into a shipbuilding contract (the DSV Vessel Contract ) for the vessel referred to Hull ZPMC1075 (the DSV Vessel ). Pursuant to DSV Vessel Contract as amended, the seller undertook to deliver the DSV Vessel to the Debtors by January 31, As of August 15, 2017, the Debtors have not yet received delivery, and pursuant to Article III.1(c) of the DSV Vessel Contract, the Debtors reserve the right to cancel the DSV Vessel Contract per the contract s terms. If the DSV Vessel Contract is rejected by the Debtors or are otherwise liquidated, there could be an unsecured claim for the balance of the purchase price subject to mitigation. In that connection, ZPMC filed Proof of Claim 108 in the amount $149,823,000. Currently, the Debtors do not anticipate, subject to other prevailing circumstances, that a cancellation by the buyer of the DSV Vessel Contract per the terms of the contract wold result in any liability to be assessed against the Debtors. Instead, it is anticipated that such a cancellation would result in an affirmative recovery in connection with any pre-delivery installments paid to ZPMC pursuant to the DSV Vessel Contract. On January 13, 2015, Toisa as buyer and China Shipbuilding & Offshore International Co., Ltd and Qindao Wuchuan Heavy Industries as sellers entered into shipbuilding contracts (the ROV Vessel Contracts ) for the vessels referred to as Hull BH0001A10M and Hull BH0002A10M (the ROV Vessels ). Per the ROV Vessel Contracts as amended, the sellers undertook to deliver the ROV Vessels to the Debtors June 15, 2017 and October 15, 2017, respectively. As of August 15, 2017, the Debtors have not yet received delivery, and pursuant to Article III.1(c) of the ROV Vessel Contracts, upon a failure to deliver, the Debtors reserve the right to cancel the ROV Vessel Contracts per the contracts terms. If the ROV Vessel Contracts are rejected by the Debtors or are otherwise liquidated, there could be an unsecured claim for damages for the unpaid balance of the purchase price subject to mitigation. In that connection, China Shipbuilding & Offshore International Co., filed Proofs of Claims 88 and 89 filed in unliquidated amounts. Currently, the Debtors do not anticipate that a cancellation by the buyer of the ROV Vessel Contracts per the terms of the contracts would result in any liability to be assessed against the Debtors. Instead, it is anticipated that such a cancellation would result in an affirmative recovery in connection with any pre-delivery installments paid to China Shipbuilding & Offshore International Co., Ltd and Qindao Wuchuan Heavy Industries pursuant to the DSV Vessel Contract. On June 2, 2015, T&T as buyer and China Shipping Industry Co., Ltd ( China Overseas Shipping ) and China Shipping Industry (Jiangsu) Co., as sellers entered into a shipbuilding contract for three (3) Aframax tankers and (3) Suezmax tankers vessels, referred to as the Newbuild Tanker Construction Contracts in the Plan, and which is the subject on the Citi Newbuilding Tanker Credit Facility. The Debtors intend to resolve any claims asserted as arising under Newbuild Tanker Construction Contracts and Citi Newbuilding Tanker Credit Facility through the Newbuild Tanker Sale Transaction and treatment as set forth in the Plan. 19

37 Pg 37 of 88 (f) Personal Injury Claims and Claims Otherwise Subject to Insurance Ioannis N. Pelagidis filed Proof of Claim No. 12 against Debtor United Ambassador, Inc. on account of an alleged personal injury claim asserting in aggregate damages of $20,000,000 ($19,987,150 and a general unsecured claim and $12,850 as a priority claim) (the Pelagidis Claim ), as well as 23 other duplicative claims against the Debtors. On July 27, 2017, Pelagidis filed a motion pursuant to section 362 of the Bankruptcy Code, for an order modifying the automatic stay to allow personal injury action to be commenced and proceed to judgment (the Pelagidis Motion ) [Dkt. No. 260] on the basis that recovery under a judgment, if any, would be limited to available insurance proceeds, thus there would not be any impact on the Debtors estates prejudicial to any other interests in these Chapter 11 Cases. Paul Hebert filed Proof of Claim No. 27 against Debtor Toisa Limited on account of an alleged a personal injury claim asserting aggregate damages of $25,000,000 (the Hebert Claim ). The Debtors believe the Hebert Claim is the subject of insurance, and is otherwise the subject of undertaking from BP America Inc. ( BP ), who was the Debtors charter counter-party under which charter the alleged personal injury claim occurred. BP has acknowledged it would indemnify Toisa for any liability as per their charter agreement. Accordingly, in connection with these claims, the Debtors have not included an exposure or a Debtor liability as part of their estimation of the pool of General Unsecured Claims. In addition to these claims, the Debtors are continuing to review if there are any other claims covered by insurance and/or indemnification and will pursue stipulations to lift the stay to eliminate potential liability for such litigation claims. To the extent such claims are not covered by insurance, the Debtors will consider developing a mediation protocol to resolve claims. With respect to such claims not covered by insurance policies or indemnification, the Debtors have estimated their exposure to claims, administrative proceedings, and litigation and have included these amounts in their estimation of the pool of General Unsecured Claims. Unexpected outcomes in both the costs and effects of these matters could result in an adverse effect on creditor recoveries. (g) Intercompany Claims Debtor Edgewater Offshore Shipping Limited asserted a claim against Toisa. The Debtors will likely have the claim withdrawn or otherwise reclassified as an Intercompany Claim under the Plan. Intercompany Claims are any and all Claims of a Debtor against another Debtor or non-debtor affiliate. Under the Plan such claims will be reinstated and not participate in distributions to be made on account of general unsecured claims, to the extent there are any. F. Appointment of Unsecured Creditors Committee On May 18, 2017, the Office of the United States Trustee for the Southern District of New York (the U.S. Trustee ) appointed an Official Committee of Unsecured Creditors (the Creditors Committee ). On June 12, 2017, the U.S. Trustee filed an amended Notice of Appointment of Official Committee of Unsecured Creditors [Dkt. No. 199]. The Creditors Committee was not formed until four and a half months into the Chapter 11 Cases. When the U.S. Trustee solicited interest in serving on an official committee of unsecured creditors, only four creditors indicated interest. Ultimately, a two-member Committee was appointed on May 18, See Dkt. No The Committee included: (1) China Overseas Shipping, whose contracts, the Newbuild Tanker Construction Contracts, the Debtors intend to assume as part of the Plan and (2) HHI, a shipbuilder whose claim is currently the subject of arbitration, as discussed. On August 8, 2017, the U.S. Trustee filed a Second Amended Appointment of Official Committee of Unsecured Creditors [Dkt. No. 272], and added a third member to the Creditors Committee, Shanghai Zhenhua Heavy Industries Col, Ltd. On August 15, 2017, orders were entered approving the retention of Sheppard, Mullin, Richter & Hampton, LLP as counsel for the Creditors Committee [Dkt. No. 278], and Klestadt Winters Jureller Southard & Stevens, LLP as conflicts counsel for the Creditors Committee [Dkt. No. 279]. 20

38 Pg 38 of 88 G. Plan Exclusivity Upon commencement of these Chapter 11 Cases, Section 1121(d) of the Bankruptcy Code provided the Debtors with the exclusive right to file and solicit a Chapter 11 plan through and including May 29, 2017 and July 28, 2017, respectively. On June 2, 2017, the Bankruptcy Court granted an extension of the Debtors exclusive periods, and the Debtors were granted the exclusive right to file a plan through and including August 28, 2017, and solicit votes through and including, October 26, 2017 [Dkt. No. 189]. The Debtors requested this extension to give them sufficient time to, among other things, reach accord with the Informal Committee, the Creditors Committee, and their other secured lenders on the consensual terms of a plan. The Debtors will seek a further request of this extension to solicit the Plan. H. Debtors Extension to Assume or Reject their Unexpired Leases of Nonresidential Real Property Section 365(d)(4)(b)(i) of the Bankruptcy Code permits the Debtors the right to extend the initial 120-day period (the Initial Period ) to assume or reject their unexpired leases of nonresidential real property by an additional ninety (90) days from May 29, 2017, up to and including August 28, 2017 (the Extension ) without prejudice to the Debtors rights to obtain further extensions of such periods in accordance with section 365(d)(4)(B)(ii) of the Bankruptcy Code. On June 2, 2017, the Bankruptcy Court granted an extension of the Debtors Initial Period through and including August 28, 2017 [Dkt. No. 190]. The Debtors intend to seek a further extension. I. Plan Negotiations With Prepetition Lenders Since the outset of these Chapter 11 Cases, the Debtors and their advisors have engaged in extensive discussions with the Informal Committee, Citi, Credit Agricole and certain other of the Debtors prepetition secured lenders, as well as their principals, financial advisors, and attorneys, as applicable, in an effort to reach a global resolution with respect to the Chapter 11 Cases. Additionally, where the Debtors thought it would be helpful to ongoing discussions, the Debtors and their advisors attended in-person meetings with the Informal Committee, their advisors and certain of the prepetition secured lenders. In particular, the Debtors and their advisors from the Togut Firm, PJT and Scura Paley attended in-person meetings in February, April and June in New York, and a meeting in London in June to meet with the Informal Committee and their advisors. As part of an ongoing dialogue with the Informal Committee, the Debtors have offered several plan proposals. The Informal Committee has responded that the Debtors proposals have not been acceptable and provided the Debtors with an Indicative Term Sheet. Although the Indicative Term Sheet did not provide terms, the Plan is responsive to the concepts raised in the Indicative Term Sheet. Thus, The Plan described in this Disclosure Statement is a plan of reorganization proposed by the Debtors in good faith, provides a path forward, and also comports with a milestone to which Debtors agreed as part of the final cash collateral order negotiated with the Informal Committee [See Dkt. No. 246 at 22.aa]. The Debtors intend to continue negotiations with the Informal Committee, their secured lenders, as well as the Creditors Committee on the terms of the Plan. It is therefore expected that this Plan will be amended. IV. SUMMARY OF THE PLAN OF REORGANIZATION The statements contained in this Disclosure Statement include summaries of the provisions contained in the Plan, a copy of which is annexed as Appendix A and in the documents referred to therein. The statements contained in this Disclosure Statement do not purport to be precise or complete statements of all the terms and provisions of the Plan or the documents referred to therein, and reference is made to the Plan and to such documents for the full and complete statements of such terms and provisions. The Plan itself and the documents referred to therein control the actual treatment of Claims against and Interests in the Debtors under the Plan and will, upon the Effective Date, be binding upon all holders of Claims against and Interests in the Debtors and their estates, the Reorganized Debtors, 21

39 Pg 39 of 88 and other parties in interest. In the event of any conflict between this Disclosure Statement, on the one hand, and the Plan or any other operative document, on the other hand, the terms of the Plan and such other operative document are controlling. A. Overview of Chapter 11 Chapter 11 is the principal business reorganization chapter of the Bankruptcy Code. Under chapter 11 of the Bankruptcy Code, a debtor is authorized to reorganize or liquidate its business for the benefit of itself, its creditors, and its interest holders. Another goal of chapter 11 is to promote equality of treatment for similarly situated creditors and similarly situated interest holders with respect to the distribution of a debtor s assets. The commencement of a chapter 11 case creates an estate that is comprised of all of the legal and equitable interests of the debtor as of the filing date. The Bankruptcy Code provides that the debtor may continue to operate its business and remain in possession of its property as a debtor in possession. The consummation of a plan is the principal objective of a chapter 11 case. The plan sets forth the means for satisfying claims against and interests in a debtor. Confirmation of a plan by the Bankruptcy Court makes that plan binding upon the debtor and any creditor of or equity security holder in the debtor, whether or not such creditor or equity security holder (i) holds a claim or interest that is impaired under the plan; (ii) has voted to accept or reject the plan; or (iii) receives or retains any property under the plan. In general, a chapter 11 plan divides claims and equity interests into separate classes, specifies the property that each class is to receive under the Plan, and contains other provisions necessary to implement the Plan. Under the Bankruptcy Code, claims and equity interests, rather than creditors and equity holders, are classified because creditors and equity holders may hold claims and equity interests in more than one class. Statements as to the rationale underlying the treatment of claims and equity interests under the Plan are not intended to, and will not, waive, compromise or limit any rights, claims or causes of action in the event the Plan is not confirmed. B. Plan Supplement The Debtors will file the Plan Supplement no later than ten (10) days prior to the deadline set to object to the Plan or such later date with respect to individual documents as the parties affected by such documents agree. The Plan Supplement consists of the compilation of documents and forms of documents, schedules and exhibits to the Plan. The Plan Supplement may be altered, amended, modified or supplemented from time to time in accordance with the terms of the Plan and in accordance with the Bankruptcy Code and the Bankruptcy Rules. C. Classification of Claims and Interests One of the key concepts under the Bankruptcy Code is that only claims that are allowed may receive distributions under a chapter 11 plan. This term is used throughout the Plan and the descriptions below. In general, an allowed claim or an allowed equity interest simply means that the debtor agrees, or in the event of a dispute, that the Bankruptcy Court determines, that the claim or equity interest, and the amount thereof, is in fact a valid obligation of the debtor. Section 502(a) of the Bankruptcy Code provides that a timely filed claim or equity interest is automatically allowed unless the debtor or other party in interest objects. However, section 502(b) of the Bankruptcy Code specifies certain claims that may not be allowed in bankruptcy even if a proof of claim is filed. These include, but are not limited to, claims that are unenforceable under the governing agreement between a debtor and the claimant or under applicable non-bankruptcy law, claims for unmatured interest, property tax claims in excess of the debtor s equity in the property, claims for services that exceed their reasonable value, real property lease and employment contract rejection damages in excess of specified amounts, late-filed claims, and contingent claims for contribution and reimbursement. In addition, Bankruptcy Rule 3003(c)(2) prohibits the allowance of any claim or equity interest that either is not listed on the debtor s schedules or is listed as disputed, contingent or unliquidated, if the holder has not filed a proof of claim or equity interest before the established deadline. 22

40 Pg 40 of 88 The Bankruptcy Code requires, for purposes of treatment and voting, that a chapter 11 plan divide the different claims against, and equity interests in, the debtor into separate classes based upon their legal nature. Claims of a substantially similar legal nature are not necessarily classified together, nor are equity interests of a substantially similar legal nature necessarily classified together. Because an entity may hold multiple claims and/or equity interests which give rise to different legal rights, the claims and equity interests themselves, rather than their holders, are classified. Under a chapter 11 plan, the separate classes of claims and equity interests must be designated either as impaired (affected by the Plan) or unimpaired (unaffected by the Plan). If a class of claims is impaired, the Bankruptcy Code affords certain rights to the holders of such claims, such as the right to vote on the Plan, and the right to receive, under the chapter 11 plan, no less value than the holder would receive if the debtor were liquidated in a case under chapter 7 of the Bankruptcy Code. Under section 1124 of the Bankruptcy Code, a class of claims or interests is impaired unless the Plan (i) does not alter the legal, equitable and contractual rights of the holders, or (ii) irrespective of the holders acceleration rights, cures all defaults (other than those arising from the debtor s insolvency, the commencement of the case or nonperformance of a nonmonetary obligation), reinstates the maturity of the claims or interests in the class, compensates the holders for actual damages incurred as a result of their reasonable reliance upon any acceleration rights, and does not otherwise alter their legal, equitable, and contractual rights. Pursuant to section 1126(f) of the Bankruptcy Code, holders of unimpaired claims or interests are conclusively presumed to have accepted the Plan. Accordingly, their votes are not solicited. Under the Plan, the following classes are unimpaired, and therefore, the holders of such Claims are conclusively presumed to have voted to accept the Plan: Class 1 (Other Priority Claims); Class 15 (G550 Airplane Credit Facility Claims); Class 16 (T&T General Unsecured Claims); Class 17 (Toisa General Unsecured Claims); Class 18 (Intercompany Claims); Class 19 (Interests in Toisa); and Class 20 (Intercompany Interests in Other Debtors). Under certain circumstances, a class of claims or equity interests may be deemed to reject a plan. For example, a class is deemed to reject a plan under section 1126(g) of the Bankruptcy Code if the holders of claims or equity interests in such class do not receive or retain property under the Plan on account of their claims or equity interests. Under the Plan, there is no class that will be not be reinstated otherwise not retain a property interest on account of their claims. Conversely, Class 2 (Existing Citi Tanker Credit Facility Claims); Class 3 (Existing Commerzbank I Credit Facility Claims); Class 4 (Existing Commerzbank II Credit Facility Claims); Class 5 (Existing Credit Agricole Tanker Credit Facility Claims); Class 6 (Existing Danish Ship Bulker Credit Facility Claims; Class 7 (Existing Danish Ship Tanker Credit Facility Claims); Class 8 (Existing DNB Tanker Credit Facility Claims); Class 9 (Existing ING Bulker Credit Facility Claims); Class 10 (Existing NBG Credit Facility Claims); Class 11 (Newbuild Tanker Credit Facility Claims); Class 12 (Existing DVB Credit Facility Claims); Class 13 Existing (Citizens I Credit Facility Claims) and Class 14 (Toisa Offshore Secured Claims) are impaired under the Plan and, therefore, the holders with respect thereto are entitled to vote to accept or reject the Plan. 1. Treatment Of Unclassified Claims In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims and Priority Tax Claims are not classified and are not entitled to vote on the Plan. (a) Administrative Claims Administrative Claims are the actual and necessary costs and expenses of administration during the Chapter 11 Cases pursuant to sections 328, 330, 363, 364(c)(1), 365, 503(b) or 507(a)(2) of the Bankruptcy Code. Except to the extent that a holder of an Allowed Administrative Expense Claim and the Debtors agree to different treatment On, or as soon as reasonably practicable after, the later of (a) the Effective Date, (b) the date on which an Administrative Claim becomes an Allowed Administrative Claim, or (c) the date on which an Allowed Administrative Claim becomes payable under any agreement relating thereto, each holder of such Allowed Administrative Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such Allowed Administrative Claim, Cash equal to the unpaid portion of such Allowed Administrative Claim; provided, that, Allowed 23

41 Pg 41 of 88 Administrative Claims representing liabilities incurred in the ordinary course of business by the Debtors shall be paid by the Debtors in the ordinary course of business, consistent with past practice and in accordance with the terms and subject to the conditions of any agreements governing, instruments evidencing or other documents relating to such transactions. Except as otherwise provided by a Final Order previously entered by the Bankruptcy Court (including the Bar Date Order) or as provided by Article II of the Plan, requests for payment of Administrative Claims, other than requests for payment of Professional Fee Claims, must be filed and served on the Debtors no later than the Administrative Claims Bar Date pursuant to the procedures specified in the Confirmation Order and the notice of entry of the Confirmation Order. Holders of Administrative Claims that are required to file and serve a request for payment of such Administrative Expense Claims and that do not file and serve such a request by the Administrative Claims Bar Date shall be forever barred, estopped, and enjoined from asserting such Administrative Claims against the Debtors or their property, and such Administrative Expense Claims shall be deemed compromised, settled, and released as of the Effective Date. The Reorganized Debtors must file and serve objections to Administrative Expense Claims on or before the Administrative Claims Objection Bar Date. (b) Professional Fee Claims Professionals shall submit final fee applications seeking approval of all Professional Fee Claims no later than thirty (30) days after the Effective Date. These applications remain subject to Bankruptcy Court approval under the standards established by the Bankruptcy Code, including the requirements of sections 327, 328, 330, 331, 363, 503(b) and 1103 of the Bankruptcy Code, as applicable. Any unpaid amounts owing to Professionals shall be made upon entry of an order approving such Professional Fee Claims. The Reorganized Debtors will be authorized to pay compensation for services rendered or reimbursement of expenses incurred after the Effective Date in the ordinary course without the need for Bankruptcy Court Approval. On the Effective Date, the Debtors or the Reorganized Debtors will establish and fund the Professional Fee Escrow Account with Cash equal to the Professional Fee Reserve Amount. (c) Priority Tax Claims The legal and equitable rights of the holders of Priority Tax Claims are Unimpaired by the Plan. Unless the holder of an Allowed Priority Tax Claim and the Debtors agree to a different treatment, on the Effective Date, each Holder of an Allowed Priority Tax Claim shall have such Claim Reinstated and each holder of an Allowed Priority Tax Claim shall receive Cash in an amount equal to such Allowed Priority Tax Claim on, or as soon thereafter as is reasonably practicable, the later of the Effective Date, the date such Allowed Priority Tax Claim is due and payable in the ordinary course, or as otherwise permitted under Section 1129(a)(9) of the Bankruptcy Code. 2. Classification and Treatment of Claims and Interests The following table designates the Classes of Claims and specifies which of those Classes are (a) Impaired or Unimpaired by the Plan, (b) entitled to vote to accept or reject the Plan in accordance with section 1126 of the Bankruptcy Code and (c) deemed to reject the Plan. In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims and Priority Tax Claims have not been classified and, thus, are excluded from the Classes of Claims and Interests set forth in Article III of the Plan. All of the potential Classes for the Debtors are set forth herein. Class Designation Impairment Entitled to Vote Class 1 Other Priority Claims Unimpaired No (deemed to accept) Class 2 Existing Citi Tanker Credit Facility Claims Impaired Yes Class 3 Existing Commerzbank I Credit Facility Claims Impaired Yes Class 4 Existing Commerzbank II Credit Facility Claims Impaired Yes Class 5 Existing Credit Agricole Tanker Credit Facility Claims Impaired Yes Class 6 Existing Danish Ship Bulker Credit Facility Claims Impaired Yes Class 7 Existing Danish Ship Tanker Credit Facility Claims Impaired Yes Class 8 Existing DNB Tanker Credit Facility Claims Impaired Yes 24

42 Pg 42 of 88 Class Designation Impairment Entitled to Vote Class 9 Existing ING Bulker Credit Facility Claims Impaired Yes Class 10 Existing NBG Credit Facility Claims Impaired Yes Class 11 Newbuild Tanker Credit Facility Claims Impaired Yes Class 12 Existing DVB Credit Facility Claims Impaired Yes Class 13 Existing Citizens I Credit Facility Claims Impaired Yes Class 14 Toisa Offshore Secured Claims Impaired Yes Class 15 G550 Airplane Credit Facility Claims Unimpaired No (deemed to accept) Class 16 T&T General Unsecured Claims Unimpaired No (deemed to accept) Class 17 Toisa General Unsecured Claims Unimpaired No (deemed to accept) Class 18 Intercompany Claims Unimpaired No (deemed to accept) Class 19 Interests in Toisa Unimpaired No (deemed to accept) Class 20 Intercompany Interests in Other Debtors Unimpaired No (deemed to accept) 3. Treatment of Classified Claims and Interests (a) Class 1 Other Priority Claims may exist against the Debtors. (i) Claims In Class: Class 1 consists of all Other Priority Claims that (ii) Treatment: On, or as soon as reasonably practicable after, (a) the Effective Date if such Other Priority Claim is an Allowed Other Priority Claim on the Effective Date or (b) the date on which such Other Priority Claim becomes an Allowed Other Priority Claim, each Holder of an Allowed Class 1 Other Priority Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such Allowed Other Priority Claim, Cash equal to the unpaid portion of such Allowed Other Priority Claim. (iii) Voting: Claims in Class 1 are Unimpaired, and the Holders of Allowed Class 1 Other Priority Claims are conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 1 Other Priority Claims are not entitled to vote to accept or reject the Plan. (b) Class 2 Existing Citi Tanker Credit Facility Claims Claims. (i) Claims In Class: Class 2 consists of all Citi Tanker Credit Facility (ii) Treatment: On, or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Class 2 Citi Tanker Credit Facility Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such claims, its pro rata share of the loans under the Amended and Restated Citi Tanker Credit Facility, in addition to any terms of treatment that the Court orders. Under the Amended and Restated Citi Tanker Credit Facility the balances and interest rates under the Amended and Restated Citi Tanker Credit Facility will remain unchanged from those in effect under the Existing Citi Tanker Credit Facility; however, the maturity shall be extended to five (5) years from the Effective Date; interest is to be paid by the earnings from the Citi Tanker Vessels, and pooled to pay interest deficiencies, if any, relating to the Amended and Restated Oceangoing Facilities. 50% of any excess cash flow shall be swept on a quarterly basis to repay principal on the Amended and Restated Citi Tanker Credit Facility subject to a consolidated cash balance at Reorganized Trade and Transport Enterprise in excess of the Oceangoing Minimum Working Capital amount. Such cash flow sweep shall replace the prepetition amortization schedule. (iii) for the avoidance of doubt, all Toisa guarantees relating to the Existing Citi Tanker Facility shall be fully released as of the Effective Date. 25

43 Pg 43 of 88 (iv) Voting: Claims in Class 2 are Impaired. Pursuant to section 1126 of the Bankruptcy Code, each Holder of an Allowed Class 2 Citi Tanker Facility Claim is entitled to vote to accept or reject the Plan. (c) Class 3 Existing Commerzbank I Credit Facility Claims Credit Facility Claims. (i) Claims In Class: Class 3 consists of all Existing Commerzbank I (ii) Treatment: On, or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Class 3 Existing Commerzbank I Credit Facility Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such claims, its pro rata share of the loans under the Amended and Restated Commerzbank I Credit Facility, in addition to any terms of treatment that the Court orders. Under the Amended and Restated Commerzbank I Credit Facility the balances and interest rates under the Amended and Restated Commerzbank I Credit Facility will remain unchanged from those in effect under the Existing Commerzbank I Credit Facility; however, the maturity shall be extended to five (5) years from the Effective Date; interest is to be paid by the earnings from the Commerzbank I Vessels, and pooled to pay interest deficiencies, if any relating to the Amended and Restated Oceangoing Facilities. 50% of any excess cash flow shall be swept on a quarterly basis to repay principal on the Amended and Restated Commerzbank I Credit Facility subject to a consolidated cash balance at Reorganized Trade and Transport Enterprise in excess of the Oceangoing Minimum Working Capital amount. Such cash flow sweep shall replace the prepetition amortization schedule. (iii) for the avoidance of doubt, all Toisa guarantees relating to the Existing Commerzbank I Facility shall be fully released as of the Effective Date. (iv) Voting: Claims in Class 3 are Impaired. Pursuant to section 1126 of the Bankruptcy Code, each Holder of an Allowed Class 3 Commerzbank I Facility Claim is entitled to vote to accept or reject the Plan. (d) Class 4 Existing Commerzbank II Credit Facility Claims Facility Claims.. (i) Claims In Class: Class 4 consists of all Existing Commerzbank II (ii) Treatment: On or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Class 4 Existing Commerzbank II Credit Facility Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such claims, its pro rata share of the loans under the Amended and Restated Commerzbank II Credit Facility, in addition to any terms of treatment that the Court orders. Under the Amended and Restated Commerzbank II Credit Facility the balances and interest rates under the Amended and Restated Commerzbank II Credit Facility will remain unchanged from those in effect under the Existing Commerzbank II Credit Facility; however, the maturity shall be extended to five (5) years from the Effective Date; interest is to be paid by the earnings from the Commerzbank II Vessels, and pooled to pay interest deficiencies, if any relating to the Amended and Restated Oceangoing Facilities. 50% of any excess cash flow shall be swept on a quarterly basis to repay principal on the Amended and Restated Commerzbank II Credit Facility subject to a consolidated cash balance at Reorganized Trade and Transport Enterprise in excess of the Oceangoing Minimum Working Capital amount. Such cash flow sweep shall replace the prepetition amortization schedule. (iii) for the avoidance of doubt, all Toisa guarantees relating to the Existing Commerzbank II Facility shall be fully released as of the Effective Date. (iv) Voting: Claims in Class 4 are Impaired. Pursuant to section 1126 of the Bankruptcy Code, each Holder of an Allowed Class 4 Existing Commerzbank II Facility Claim is entitled to vote to accept or reject the Plan. 26

44 Pg 44 of 88 (e) Class 5 Existing Credit Agricole Tanker Credit Facility Claims Tanker Credit Facility Claims. (i) Claims In Class: Class 5 consists of all Existing Credit Agricole (ii) Treatment: On, or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Class 5 Credit Agricole Tanker Credit Facility Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such claims, its pro rata share of the loans under the Amended and Restated Credit Agricole Tanker Credit Facility, in addition to any terms of treatment that the Court orders. Under the Amended and Restated Credit Agricole Tanker Credit Facility the balances and interest rates under the Amended and Restated Credit Agricole Tanker Credit Facility will remain unchanged from those in effect under the Existing Credit Agricole Tanker Credit Facility; however, the maturity shall be extended to five (5) years from the Effective Date; interest is to be paid by the earnings from the Credit Agricole Tanker Vessels, and pooled to pay interest deficiencies, if any relating to the Amended and Restated Oceangoing Facilities. 50% of any excess cash flow shall be swept on a quarterly basis to repay principal on the Amended and Restated Credit Agricole Tanker Credit Facility subject to a consolidated cash balance at Reorganized Trade and Transport Enterprise in excess of the Oceangoing Minimum Working Capital amount. Such cash flow sweep shall replace the prepetition amortization schedule. (iii) Voting: Claims in Class 5 are Impaired. Pursuant to section 1126 of the Bankruptcy Code, each Holder of an Allowed Class 5 Existing Credit Agricole Tanker Facility Claim is entitled to vote to accept or reject the Plan. (f) Class 6 Existing Danish Ship Bulker Credit Facility Claims Bulker Credit Facility Claims. (i) Claims In Class: Class 6 consists of all Existing Danish Ship (ii) Treatment: On, or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Class 6 Danish Ship Bulker Credit Facility Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such claims, its pro rata share of the loans under the Amended and Restated Danish Ship Bulker Credit Facility, in addition to any terms of treatment that the Court orders. Under the Amended and Restated Danish Ship Bulker Credit Facility the balances and interest rates under the Amended and Restated Danish Ship Bulker Credit Facility will remain unchanged from those in effect under the Existing Danish Ship Bulker Credit Facility; however, the maturity shall be extended to five (5) years from the Effective Date; interest is to be paid by the earnings from the Danish Ship Bulker Vessels, and pooled to pay interest deficiencies, if any relating to the Amended and Restated Oceangoing Facilities. 50% of any excess cash flow shall be swept on a quarterly basis to repay principal on the Amended and Restated Danish Ship Bulker Credit Facility subject to a consolidated cash balance at Reorganized Trade and Transport Enterprise in excess of the Oceangoing Minimum Working Capital amount. Such cash flow sweep shall replace the prepetition amortization schedule. (iii) for the avoidance of doubt, all Toisa guarantees relating to the Existing Danish Ship Bulker Credit Facility shall be fully released as of the Effective Date. (iv) Voting: Claims in Class 6 are Impaired. Pursuant to section 1126 of the Bankruptcy Code, each Holder of an Allowed Class 6 Existing Danish Ship Bulker Credit Facility Claim is entitled to vote to accept or reject the Plan. 27

45 Pg 45 of 88 (g) Class 7 Existing Danish Ship Tanker Credit Facility Claims Tanker Credit Facility Claims. (i) Claims In Class: Class 7 consists of all Existing Danish Ship (ii) Treatment: On, or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Class 7 Existing Danish Ship Tanker Credit Facility Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such claims, its pro rata share of the loans under the Amended and Restated Danish Ship Tanker Credit Facility, in addition to any terms of treatment that the Court orders. Under the Amended and Restated Danish Ship Tanker Credit Facility the balances and interest rates under the Amended and Restated Danish Ship Tanker Credit Facility will remain unchanged from those in effect under the Existing Danish Ship Tanker Credit Facility; however, the maturity shall be extended to five (5) years from the Effective Date; interest is to be paid by the earnings from the Danish Ship Tanker Vessels, and pooled to pay interest deficiencies, if any relating to the Amended and Restated Oceangoing Facilities. 50% of any excess cash flow shall be swept on a quarterly basis to repay principal on the Amended and Restated Danish Ship Tanker Credit Facility subject to a consolidated cash balance at Reorganized Trade and Transport Enterprise in excess of the Oceangoing Minimum Working Capital amount. Such cash flow sweep shall replace the prepetition amortization schedule. (iii) for the avoidance of doubt, all Toisa guarantees relating to the Existing Danish Ship Tanker Credit Facility shall be fully released as of the Effective Date. (iv) Voting: Claims in Class 7 are Impaired. Pursuant to section 1126 of the Bankruptcy Code, each Holder of an Allowed Class 7 Danish Ship Tanker Credit Facility Claim is entitled to vote to accept or reject the Plan. (h) Class 8 Existing DNB Tanker Credit Facility Claims Credit Facility Claims. (i) Claims In Class: Class 8 consists of all Existing DNB Tanker (ii) Treatment: On, or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Class 8 DNB Tanker Credit Facility Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such claims, its pro rata share of the loans under the Amended and Restated DNB Tanker Credit Facility, in addition to any terms of treatment that the Court orders. Under the Amended and Restated DNB Tanker Credit Facility the balances and interest rates under the Amended and Restated DNB Tanker Credit Facility will remain unchanged from those in effect under the Existing DNB Tanker Credit Facility; however, the maturity shall be extended to five (5) years from the Effective Date; interest is to be paid by the earnings from the DNB Tanker Vessels, and pooled to pay interest deficiencies, if any relating to the Amended and Restated Oceangoing Facilities. 50% of any excess cash flow shall be swept on a quarterly basis to repay principal on the Amended and Restated DNB Tanker Credit Facility subject to a consolidated cash balance at Reorganized Trade and Transport Enterprise in excess of the Oceangoing Minimum Working Capital amount. Such cash flow sweep shall replace the prepetition amortization schedule. (iii) for the avoidance of doubt, all Toisa guarantees relating to the Existing DNB Tanker Credit Facility shall be fully released as of the Effective Date. (iv) Voting: Claims in Class 8 are Impaired. Pursuant to section 1126 of the Bankruptcy Code, each Holder of an Allowed Class 8 DNB Tanker credit Facility Claim is entitled to vote to accept or reject the Plan. 28

46 Pg 46 of 88 (i) Class 9 Existing ING Bulker Credit Facility Claims Facility Claims. (i) Claims In Class: Class 9 consists of all Existing ING Bulker Credit (ii) Treatment: On, or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Class 9 Existing ING Bulker Credit Facility Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such claims, its pro rata share of the loans under the Amended and Restated ING Bulker Credit Facility, in addition to any terms of treatment that the Court orders. Under the Amended and Restated ING Bulker Credit Facility the balances and interest rates under the Amended and Restated ING Bulker Credit Facility will remain unchanged from those in effect under the Existing ING Bulker Credit Facility; however, the maturity shall be extended to five (5) years from the Effective Date; interest is to be paid by the earnings from the ING Bulker Vessels, and pooled to pay interest deficiencies, if any relating to the Amended and Restated Oceangoing Facilities. 50% of any excess cash flow shall be swept on a quarterly basis to repay principal on the Amended and Restated ING Bulker Credit Facility subject to a consolidated cash balance at Reorganized Trade and Transport Enterprise in excess of the Oceangoing Minimum Working Capital amount. Such cash flow sweep shall replace the prepetition amortization schedule. (iii) for the avoidance of doubt, all Toisa guarantees relating to the Existing ING Bulker Credit Facility shall be fully released as of the Effective Date. (iv) Voting: Claims in Class 9 are Impaired. Pursuant to section 1126 of the Bankruptcy Code, each Holder of an Allowed Class 9 ING Bulker Facility Claim is entitled to vote to accept or reject the Plan. (j) Class 10 Existing NBG Credit Facility Claims Facility Claims. (i) Claims In Class: Class 10 consists of all Existing NBG Credit (ii) Treatment: On, or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Class 10 NBG Existing Credit Facility Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such claims, its pro rata share of the loans under the Amended and Restated NBG Credit Facility, in addition to any terms of treatment that the Court orders. Under the Amended and Restated NBG Credit Facility the balances and interest rates under the Amended and Restated NBG Credit Facility will remain unchanged from those in effect under the Existing NBG Credit Facility; however, the maturity shall be extended to five (5) years from the Effective Date; interest is to be paid by the earnings from the NBG Vessels, and pooled to pay interest deficiencies, if any relating to the Amended and Restated Oceangoing Facilities. 50% of any excess cash flow shall be swept on a quarterly basis to repay principal on the Amended and Restated NBG Credit Facility subject to a consolidated cash balance at Reorganized Trade and Transport Enterprise in excess of the Oceangoing Minimum Working Capital amount. Such cash flow sweep shall replace the prepetition amortization schedule. (iii) Voting: Claims in Class 10 are Impaired. Pursuant to section 1126 of the Bankruptcy Code, each Holder of an Allowed Class 10 Existing NBG Credit Facility Claim is entitled to vote to accept or reject the Plan. (k) Class 11 Newbuild Tanker Credit Facility Claims Claims. (i) Claims In Class: Class 11 consists of all Newbuild Credit Facility (ii) Treatment: On, or as soon as reasonably practicable after, the Effective Date and the closing of the Newbuild Tanker Sale Transaction, each Holder of an Allowed Class 11 Newbuild Tanker Credit Facility Claim shall receive, in full and final satisfaction, settlement, release, 29

47 Pg 47 of 88 and discharge of, and in exchange for, such claims, the treatment provided for in the Newbuild Tanker Purchase Agreement. (iii) for the avoidance of doubt, all Trade and Transport guarantees relating to the Newbuild Tanker Credit Facility shall be fully released as of the later of the Effective Date and the closing of the Newbuild Tanker Sale Transaction. (iv) Voting: Claims in Class 11 are Impaired. Pursuant to section 1126 of the Bankruptcy Code, each Holder of an Allowed Class 11 Newbuild Tanker Credit Facility Claim is entitled to vote to accept or reject this Plan. (l) Class 12 Existing DVB Credit Facility Claims Claims. (i) Claims In Class: Class 12 consists of all DVB Credit Facility (ii) Treatment: On, or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Class 12 DVB Credit Facility Claims shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for such Claims its pro rata share of the loans under the Amended and Restated DVB Credit Facility. Under the Amended and Restated DVB Credit Facility the balances and interest rates under the Amended and Restated DVB Credit Facility will remain unchanged from those in effect under the Existing DVB Credit Facility; however, the maturity shall be extended to five (5) years from the Effective Date and interest shall be paid in Cash at the rate of Libor+25bps (the Cash Rate ) with the remaining interest paid as PIK Interest in an amount equal to the interest rate under the Existing DVB Credit Facility minus the Cash Rate. Any earnings from DVB Credit Facility Vessels in excess of the Cash Rate shall be pooled to pay interest deficiencies, if any, relating to the Amended and Restated Offshore Facilities. 50% of any excess cash flow after payment of interest deficiencies shall be swept on a quarterly basis to repay principal on the Amended and Restated DVB Credit Facility subject to a consolidated cash balance at Reorganized Toisa in excess of the Offshore Minimum Working Capital amount. Such cash flow sweep shall replace the prepetition amortization schedule. (iii) Voting: Claims in Class 12 are Impaired. Pursuant to section 1126 of the Bankruptcy Code, each Holder of an Allowed Class 12 DVB Credit Facility Claim is entitled to vote to accept or reject the Plan. (m) Class 13 Existing Citizens I Credit Facility Secured Claim Facility Secured Claims. (i) Claims In Class: Class 13 consists of all Existing Citizens I Credit (ii) Treatment: On, or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Class 13 Existing Citizens I Credit Facility Secured Claims shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for such Claims, its pro rata share of the loans under the Amended and Restated Citizens I Credit Facility, in addition to any terms of treatment that the Court orders. Under the Amended and Restated Offshore Credit Facilities the balances and interest rates under the Amended and Restated Offshore Credit Facilities will remain unchanged from those in effect under the Existing Offshore Credit Facilities; however, the maturity shall be extended to five (5) years from the Effective Date and interest shall be paid in Cash at the Cash Rate with the remaining interest paid as PIK Interest in an amount equal to the interest rate under the applicable Existing Offshore Credit Facility minus the Cash Rate. Any earnings from Citizens I Credit Facility Vessels in excess of the Cash Rate shall be pooled to pay interest deficiencies, if any, relating to the Amended and Restated Offshore Facilities. 50% of any excess cash flow after payment of interest deficiencies shall be swept on a quarterly basis to repay principal on the Amended and Restated Citizens I Credit Facility subject to a consolidated cash balance at Reorganized Toisa in excess of the Offshore Minimum Working Capital amount. Such cash flow sweep shall replace the prepetition amortization schedule. 30

48 Pg 48 of 88 (iii) Voting: Claims in Class 13 are Impaired. Pursuant to section 1126 of the Bankruptcy Code, each Holder of an Allowed Class 13 Existing Citizens I Credit Facility Secured Claim is entitled to vote to accept or reject the Plan. (n) Class 14 Toisa Offshore Secured Claims (i) Claims In Class: Class 14 consists of all Existing BNP Credit Facility Claims, Existing Citi Offshore Facility Claims, Existing Citizens II Credit Facility Claims, Existing Commonwealth Bank of Australia Credit Facility Claims, Existing Credit Agricole Offshore Credit Facility Claims, Existing Danish Ship Offshore Credit Facility Claims, Existing DNB Offshore Credit Facility Claims, Existing ING Offshore Credit Facility Claims, and Existing Wells Fargo Credit Facility Claims. (ii) Treatment: On, or as soon as reasonably practicable after, the Effective Date, each Holder of an Allowed Class 14 Toisa Offshore Secured Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for such Claims its pro rata share of the loans under such Holder s applicable Amended and Restated Offshore Credit Facility. Under the Amended and Restated Offshore Credit Facilities, the balances and interest rates under the Amended and Restated Offshore Credit Facilities will remain unchanged from those in effect under the Existing Offshore Credit Facilities; however, the maturity shall be extended to five (5) years from the Effective Date and interest shall be paid in Cash at the Cash Rate. with the remaining interest paid as PIK Interest in an amount equal to the interest rate under the applicable Existing Offshore Credit Facility minus the Cash Rate. Any earnings from Offshore Credit Facility Vessels in excess of the Cash Rate interest payable under the corresponding Offshore Credit Facility shall be pooled to pay interest deficiencies, if any, relating to the Amended and Restated Offshore Facilities. 50% of any excess cash flow from Offshore Credit Facility Vessels after payment of pooled interest deficiencies shall be swept on a quarterly basis to repay principal on the corresponding Amended and Restated Offshore Credit Facility subject to a consolidated cash balance at Reorganized Toisa in excess of the Offshore Minimum Working Capital amount. Such cash flow sweeps shall replace the prepetition amortization schedule. (iii) Voting: Claims in Class 14 are Impaired. Pursuant to section 1126 of the Bankruptcy Code, each Holder of an Allowed Class 14 Toisa Offshore Secured Claim is entitled to vote to accept or reject the Plan. (o) Class 15 G550 Airplane Credit Facility Claims Credit Facility Claims. (i) Claims In Class: Class 15 consists of all Existing G550 Airplane (ii) Treatment: On, or as soon as reasonably practicable after, the Effective Date, each G550 Airplane Credit Facility Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such claims, its pro rata share of the loans under the Reinstated G550 Airplane Credit Facility, in addition to any terms of treatment that the Court orders. (p) Voting: Claims in Class 15 are Unimpaired, and the Holders of Allowed Class 15 G550 Airplane Credit Facility Claims are conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 15 G550 Airplane Credit Facility Claims are not entitled to vote to accept or reject the Plan. (q) Class 16 T&T General Unsecured Claims (i) Claims In Class: Class 16 consists of all General Unsecured Claims that may exist against the Debtor T&T ( T&T General Unsecured Claims ). (ii) Treatment: Within ninety (90) days after the Effective Date or, if such T&T General Unsecured Claim becomes Allowed after the Effective Date, as soon as reasonably 31

49 Pg 49 of 88 practicable after the date at which such General Unsecured Claim becomes Allowed, each Holder of an Allowed Class 16 T&T General Unsecured Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such Claim, payment in Cash of the full amount of such Allowed T&T General Unsecured Claims. (iii) Voting: Claims in Class 16 are Unimpaired, and the Holders of Allowed Class 16 T&T General Unsecured Claims are conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 16 T&T General Unsecured Claims are not entitled to vote to accept or reject the Plan. (r) Class 17 Toisa General Unsecured Claims (i) Claims In Class: Class 17 consists of all General Unsecured Claims that may exist against the Debtor Toisa. (ii) Treatment: Within ninety (90) days after the Effective Date or, if such Toisa General Unsecured Claim becomes Allowed after the Effective Date, as soon as reasonably practicable after the date at which such General Unsecured Claim becomes Allowed, each Holder of an Allowed Class 17 Toisa General Unsecured Claim shall receive, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, such Claim, payment in Cash of the full amount of such Allowed Toisa General Unsecured Claims. (iii) Voting: Claims in Class 17 are Unimpaired, and the Holders of Allowed Class 17 Toisa General Unsecured Claims are conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 17 Toisa General Unsecured Claims are not entitled to vote to accept or reject the Plan (s) Class 18 Intercompany Claims (i) Claims In Class: Class 18 consists of all Intercompany Claims. (ii) Treatment: On or prior to the Effective Date, all Class 18 Intercompany Claims shall be reinstated on the Effective Date. (iii) Voting: Claims in Class 18 are Unimpaired, and the Holders of Allowed Class 18 Intercompany Claims are conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Allowed Class 18 Intercompany Claims are not entitled to vote to accept or reject the Plan. (t) Class 19 Interests in Toisa reinstated. (i) (ii) Interests in Class: Class 19 consists of all Interests in Toisa. Treatment: On the Effective Date, all Class 19 Interests shall be (iii) Voting: Interests in Class 19 are Unimpaired, and the Holders of Class 19 Interests are conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 19 Interests are not entitled to vote to accept or reject the Plan. (u) Class 20 Intercompany Interests in Other Debtors in each Debtor except Toisa. (i) Interests in Class: Class 20 consists of all Intercompany Interests 32

50 Pg 50 of 88 (ii) Treatment: Except as otherwise provided herein or in the Oceangoing Equity Purchase Agreement, on or prior to the Effective Date, all Class 20 Intercompany Interests in Other Debtors shall be Reinstated. (iii) Voting: Interests in Class 20 are Unimpaired, and the Holders of Class 20 Intercompany Interests are conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 20 Intercompany Interests are not entitled to vote to accept or reject the Plan. D. Alternative Treatment Notwithstanding any provision herein to the contrary, any holder of an Allowed Claim may receive, instead of the distribution or treatment to which it is entitled hereunder, any other distribution or treatment to which it and the Debtors may agree in writing; provided, however, that under no circumstance may the Debtors agree to provide any other distribution or treatment to any holder of an Allowed Claim that would adversely impair the distribution or treatment provided to any other holder of an Allowed Claim. E. Special Provision Regarding Unimpaired Claims Except as otherwise provided in the Plan, nothing shall affect the Debtors rights and defenses, both legal and equitable, with respect to any Unimpaired Claims, including but not limited to all rights with respect to legal and equitable defenses to setoffs against or recoupments of Unimpaired Claims. F. Acceptance Or Rejection Of The Plan 1. Acceptance By Class Entitled To Vote Classes 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13 and 14 are the Classes of Claims of the Debtors that are entitled to vote to accept or reject the Plan. Classes 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13 and 14 shall have accepted the Plan if (a) the Holders of at least two-thirds in amount of the Allowed Claims actually voting in each Class have voted to accept the Plan and (b) the Holders of more than one-half in number of the Allowed Claims actually voting in each Class have voted to accept the Plan, not counting the vote of any Holder designated under section 1126(e) of the Bankruptcy Code. If there are no votes cast in a particular Class that is entitled to vote on the Plan, then the Plan shall be deemed accepted by such Class. 2. Presumed Acceptance Of The Plan Classes 1, 15, 16, 17, 18, 19 and 20 are Unimpaired. Therefore, such classes are deemed to have accepted the Plan by operation of law and are not entitled to vote to accept or reject the Plan. 3. Elimination Of Classes To the extent applicable, any Class that does not contain any Allowed Claims or any Claims temporarily allowed for voting purposes under Bankruptcy Rule 3018, as of the date of the commencement of the Confirmation Hearing, shall be deemed to have been deleted from the Plan for purposes of (a) voting to accept or reject the Plan and (b) determining whether it has accepted or rejected the Plan under section 1129(a)(8) of the Bankruptcy Code. 4. Cramdown The Debtors request Confirmation of the Plan, as it may be modified from time to time, under section 1129(b) of the Bankruptcy Code. The Debtors reserve the right to modify the Plan to the extent, if any, that Confirmation pursuant to section 1129(b) of the Bankruptcy Code requires modification. 33

51 Pg 51 of 88 G. Means For Implementation of the Plan 1. Joint Chapter 11 Plan The Plan is a joint chapter 11 plan for each of the Debtors, with the Plan for each Debtor being non-severable and mutually dependent on the Plan for each other Debtor. 2. Continued Legal Existence Except as otherwise provided for in the Plan, the Oceangoing Equity Purchase Agreement, or the Newbuild Tanker Purchase Agreement, each of the Debtors will continue to exist after the Effective Date as the Reorganized Debtors separate legal entities, with all the powers of such an entity (whether a company or other entity as appropriate) under applicable law in the jurisdiction in which each applicable Debtor is incorporated or otherwise formed and pursuant to such Debtor s certificate or articles of incorporation and by-laws or other organizational documents in effect prior to the Effective Date, without prejudice to any right to terminate such existence (whether by merger or otherwise) under applicable law after the Effective Date. 3. The Oceangoing Equity Sale The Confirmation Order shall authorize the Oceangoing Equity Sale Transaction under sections 363, 365, 1123(b)(4), 1129(b)(2)(A)(iii), 1145, and 1146(a) of the Bankruptcy Code under the terms and conditions of the Oceangoing Equity Purchase Agreement. Upon Confirmation, the Debtors shall be authorized to take any and all actions necessary to consummate the Oceangoing Equity Sale Transaction. 4. The Newbuild Tanker Sale The Confirmation Order shall authorize the Newbuild Tanker Sale Transaction under sections 363, 365, 1123(b)(4), 1129(b)(2)(A)(iii), 1145, and 1146(a) of the Bankruptcy Code under the terms and conditions of the Newbuild Tanker Purchase Agreement. Upon Confirmation, the Debtors shall be authorized to take any and all actions necessary to consummate the Newbuild Tanker Sale Transaction. 5. Proposed Purchaser It is anticipated that the proposed Purchaser in connection with (i) the Newbuild Tanker Sale Transaction and (ii) Oceangoing Equity Sale Transaction will be Gregory Callimanopulos and/or his affiliates (the Proposed Purchaser ). 6. Sources of Cash for Toisa Distributions and Operations All Cash necessary for the Reorganized Toisa to make payments required by the Plan and for post Confirmation operations shall be obtained from (a) existing Cash at Toisa, (b) Oceangoing Equity Sale Proceeds, (c) Newbuild Tanker Sale Proceeds, (d) the Toisa Equity Contribution, (e) the Proceeds from any Causes of Action, and (f) the operations of Reorganized Toisa. 7. Sources of Cash for Reorganized Oceangoing Debtors Distributions and Operations All cash necessary for the Reorganized Oceangoing Debtors to make payments required by the Plan and for post Confirmation operations shall be obtained from (a) existing Cash at each of the Reorganized Oceangoing Debtors and Reorganized Trade and Transport, (b) the Oceangoing Working Capital Contribution, and (c) the operations of the Reorganized Oceangoing Debtors. 8. Approval and Authorization for the Amended and Restated Credit Facilities Confirmation shall be deemed approval of each of the New Credit Facilities and authorization for the applicable Reorganized Debtors to enter into each of the applicable Amended and 34

52 Pg 52 of 88 Restated Credit Facilities and execute such documents as may be required to effectuate the treatment afforded to the applicable lenders pursuant to each of the Amended and Restated Credit Facilities. 9. New Boards of Reorganized Debtors The members of the Boards of each of the Reorganized Debtors shall be identified in the Plan Supplement. 10. Corporate Action Each of the matters provided for under the Plan involving the corporate structure of any Debtor or any corporate action to be taken by or required of any Debtor or Reorganized Debtor shall be deemed to have occurred and be effective as provided herein, and shall be authorized, approved and, to the extent taken prior to the Effective Date, ratified in all respects without any requirement of further action by shareholders, members, creditors, directors, or managers of the Debtors. 11. Effectuating Documents; Further Transactions Each of the Debtors and the Reorganized Debtors, and their respective officers and designees, is authorized to execute, deliver, file, or record such contracts, instruments, releases, indentures, and other agreements or documents, and take such actions as may be necessary or appropriate to effectuate and further evidence the terms and conditions of the Plan, or to otherwise comply with applicable law. 12. Preservation Of Retained Actions In accordance with section 1123(b)(3) of the Bankruptcy Code, the Reorganized Debtors will retain and may (but are not required to) enforce all Retained Actions. After the Effective Date, the Reorganized Debtors, in their sole and absolute discretion, shall have the right to bring, settle, release, compromise, or enforce such Retained Actions (or decline to do any of the foregoing), without further approval of the Bankruptcy Court. The Reorganized Debtors or any successors, in the exercise of their sole discretion, may pursue such Retained Actions so long as it is in the best interests of the Reorganized Debtors or any successors holding such rights of action. The failure of the Debtors to specifically list any claim, right of action, suit, proceeding or other Retained Action in the Plan does not, and will not be deemed to, constitute a waiver or release by the Debtors or the Reorganized Debtors of such claim, right of action, suit, proceeding or other Retained Action, and the Reorganized Debtors will retain the right to pursue such claims, rights of action, suits, proceedings and other Retained Actions in their sole discretion and, therefore, no preclusion doctrine, collateral estoppel, issue preclusion, claim preclusion, estoppel (judicial, equitable, or otherwise) or laches will apply to such claim, right of action, suit, proceeding, or other Retained Action upon or after the Confirmation or consummation of the Plan. 13. Exemption From Certain Transfer Taxes And Recording Fees To the maximum extent provided by section 1146(a) of the Bankruptcy Code, any post- Confirmation sale by any Debtor, including any Liquidating Transaction, or any transfer from any Entity pursuant to, in contemplation of, or in connection with the Plan or pursuant to: (1) the issuance, distribution, transfer, or exchange of any debt, equity security, or other interest in the Debtors; or (2) the making, delivery, or recording of any deed or other instrument of transfer under, in furtherance of, or in connection with, the Plan, including any deeds, bills of sale, assignments, or other instruments of transfer executed in connection with any transaction arising out of, contemplated by, or in any way related to the Plan, shall not be subject to any document recording tax, stamp tax, conveyance fee, intangibles or similar tax, mortgage tax, real estate transfer tax, mortgage recording tax, Uniform Commercial Code filing or recording fee, or other similar tax or governmental assessment, in each case to the extent permitted by applicable bankruptcy law, and the appropriate state or local government officials or agents shall forego collection of any such tax or governmental assessment and accept for filing and recordation any of the foregoing instruments or other documents without the payment of any such tax or governmental assessment. 35

53 Pg 53 of Further Authorization The Debtors and the Reorganized Debtors shall be entitled to seek such orders, judgments, injunctions, and rulings as they deem necessary to carry out the intentions and purposes, and to give full effect to the provisions, of the Plan. 15. Cancellation Of Existing Securities And Agreements Except as provided in the Plan or in the Confirmation Order, on the Effective Date, all notes, stock, instruments, certificates, agreements, side letters, fee letters and other documents evidencing or giving rise to Claims and Interests in the Debtors shall be cancelled, and the obligations of the Debtors thereunder or in any way related thereto shall be fully released, terminated, extinguished and discharged, in each case without further notice to or order of the Bankruptcy Court, act or action under applicable law, regulation, order, or rule or any requirement of further action, vote, or other approval or authorization by any Person. The Holders of or parties to such notes, stock, instruments, certificates, agreements, side letters, fee letters, and other documents shall have no rights arising from or relating to such notes, stock, instruments, certificates, agreements, side letters, fee letters, and other documents or the cancellation thereof, except the rights provided pursuant to the Plan and the Confirmation Order. 16. Closing of the Chapter 11 Case After the Chapter 11 Case of a Debtor has been fully administered, the Reorganized Debtors shall seek authority from the Bankruptcy Court to close such Debtor s Chapter 11 Case in accordance with the Bankruptcy Code and the Bankruptcy Rules. H. Provisions Governing Distributions 1. Distribution Record Date As of the close of business on the Distribution Record Date, the various transfer registers for each of the Classes of Claims or Interests as maintained by the Debtors or their respective agents, shall be deemed closed, and there shall be no further changes in the record of holders of any of the Claims or Interests. The Debtors or the Reorganized Debtors shall have no obligation to recognize any transfer of the Claims or Interests occurring on or after the Distribution Record Date. 2. Allowed Claims Notwithstanding any provision herein to the contrary, the Debtors or the Reorganized Debtors shall make distributions only to Holders of Allowed Claims. A Holder of a Disputed Claim shall receive a distribution on account thereof only when and to the extent that such Holder s Disputed Claim becomes an Allowed Claim. 3. Distributions For Claims Allowed As Of The Effective Date Except as otherwise provided under the Plan or as ordered by the Bankruptcy Court, distributions to be made on account of Claims that are Allowed Claims as of the Effective Date shall be made on the Effective Date or as soon thereafter as is practicable. Any distribution to be made on the Effective Date pursuant to the Plan shall be deemed as having been made on the Effective Date if such distribution is made on the Effective Date or as soon thereafter as is practicable. Any payment or distribution required to be made under the Plan on a day other than a Business Day shall be made on the next succeeding Business Day. 4. Interest And Penalties On Claims Unless otherwise specifically provided for in the Plan or the Confirmation Order, or required by applicable bankruptcy law, postpetition interest and penalties shall not accrue or be paid on any Claim, and no Holder of a Claim shall be entitled to interest and penalties accruing on or after the 36

54 Pg 54 of 88 Petition Date through the date such Claim is satisfied in accordance with the terms of the Plan. 5. Delivery of Distributions In the event that any distribution to any Holder is returned as undeliverable, no distribution to such Holder shall be made unless and until the Debtors or the Reorganized Debtors, as applicable, has determined the then current address of such holder, at which time such distribution shall be made to such holder without interest; provided, however, such distributions shall be deemed unclaimed property under section 347(b) of the Bankruptcy Code at the expiration of six months from the date the Initial Distribution is made. After such date, all unclaimed property or interests in property shall revert (notwithstanding any applicable federal or state escheat, abandoned, or unclaimed property laws to the contrary) to the Debtors automatically and without need for a further order by the Bankruptcy Court for distribution in accordance with the Plan and the Claim of any such holder to such property or interest in property shall be released, settled, compromised, and forever barred. 6. Withholding and Reporting Requirements In connection with the Plan and all distributions hereunder, the Reorganized Debtors shall comply with all withholding and reporting requirements imposed by any taxing authority, and all distributions hereunder shall be subject to any such withholding and reporting requirements. The Reorganized Debtors shall be authorized to take any and all actions that may be necessary or appropriate to comply with such withholding and reporting requirements. Distributions in respect of Allowed Claims shall be allocated first to the principal amount of such Claims (as determined for U.S. federal income tax purposes) and then, to the extent the consideration exceeds the principal amount of the Claims, to any portion of such Claims for accrued but unpaid interest. 7. Manner of Payment Under Plan At the option of the Debtors or the Reorganized Debtors, any Cash payment to be made hereunder may be made by a check or wire transfer. 8. Setoffs The Debtors and the Reorganized Debtors may, but shall not be required to, set off against any Claim, any Claims of any nature whatsoever that the Debtors or the Reorganized Debtors may have against the holder of such Claim; provided that neither the failure to do so nor the allowance of any Claim hereunder shall constitute a waiver or release by the Debtors or the Reorganized Debtors of any such Claim the Debtors or the Reorganized Debtors may have against the holder of such Claim. 9. Payment of Disputed Claims As Disputed Claims are resolved pursuant to Article VII of the Plan, the Reorganized Debtors shall make distributions on account of such Disputed Claims as if such Disputed Claims were Allowed Claims as of the Effective Date. Such distributions shall be made on the first Distribution Date that is at least forty-five (45) days after the date on which a Disputed Claim becomes an Allowed Claim, or on an earlier date selected by the Reorganized Debtors in the Reorganized Debtors sole discretion. I. Procedures For Disputed Claims 1. Allowance of Claims After the Effective Date, the Debtors or the Reorganized Debtors shall have and shall retain any and all rights and defenses that the Debtors had with respect to any Claims, except with respect to any Claim deemed Allowed under the Plan. Except as expressly provided in the Plan or in any order entered in these Chapter 11 Cases prior to the Effective Date (including, without limitation, the Confirmation Order), no Claim shall become an Allowed Claim unless and until such Claim is deemed Allowed under the Plan or the Bankruptcy Court has entered a Final Order, including, without limitation, 37

55 Pg 55 of 88 the Confirmation Order, in these Chapter 11 Cases allowing such Claim. 2. Objections to Claims As of the Effective Date, objections to, and requests for estimation of, Claims against the Debtors may be interposed and prosecuted only by the Reorganized Debtors. Such objections and requests for estimation shall be served and filed (a) on or before the 60th day following the later of (i) the Effective Date and (ii) the date that a proof of Claim is filed or amended or a Claim is otherwise asserted or amended in writing by or on behalf of a holder of such Claim, or (b) such later date as ordered by the Bankruptcy Court upon motion filed by the Reorganized Debtors. 3. Estimation of Claims. The Reorganized Debtors may at any time request that the Bankruptcy Court estimate any contingent, unliquidated, or Disputed Claim pursuant to section 502(c) of the Bankruptcy Code, regardless of whether the Debtors or Reorganized Debtors previously objected to such Claim or whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy Court will retain jurisdiction to estimate any Claim at any time during litigation concerning any objection to any Claim, including, without limitation, during the pendency of any appeal relating to any such objection. In the event that the Bankruptcy Court estimates any contingent, unliquidated, or Disputed Claim, the amount so estimated shall constitute either the Allowed amount of such Claim or a maximum limitation on such Claim, as determined by the Bankruptcy Court. If the estimated amount constitutes a maximum limitation on the amount of such Claim, the Debtors or Reorganized Debtors, as applicable, may pursue supplementary proceedings to object to the allowance of such Claim. All of the aforementioned objection, estimation and resolution procedures are intended to be cumulative and not exclusive of one another. Claims may be estimated and subsequently compromised, settled, withdrawn, or resolved by any mechanism approved by the Bankruptcy Court. 4. Establishment of Reserve Account The Reorganized Debtors shall reserve an amount sufficient to pay holders of Disputed Claims the amount such holders would be entitled to receive under the Plan if such Claims were to become Allowed Claims (the Claims Reserve Account ). In the event the holders of Allowed Claims have not received payment in full on account of their Claims after the resolution of all Disputed Claims, then the Reorganized Debtors shall make a final distribution to all holders of Allowed Claims or if all Allowed Claims have been paid in full, the balance of the Claims Reserve Account shall be returned to Reorganized Toisa. Notwithstanding anything to the contrary in the Plan, no holder of an Allowed Claim shall, on account of such Allowed Claim, receive a distribution in excess of the Allowed amount of such Claim plus any interest accruing on such Claim that is actually payable in accordance with the Plan. 5. No Distributions Pending Allowance If an objection to a Claim is filed as set forth in Article VII, no payment or distribution provided under the Plan shall be made on account of such Claim unless and until such Disputed Claim becomes an Allowed Claim. 6. Resolution of Claims Except as otherwise provided herein, or in any contract, instrument, release, indenture, or other agreement or document entered into in connection with the Plan, in accordance with section 1123(b) of the Bankruptcy Code, the Reorganized Debtors shall retain and may enforce, sue on, settle, or compromise (or decline to do any of the foregoing) all Claims, Disputed Claims, rights, Causes of Action, suits and proceedings, whether in law or in equity, whether known or unknown, that the Debtors or their estates may hold against any Person, without the approval of the Bankruptcy Court, the Confirmation Order, and any contract, instrument, release, indenture, or other agreement entered into in connection herewith. The Reorganized Debtors or 38

56 Pg 56 of 88 their successors may pursue such retained Claims, rights, Causes of Action, suits or proceedings, as appropriate, in accordance with the best interests of the Debtors. 7. Disallowed Claims All Claims held by persons or entities against whom or which any of the Debtors or the Reorganized Debtors has commenced a proceeding asserting a Cause of Action under sections 542, 543, 544, 545, 547, 548, 549 and/or 550 of the Bankruptcy Code shall be deemed disallowed Claims pursuant to section 502(d) of the Bankruptcy Code and holders of such Claims shall not be entitled to vote to accept or reject the Plan. Claims that are deemed disallowed pursuant to the section shall continue to be disallowed for all purposes until the Avoidance Action against such party has been settled or resolved by Final Order and any sums due to the Debtors or the Reorganized Debtors from such party have been paid. J. Treatment Of Executory Contracts And Unexpired Leases 1. Rejection Of Executory Contracts And Unexpired Leases Except as otherwise provided in the Plan, on the Effective Date, all Executory Contracts and Unexpired Leases of the Debtors shall be deemed rejected in accordance with the provisions and requirements of sections 365 and 1123 of the Bankruptcy Code, unless such Executory Contract or Unexpired Lease (a) has previously been assumed by order of the Bankruptcy Court in effect as of the Effective Date (which order may be the Confirmation Order); (b) is the subject of a motion to assume filed on or before the Effective Date; (c) is identified as an Executory Contract or Unexpired Lease to be assumed pursuant to the Plan Supplement before the Effective Date; or (d) expired or terminated pursuant to its own terms. 2. Assumption of Existing Management Contracts Unless otherwise provided in the Plan, the Newbuild Tanker Purchase Agreement, or the Oceangoing Equity Purchase Agreement, upon the Effective Date, the Debtors shall be deemed to have assumed the Existing Management Agreements with the Management Companies. Cure amounts will be set at $0 for all Existing Management Agreements. Entry of the Confirmation Order shall constitute the Bankruptcy Court s approval of the Debtors foregoing assumption of each of the Existing Management Agreements. 3. D&O Liability Insurance Policies As of the Effective Date, the D&O Liability Insurance Policies shall be treated as if they were Executory Contracts that are assumed under the Plan. Entry of the Confirmation Order shall constitute the Bankruptcy Court s approval of the Debtors foregoing assumption of each of the D&O Liability Insurance Policies. Notwithstanding anything to the contrary contained in the Plan, Confirmation of the Plan shall not discharge, impair or otherwise modify any indemnity obligations assumed by the foregoing assumption of the D&O Liability Insurance Policies, and each such indemnity obligation shall be deemed and treated as an Executory Contract that has been assumed by the Debtors under the Plan as to which no Proof of Claim need be filed. 4. Indemnification Except as otherwise specifically limited in the Plan, any obligations or rights of the Debtors to defend, indemnify, reimburse, or limit the liability of the Debtors present and former directors, officers, employees, agents, representatives, attorneys, accountants, financial advisors, restructuring advisors, investment bankers and consultants (the Covered Persons ) pursuant to the Debtors certificates of incorporation, by-laws, policy of providing employee indemnification, applicable law, or specific agreement in respect of any claims, demands, suits, Causes of Action, or proceedings against such Covered Persons based upon any act or omission related to such Covered Persons service with, for, or on behalf of the Debtors prior to the Effective Date, shall be treated as if they were Executory Contracts that are 39

57 Pg 57 of 88 assumed under the Plan and shall survive the Effective Date and remain unaffected thereby, and shall not be discharged, irrespective of whether such defense, indemnification, reimbursement, or limitation of liability is owed in connection with an occurrence before or after the Petition Date. 5. Cure of Defaults Under Assumed Contracts The Reorganized Debtors shall cure any monetary defaults under any Executory Contract and Unexpired Lease to be assumed pursuant to the Plan by paying to the non-debtor counterparty the full amount of any monetary default in the ordinary course of business. Accordingly, no party to an Assumed Contract need file any cure claim, and the Debtors need not file any lists of any proposed cure claims, with the Bankruptcy Court. Notwithstanding the foregoing, the Reorganized Debtors and counterparties to Assumed Contracts reserve all their rights in the event of a dispute over the amount of a cure claim. If there is any such dispute that cannot be resolved consensually, then either party must file with the Bankruptcy Court a request for allowance and payment of such cure claim within seventy-five (75) days from the Effective Date. Moreover, the Reorganized Debtors shall be authorized to reject any Executory Contract or Unexpired Lease to the extent the Reorganized Debtors, in the exercise of their sound business judgment, conclude that the amount of the cure claim as determined by the Bankruptcy Court, renders assumption of such Executory Contract or Unexpired Lease unfavorable to the Reorganized Debtors. 6. Reservation of Rights Neither the exclusion nor inclusion of any contract or lease in the Plan Supplement, nor anything contained in the Plan, shall constitute an admission by the Debtors that any such contract or lease is in fact an Executory Contract or Unexpired Lease or that the Debtors Estates have any liability thereunder. K. Conditions Precedent To The Effective Date 1. Conditions Precedent to the Effective Date The Debtors shall request that the Confirmation Order include a finding by the Bankruptcy Court that, notwithstanding Bankruptcy Rule 3020(e), the Confirmation Order shall take effect immediately upon its entry. The following are conditions precedent to the occurrence of the Effective Date, each of which must be satisfied or waived by the Debtors in accordance with the terms hereof, provided, however, that if the Plan is confirmed for one or more Debtors only the conditions applicable to such Debtors need to be satisfied or waived for the Effective Date to occur: (a) the Bankruptcy Court shall have entered the Confirmation Order, which, in form and substance, shall be acceptable to the Oceangoing Equity Purchaser and the Newbuild Tanker Purchaser, each in their sole discretion, and the Confirmation Order shall have become a Final Order and shall, among other things, provide that the Debtors and the Reorganized Debtors are authorized to take all actions necessary or appropriate to enter into, implement, and consummate the agreements and documents created in connection with the Plan; (b) all documents related to, provided for therein, or contemplated by the Amended and Restated Credit Facilities shall have been executed and delivered, and all conditions precedent thereto shall have been satisfied (other than the occurrence of the Effective Date), which shall occur simultaneously with the satisfaction of all conditions precedent under the Amended and Restated Credit Facilities); (c) all conditions precedent to the effectiveness of the Oceangoing Equity Purchase Agreement have occurred or been waived and the Oceangoing Equity Sale Transaction has been consummated; (d) all conditions precedent to the effectiveness of the Newbuild Tanker Purchase Agreement have occurred or been waived and the Newbuild Tanker Sale Transaction has been consummated; 40

58 Pg 58 of 88 (e) the Professional Fee Escrow Account shall have been funded, and all amounts authorized as of the Effective Date be paid to Professionals pursuant to orders of the Bankruptcy Court shall have been paid; (f) (g) the Claims Reserve Account shall have been funded; the Prepetition Cash Reconciliation shall have been completed; (h) the Claims all governmental and third party approvals and consents, including Bankruptcy Court approval, necessary in connection with the transactions contemplated by the Plan, the Oceangoing Equity Sale Transaction, and the Newbuild Tanker Sale Transaction shall have been obtained, not be subject to unfulfilled conditions and be in full force and effect, and all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority that would restrain, prevent or otherwise impose materially adverse conditions on such transactions; and (i) all documents and agreements necessary to implement the Plan and the consummation of both the Oceangoing Equity Sale Transaction and the Newbuild Tanker Sale Transaction shall have (a) been tendered for delivery and (b) been effected or executed by all Entities party thereto, and all conditions precedent to the effectiveness of such documents and agreements shall have been satisfied or waived pursuant to the terms of such documents or agreements. 2. Waiver of Conditions Precedent Each of the conditions precedent in Article IX of the Plan other than the condition set forth in Article IX.1(a) may be waived in writing by the Debtors and, if applicable, the Oceangoing Equity Purchaser and the Newbuild Tanker Purchaser. Without limitation, the Oceangoing Equity Purchaser and Newbuild Tanker Purchaser, each in their sole discretion, to consent to any waiver under subsection (c), (d), (h), or (i) above. 3. Effect of Failure of Conditions to Effective Date Unless otherwise extended by the Debtors, if the Effective Date does not occur or if the Confirmation Order is vacated, (i) no distributions under the Plan shall be made, (ii) the Debtors and all holders of Claims and Interests shall be restored to the status quo ante as of the day immediately preceding the Confirmation Date as though the Confirmation Date never occurred, and (iii) all the Debtors obligations with respect to the Claims and the Interests shall remain unchanged and nothing contained herein shall be deemed to constitute a waiver or release of any Claims by or against the Debtors or any other entity or to prejudice in any manner the rights of the Debtors or any other entity in any further proceedings involving the Debtors or otherwise. L. Effect of Confirmation 1. Binding Effect Following the Effective Date, the Plan shall be binding upon and inure to the benefit of the Debtors, their Estates, all present and former Holders of Claims and Interests whether or not such Holders voted in favor of the Plan, and their respective successors and assigns. 2. Revesting Of Assets Except as otherwise explicitly provided in the Plan, on the Effective Date, all property comprising the Estates (including Retained Actions, but excluding property that has been abandoned pursuant to an order of the Bankruptcy Court) shall revest in the Reorganized Debtors, free and clear of all Claims, Liens, charges, encumbrances, rights and Interests of creditors and equity security holders. As 41

59 Pg 59 of 88 of the Effective Date, the Reorganized Debtors may operate their businesses and use, acquire, and dispose of their property without supervision of the Bankruptcy Court, and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules, other than those restrictions expressly imposed by the Plan or the Confirmation Order. 3. Compromise And Settlement Of Claims, Interests And Controversies Pursuant to section 363 of the Bankruptcy Code and Bankruptcy Rule 9019 and in consideration for the distributions and other benefits provided pursuant to the Plan, the provisions of the Plan shall constitute a good faith compromise of all Claims, Interests and controversies relating to the contractual, legal and subordination rights that a Holder of a Claim or Interest may have with respect to any Allowed Claim or Interest, or any distribution to be made on account of such Allowed Claim or Interest. The entry of the Confirmation Order shall constitute the Bankruptcy Court s approval of the compromise or settlement of all such Claims, Interests and controversies, as well as a finding by the Bankruptcy Court that such compromise or settlement is in the best interests of the Debtors, their Estates and Holders of Claims and Interests and is fair, equitable and reasonable. In accordance with the provisions of the Plan, pursuant to section 363 of the Bankruptcy Code and Bankruptcy Rule 9019(a), without any further notice to or action, order or approval of the Bankruptcy Court, after the Effective Date, the Reorganized Debtors may compromise and settle Claims against or Interests in them and Causes of Action against other Persons 4. Releases And Related Matters (a) Releases by the Debtors Pursuant to section 1123(b) of the Bankruptcy Code and to the extent allowed by applicable law, and except as otherwise specifically provided in the Plan or the Plan Supplement, for good and valuable consideration, including the service of the Released Parties to facilitate the expeditious reorganization of the Debtors and the implementation of the restructuring contemplated by the Plan, on and after the Effective Date, the Released Parties are deemed released and discharged by the Debtors, the Reorganized Debtors, and the Estates from any and all Claims, Interests, obligations, rights, suits, damages, Causes of Action, remedies and liabilities whatsoever, including any derivative claims asserted or assertable on behalf of the Debtors, whether known or unknown, foreseen or unforeseen, existing or hereinafter arising, in law, equity or otherwise, that the Debtors, the Reorganized Debtors, or the Estates have asserted or would have been legally entitled to assert in their own right (whether individually or collectively) or on behalf of the Holder of any Claim or Interest or other Person, based on or relating to, or in any manner arising from, in whole or in part, the Debtors, the Debtors restructuring, the Chapter 11 Cases, the purchase, sale or rescission of the purchase or sale of any security of the Debtors, the subject matter of, or the transactions or events giving rise to, any Claim or Interest that is treated in the Plan, the Plan Supplement, the business or contractual arrangements between any Debtor, Reorganized Debtor, Estate or non-debtor Affiliate and any Released Party, the restructuring of Claims and Interests before or during the Chapter 11 Cases, the negotiation, formulation or preparation of the Plan, the Disclosure Statement, the Plan Supplement, or related agreements, instruments or other documents, or any other act or omission, transaction, agreement, event or other occurrence taking place on or before the Effective Date; provided, however that nothing in Article X of the Plan shall be construed to release any party or entity from gross negligence, intentional fraud, willful misconduct, or criminal conduct, as determined by a Final Order of a court of competent jurisdiction. (b) Third-Party Releases by Holders of Claims or Equity Interests Except as otherwise provided in the Plan or the Plan Supplement, as of the Effective Date, each Holder of a Claim against or Interest in a Debtor, to the fullest extent permissible under applicable law, as such law may be extended or interpreted subsequent to the Effective Date, shall be deemed to have conclusively, absolutely, unconditionally, irrevocably, and forever released and discharged the Debtors, the Reorganized Debtors, the Estates, and the Released Parties from any and all Claims, Interests, obligations, rights, suits, damages, Causes of Action, remedies and liabilities whatsoever, including any derivative Claims assertable on behalf of a Debtor, whether known or 42

60 Pg 60 of 88 unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity, or otherwise, that such Person would have been legally entitled to assert (whether individually or collectively), based on or relating to, or in any manner arising from, in whole or in part, the Debtors, the Debtors restructuring, the Chapter 11 Cases, the purchase, sale, or rescission of the purchase or sale of any security of the Debtors, the subject matter of, or the transactions or events giving rise to, any Claim or Interest that is treated in the Plan or the Plan Supplement, the business or contractual arrangements between any Debtor, Reorganized Debtor, Estate or non-debtor Affiliate and any Released Party, the restructuring of Claims and Interests before or during the Chapter 11 Cases, the negotiation, formulation, or preparation of the Plan, the Disclosure Statement, the Plan Supplement, or related agreements, instruments, or other documents, or any other act or omission, transaction, agreement, event or other occurrence including or pertaining to the Debtors and taking place on or before the Effective Date, provided, however that nothing in Article X of the Plan shall be construed to release any party or entity from gross negligence, intentional fraud, willful misconduct, or criminal conduct, as determined by a Final Order of a court of competent jurisdiction; provided further, however, that Article X of the Plan shall not release the Debtors, the Reorganized Debtors), the Estates, or the Released Parties from any Cause of Action held by a governmental entity existing as of the Effective Date based on (i) the Internal Revenue Code or other domestic state, city, or municipal tax code, (ii) the environmental laws of the United States or any domestic state, city, or municipality, (iii) any criminal laws of the United States or any domestic state, city, or municipality, (iv) the Securities and Exchange Act of 1934 (as now in effect or hereafter amended), the Securities Act, or other securities laws of the United States or any domestic state, city or municipality, (v) the Employee Retirement Income Security Act of 1974, as amended, or (vi) the laws and regulations of the Bureau of Customs and Border Protection of the United States Department of Homeland Security. 5. Discharge Of the Debtors Except Upon the Effective Date, the Debtors, and each of them, shall be deemed discharged and released under section 1141(d)(1)(A) of the Bankruptcy Code from any and all Claims, including, but not limited to, demands and liabilities that arose before the Effective Date, and all debts of the kind specified in section 502 of the Bankruptcy Code, whether or not (i) a Proof of Claim based upon such debt is filed or deemed filed under section 501 of the Bankruptcy Code, (ii) a Claim based upon such debt is Allowed under section 502 of the Bankruptcy Code, (iii) a Claim based upon such debt is or has been disallowed by order of the Bankruptcy Court, or (iv) the Holder of a Claim based upon such debt accepted the Plan. (b) As of the Effective Date, except as provided in the Plan or the Confirmation Order, all Persons shall be precluded from asserting against the Debtors or the Reorganized Debtors any other or further Claims, debts, rights, Causes of Action, claims for relief, liabilities, or equity interests relating to the Debtors based upon any act, omission, transaction, occurrence, or other activity of any nature that occurred prior to the Effective Date. In accordance with the foregoing, except as provided in the Plan or the Confirmation Order, the Confirmation Order shall be a judicial determination of discharge of all such Claims and other debts and liabilities against the Debtors, pursuant to sections 524 and 1141 of the Bankruptcy Code, and such discharge shall void any judgment obtained against the Debtors at any time, to the extent that such judgment relates to a discharged Claim. 6. Injunction Except as provided in the Plan or the Confirmation Order, as of the Effective Date, all Persons that have held, currently hold, may hold, or allege that they hold, a Claim, obligation, suit, judgment, damage, demand, debt, right, Cause of Action, or liability that is released or discharged under Article X of the Plan are permanently enjoined from taking any of the following actions against the Debtors, the Reorganized Debtors, the Purchaser, and their respective Affiliates or their property on account of any such released or discharged Claim, obligation, suit, judgment, damage, demand, debt, right, Cause of Action, or liability: (a) commencing or continuing, in any manner or in any place, any action or other proceeding; (b) enforcing, attaching, collecting, or recovering in any manner any judgment, award, decree, or order; (c) creating, perfecting, or enforcing any Lien or encumbrance; (d) asserting a setoff, right of subrogation, or recoupment of any kind against any debt, liability, or obligation due to any released Person; or (e) commencing or continuing any action, in each such case 43

61 Pg 61 of 88 in any manner, in any place, or against any Person that does not comply with or is inconsistent with the provisions of the Plan or the Confirmation Order. 7. Exculpation And Limitation Of Liability None of the Released Parties shall have or incur any liability to any Entity, for any act or omission in connection with, relating to, or arising out of, the Chapter 11 Cases, the Disclosure Statement, the formulation, negotiation, or implementation of the Plan, the solicitation of acceptances of the Plan, the pursuit of Confirmation of the Plan, the Confirmation of the Plan, the consummation of the Plan, or the administration of the Plan or the property to be distributed under the Plan, or any other prepetition or postpetition act taken or omitted to be taken in connection with or in contemplation of the restructuring of the Debtors; provided, however, that the foregoing provisions of the exculpation shall have no effect on the liability of any Released Party that results from any such act or omission that is determined in a Final Order of a court of competent jurisdiction to have constituted gross negligence or willful misconduct. Nothing in the Plan shall affect the ability of the United States to pursue any non-debtors to the extent allowed by non-bankruptcy law for any liabilities that may be related to any federal tax liabilities owed by the Debtors or the Debtors Estates. Additionally, the United States may pursue police and regulatory actions or proceedings with respect to the Released Parties in the manner, and by the administrative or judicial tribunals, in which the United States could have pursued such actions or proceedings as if the bankruptcy had never been commenced. 8. Term Of Bankruptcy Injunction Or Stays Except as provided otherwise in the Plan, from and after the entry of an order closing these Chapter 11 Cases, the automatic stay of section 362(a) of the Bankruptcy Code shall terminate. 9. Post-Confirmation Date Retention Of Professionals Upon the Confirmation Date, any requirement that professionals comply with sections 327 through 331 of the Bankruptcy Code in seeking retention or compensation for services rendered after such date will terminate and the Reorganized Debtors will employ and pay professionals in the ordinary course of business. M. Retention of Jurisdiction Pursuant to sections 105(c) and 1142 of the Bankruptcy Code and notwithstanding entry of the Confirmation Order and the occurrence of the Effective Date, the Bankruptcy Court shall retain jurisdiction (unless otherwise indicated) over all matters arising in, arising out of, and/or related to, the Chapter 11 Cases and the Plan to the fullest extent permitted by law, including, among other things, jurisdiction to: (a) Resolve any matters related to the assumption, assumption and assignment, or rejection of any Executory Contract or Unexpired Lease to which any Debtor is a party or with respect to which any Debtor may be liable and to hear, determine, and, if necessary, liquidate any Claims arising therefrom; (b) Decide or resolve any motions, adversary proceedings, contested or litigated matters, and any other matters and grant or deny any applications involving the Debtors that may be pending on the Effective Date (which jurisdiction shall be non-exclusive as to any such non-core matters); (c) Enter such orders as may be necessary or appropriate to implement or consummate the provisions of the Plan, and all contracts (including the transaction agreements) instruments, releases, and other agreements or documents created in connection with the Plan, the Disclosure Statement, or the Confirmation Order; 44

62 Pg 62 of 88 (d) Resolve any cases, controversies, suits, or disputes that may arise in connection with the consummation, interpretation, or enforcement of the Plan or any contract, instrument, release, or other agreement or document that is executed or created pursuant to the Plan, or any entity s rights arising from or obligations incurred in connection with the Plan or such documents; (e) Modify the Plan before or after the Effective Date pursuant to section 1127 of the Bankruptcy Code or modify the Confirmation Order, or any contract, instrument, release, or other agreement or document created in connection with the Plan or the Confirmation Order, or remedy any defect or omission or reconcile any inconsistency in any Bankruptcy Court order, the Plan, the Confirmation Order, or any contract, instrument, release, or other agreement or document created in connection with the Plan or the Confirmation Order, in such manner as may be necessary or appropriate to consummate the Plan; (f) Hear and determine all applications for compensation and reimbursement of expenses of Professionals under the Plan or under sections 330, 331, 503(b), and 1129(a)(4) of the Bankruptcy Code; provided, however, that from and after the Confirmation Date the payment of fees and expenses by the Reorganized Debtors, including professional fees, shall be made in the ordinary course of business and shall not be subject to the approval of the Bankruptcy Court; (g) Issue injunctions, enter and implement other orders, or take such other actions as may be necessary or appropriate to restrain interference by any entity with consummation, implementation, or enforcement of the Plan or the Confirmation Order; (h) Adjudicate controversies arising out of the administration of the Estates or the implementation of the Plan; (i) Resolve any cases, controversies, suits, or disputes that may arise in connection with General Unsecured Claims, including without limitation, the Bar Date, related notice, claim objections, allowance, disallowance, estimation and distribution; (j) the Reorganized Debtors; Hear and determine Causes of Action by or on behalf of the Debtors or (k) Enter and implement such orders as are necessary or appropriate if the Confirmation Order is for any reason or in any respect modified, stayed, reversed, revoked, or vacated, or distributions pursuant to the Plan are enjoined or stayed; (l) Determine any other matters that may arise in connection with or relate to the Plan, the Disclosure Statement, the Purchase Agreement, the Confirmation Order, or any contract, instrument, release, or other agreement or document created in connection with the Plan, the Disclosure Statement, the Purchase Agreement, or the Confirmation Order; (m) Enforce all orders, judgments, injunctions, releases, exculpations, indemnifications, and rulings entered in connection with the Chapter 11 Cases; (n) Hear and determine such other matters as may be provided in the Confirmation Order or as may be authorized under the Bankruptcy Code; and (o) Enter an order closing the Chapter 11 Cases. N. Miscellaneous Provisions 1. Payment of Statutory Fees All fees payable pursuant to section 1930 of title 28 of the United States Code shall be paid on the earlier of when due or the Effective Date. 45

63 Pg 63 of Amendment Or Modification Of The Plan Subject to section 1127 of the Bankruptcy Code and, to the extent applicable, sections 1122, 1123, and 1125 of the Bankruptcy Code, the Debtors reserve the right to alter, amend, or modify the Plan at any time prior to or after the Confirmation Date but prior to the substantial consummation of the Plan. A Holder of a Claim that has accepted the Plan shall be deemed to have accepted the Plan, as altered, amended or modified, if the proposed alteration, amendment or modification does not materially and adversely change the treatment of the Claim of such Holder. 3. Substantial Consummation On the Effective Date, the Plan shall be deemed to be substantially consummated under sections 1101 and 1127(b) of the Bankruptcy Code. 4. Severability Of Plan Provisions If, prior to the Confirmation Date, any term or provision of the Plan is determined by the Bankruptcy Court to be invalid, void, or unenforceable, the Bankruptcy Court shall have the power to alter and interpret such term or provision to make it valid or enforceable to the maximum extent practicable, consistent with the original purpose of the term or provision held to be invalid, void, or unenforceable, and such term or provision shall then be applicable as altered or interpreted. Notwithstanding any such holding, alteration, or interpretation, the remainder of the terms and provisions of the Plan shall remain in full force and effect and shall in no way be affected, impaired, or invalidated by such holding, alteration, or interpretation. The Confirmation Order shall constitute a judicial determination and shall provide that each term and provision of the Plan, as it may have been altered or interpreted in accordance with the foregoing, is valid and enforceable pursuant to its terms. 5. Successors And Assigns The Plan shall be binding upon and inure to the benefit of the Debtors, and their respective successors and assigns, including, without limitation, the Reorganized Debtors. The rights, benefits, and obligations of any entity named or referred to in the Plan shall be binding on, and shall inure to the benefit of, any heir, executor, administrator, successor, or assign of such entity. 6. Revocation, Withdrawal, Or Non-Consummation The Debtors reserve the right to revoke or withdraw the Plan at any time prior to the Confirmation Date and to file other plans of reorganization. If the Debtors revoke or withdraw the Plan, or if Confirmation or consummation of the Plan does not occur, then (a) the Plan shall be null and void in all respects, (b) any settlement or compromise embodied in the Plan (including the fixing or limiting to an amount any Claim or Class of Claims), assumption of Executory Contracts or Unexpired Leases effected by the Plan, and any document or agreement executed pursuant to the Plan shall be deemed null and void, and (c) nothing contained in the Plan, and no acts taken in preparation for consummation of the Plan, shall (i) constitute or be deemed to constitute a waiver or release of any Claims by or against, or any Interests in, the Debtors or any other Person, (ii) prejudice in any manner the rights of the Debtors or any Person in any further proceedings involving the Debtors, or (iii) constitute an admission of any sort by the Debtors or any other Person. 7. Dissolution of Creditors Committee On the On the Effective Date, the Creditors Committee shall dissolve, and the members thereof shall be released and discharged from all rights and duties arising from, or related to, the Chapter 11 Cases; provided, however, that after the Effective Date, the Creditors Committee shall exist and its professionals shall continue to be retained and shall continue to be entitled to reasonable compensation by the Debtors without the need for further application to the Bankruptcy Court with respect to (a) all applications filed pursuant to sections 330 and 331 of the Bankruptcy Code and any related hearings; and (b) pending appeals of the Confirmation Order; provided further, however, that the Bankruptcy Court shall retain jurisdiction with respect to any disputes over the reasonableness of fees. 46

64 Pg 64 of Governing Law Except to the extend that the Bankruptcy Code or other federal law is applicable, or to the extent an exhibit hereto or a schedule in the Plan Supplement provides otherwise, the rights, duties and obligations arising under the Plan shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without giving effect to the principles of conflict of law thereof. 9. Time In computing any period of time prescribed or allowed by the Plan, unless otherwise set forth herein or determined by the Bankruptcy Court, the provisions of Bankruptcy Rule 9006 shall apply. 10. Additional Documents On or before the Effective Date, the Debtors may file with the Bankruptcy Court such agreements and other documents as may be necessary or appropriate to effectuate and further evidence the terms and conditions of the Plan. The Debtors and all holders of Claims or Interests receiving distributions pursuant to the Plan and all other parties in interest shall, prepare, execute, and deliver any agreements or documents and take any other actions as may be necessary or advisable to effectuate the provisions and intent of the Plan. 11. Immediate Binding Effect Notwithstanding Bankruptcy Rules 3020(e), 6004(h), or 7062 or otherwise, upon the occurrence of the Effective Date, the terms of the Plan and Plan Supplement shall be immediately effective and enforceable and deemed binding upon and inure to the benefit of the Debtors, the Purchaser, the holders of Claims and Interests, the Released Parties, the Exculpated Parties, and each of their respective successors and assigns, including, without limitation, the Reorganized Debtors. 12. Entire Agreement On the Effective Date, the Plan, the Plan Supplement, the Sale Agreement, and the Confirmation Order shall supersede all previous and contemporaneous negotiations, promises, covenants, agreements, understandings and representations on such subjects, all of which have become merged and integrated into the Plan. 13. Notice All notices, requests, and demands to or upon the Reorganized Debtors to be effective shall be in writing and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when actually delivered or, in the case of notice by facsimile transmission, when received and telephonically confirmed, addressed as follows: TOISA LIMITED Attn: Richard Baldwin c/o Brokerage and Management 40 Wall Street New York, NY and- TOGUT, SEGAL & SEGAL LLP Albert Togut Frank A. Oswald Brian F. Moore Kyle J. Ortiz One Penn Plaza, Suite

65 Pg 65 of 88 New York, New York Facsimile: (212) Counsel for Debtors and Debtors in Possession After the Effective Date, the Debtors have authority to send a notice to Entities that to continue to receive documents pursuant to Bankruptcy Rule 2002, they must file a renewed request to receive documents pursuant to Bankruptcy Rule After the Effective Date, the Debtors are authorized to limit the list of Entities receiving documents pursuant to Bankruptcy Rule 2002 to those Entities who have filed such renewed requests. 14. Exhibits herein. All Exhibits to the Plan are incorporated and are a part of the Plan as if set forth in full V. RISK FACTORS TO BE CONSIDERED Parties in interest should read and carefully consider the following factors, as well as the other information set forth in this Disclosure Statement (and the documents delivered together herewith and/or incorporated by reference herein), before deciding whether to vote to accept or to reject the Plan. This information, however, does not describe the only risks involved in connection with the Plan and its implementation. A. Failure to Confirm the Plan If the Plan is not confirmed and consummated, there can be no assurance that the Chapter 11 Cases will continue rather than be converted to chapter 7 liquidations. The Bankruptcy Court, which sits as a court of equity, may exercise substantial discretion with respect to the affairs of the Debtors during the Chapter 11 Cases. Section 1129 of the Bankruptcy Code sets forth the requirements for confirmation of a plan and requires, among other things, that the value of distributions to dissenting creditors and shareholders not be less than the value of distributions such creditors and shareholders would receive if the Debtors were liquidated under chapter 7 of the Bankruptcy Code. Although the Debtors believe that the Plan will meet such tests, there can be no assurance that the Bankruptcy Court will reach the same conclusion. Further, although the Debtors believe that the Effective Date will occur shortly after the Confirmation Date, there can be no assurance as to such timing. In addition, the Debtors could experience material adverse changes in their liquidity as a result of such delay. B. Uncertainty of Extraterritorial Recognition of Plan Confirmation Toisa Limited is incorporated pursuant to, and the rights attaching to their shares are governed by, the laws of Bermuda. Additionally, the remaining Debtors are incorporated and their interests are governed by the laws of foreign jurisdictions other the Unites States. Although the Debtors will make every effort to ensure that any Confirmation Order entered by the Bankruptcy Court and the steps taken pursuant to the Confirmation Order to implement the restructuring are recognized and are effective. It is possible that if a creditor or stakeholder were to challenge the restructuring, a foreign court may refuse to recognize the effect of the Confirmation Order. C. Potential Adverse Effects of Chapter 11 Although the Debtors have sought to make their stay in chapter 11 as brief as possible and to obtain relief from the Bankruptcy Court so as to minimize any potential disruption to their business operations, it is possible that the commencement of the Chapter 11 Cases could materially adversely affect the relationship among the Debtors and their customers, employees, vendors and service providers. Moreover, because the Debtors business operations implicate maritime law, various foreign creditors could assert maritime liens against the Debtors assets. The determination of what claim constitutes a maritime lien is determined by local law on a case by case basis. Thus, various interested parties may attempt to seize assets located outside of the United States to the detriment of the Debtors, 48

66 Pg 66 of 88 their estates and creditors, or take other actions in contravention of the automatic stay of section 362 of the Bankruptcy Code. D. No Assurance of Ultimate Recoveries There can be no assurances of the actual recoveries to the Debtors claimholders. The Debtors cannot assure their claimholders that they will be able to resell any consideration received in respect of their claims at current values or at all. E. Classification and Treatment of Claims and Interests Section 1122 of the Bankruptcy Code requires that the Plan classify Claims against and Interests in the Debtors. The Bankruptcy Code also provides that, except for certain Claims classified for administrative convenience, the Plan may place a Claim or Interest in a particular Class only if such Claim or Interest is substantially similar to the other Claims or Interests of such Class. The Debtors believe that all Claims and Interests have been appropriately classified in the Plan. To the extent that the Bankruptcy Court finds that a different classification is required for the Plan to be confirmed, the Debtors currently anticipate that they would seek to (i) modify the Plan to provide for whatever classification might be required for confirmation and (ii) use the acceptances received from any creditor pursuant to the solicitation for the purpose of obtaining the approval of the Class or Classes of which such creditor ultimately is deemed to be a member. Any such reclassification of creditors, although subject to the notice and hearing requirements of the Bankruptcy Code, could adversely affect the Class in which such creditor was initially a member, or any other Class under the Plan, by changing the composition of such Class and the vote required for approval of the Plan. There can be no assurance that the Bankruptcy Court, after finding that a classification was inappropriate and requiring a reclassification, would approve the Plan based upon such reclassification without requiring the Debtors to resolicit votes. The Bankruptcy Code also requires that the Plan provide the same treatment for each Claim or Interest of a particular Class unless the holder of a particular Claim or Interest agrees to a less favorable treatment of its Claim or Interest. The Debtors believe that they have complied with this requirement. To the extent that the Bankruptcy Court finds that the Plan does not satisfy such requirement, the Bankruptcy Court could deny confirmation of the Plan or the Debtors could be required to modify the Plan. F. Risk of Non-Confirmation of the Plan Although the Debtors believe that the Plan will satisfy all requirements necessary for confirmation by the Bankruptcy Court, there can be no assurance that the Bankruptcy Court will reach the same conclusion or that modifications of the Plan will not be required for confirmation or that such modifications would not necessitate resolicitation of votes. G. Non-Consensual Confirmation In the event any impaired class of claims or interests entitled to vote on a plan of reorganization does not accept a plan of reorganization, a bankruptcy court may nevertheless confirm such plan at the proponent s request if at least one impaired class has accepted the plan (with such acceptance being determined without including the vote of any insider in such class), and as to each impaired class that has not accepted the plan, the bankruptcy court determines that the plan does not discriminate unfairly and is fair and equitable with respect to the dissenting impaired classes. H. Risk Related to Final Cash Collateral Orders In the event of a breach of one of the milestones or another event of default under the final cash collateral orders entered in these Chapter 11 Cases, a lender may seek, among other things, to 49

67 Pg 67 of 88 exercise certain remedies with respect to their collateral, and to take certain other actions against the Debtors. I. Risk Related to the Transactions Proposed in the Plan Although the Debtors believe that they will be able to obtain proposals for the Newbuild Tanker Sale Transaction and the Oceangoing Equity Sale Transaction, the Debtors are not certain whether offers will be made, what the content of those offers will be, or whether any a purchaser(s) will enter into a definitive transaction. Accordingly, the Debtors are not certain what proceeds, if any, will be available for the respective treatment proposed under the Plan. J. The Debtors Have No Duty to Update The statements contained in this Disclosure Statement are made by the Debtors as of the Petition Date, unless otherwise specified herein, and the delivery of this Disclosure Statement after that date does not imply that there has been no change in the information set forth herein since that date. The Debtors have no duty to update this Disclosure Statement unless otherwise ordered to do so by the Bankruptcy Court. K. Failure to Identify Litigation Claims or Projected Objections No reliance should be placed on the fact that particular litigation claim or projected objection to a particular Claim or Interest is, or is not, identified in this Disclosure Statement. The Debtors may seek to investigate, file, and prosecute Claims and Interests and may object to Claims or Interests after the Confirmation or Effective Date of the Plan irrespective of whether this Disclosure Statement identifies such Claims or Interests or objections to such Claims or Interests. L. No Waiver of Right to Object or Right to Recover Transfers and Assets The vote by a holder of a Claim or Interest for or against the Plan does not constitute a waiver or release of any claims, causes of action, or rights of the Debtors (or any entity, as the case may be) to object to that holder s Claim or Interest, or recover any preferential, fraudulent, or other voidable transfer of assets, regardless of whether any claims or causes of action of the Debtors or their respective Estates are specifically or generally identified in this Disclosure Statement. M. Information Was Provided by the Debtors and Was Relied Upon by the Debtors Advisors The Debtors advisors have relied upon information provided by the Debtors in connection with the preparation of this Disclosure Statement. Although the Debtors advisors have performed certain limited due diligence in connection with the preparation of this Disclosure Statement, they have no independently verified the information contained in this Disclosure Statement. N. No Assurance of Ultimate Recoveries; Uncertainty of Financial Projections The Financial Projections to be attached hereto as Appendix D includes projections covering the Reorganized Debtors operations. These projections are based on assumptions that are an integral part of the projections, including confirmation and consummation of the Plan in accordance with its terms, the anticipated future performance of the Debtors, industry performance, general business and economic conditions and other matters, many of which are beyond the control of the Reorganized Debtors and some or all of which may not materialize. In addition, unanticipated events and circumstances occurring after the date hereof may affect the actual financial results of the Reorganized Debtors operations. These variations may be material and may adversely affect the ability of the Reorganized Debtors to make payments with respect to their indebtedness. Because the actual results achieved may vary from projected results, perhaps significantly, the projections should not be relied upon as a guaranty or other assurance of the actual results that will occur. 50

68 Pg 68 of 88 The business plan was developed by the Debtors with the assistance of their advisors. There can be no assurances that the Debtors business plan will not change, perhaps materially, as a result of decisions management and the new board of directors make after fully evaluating the strategic direction of the Debtors and their business plan. Any deviations from the Debtors existing business plan would necessarily cause a deviation from the attached projections, and could result in materially different outcomes from those projected. O. Uncertainty of Post-Confirmation Value The estimate of the post-confirmation value of the Reorganized Debtors is to be attached hereto as Appendix E. These valuations are based on assumptions that are an integral part of the projections, including confirmation and consummation of the Plan in accordance with its terms, the anticipated future performance of the Debtors, industry performance, general business and economic conditions and other matters, many of which are beyond the control of the Reorganized Debtors and some or all of which may not materialize. The valuation assumptions herein are not a prediction of postconfirmation market trading value of the trading prices of the Reorganized Debtors assets or equity. P. Business and Operational Risks 1. Reliance on Management Companies The Debtors rely on the efforts and abilities of their Management Companies, to, among other things, source and negotiate charters, manage customer relationships, oversee management of charter contracts, monitor and manage third-party technical ship management companies, and provide general administrative and strategic management services, including financial and corporate management, business development, and relationship management with the Debtors banks and lenders. The Management Companies provide the Debtors with a competitive advantage in sourcing charter contracts and controlling both the cost and quality of the vessels operations. The Debtors may not be able to retain another management company to manage and operate their business effectively, and to oversee and coordinate with the technical managers of each of the Vessels. The loss of the services of Management Companies for any significant period of time could adversely affect the Debtors business prospects and financial conditions or Management Companies inability to attract and retain qualified personnel could have a material adverse effect on the Debtors or Management Companies capacity to manage their business. The Debtors ability to compete for and enter into new time charters and to expand the Debtors relationships with existing charterers will depend largely on the Management Companies reputation and relationships in the shipping industry. If the Management Companies suffer material damage to their reputation or relationships, it may harm the Debtors ability to renew existing time charters upon their expiration, obtain new charters, successfully interact with shipyards, obtain contractual arrangements with third parties on commercially acceptable terms, or maintain satisfactory relationships with the Debtors charterers and suppliers, which may have a materially adverse effect on the Debtors operations and cash flows. Additionally, there may be particular litigation claims or contingent pension or tax claims or liabilities that may be assessed against the Management Company, which may be subject to claims for reimbursement, contribution or indemnification from the applicable Debtors under the Management Agreements or applicable law, which are not identified in this Disclosure Statement. 2. Volatility of Shipping Market The international shipping industry has suffered a severe downturn in recent years due to a number of factors, including, but not limited to, global and regional economic conditions, the state of international trade and changes in transportation patterns in the shipping industry. A combination of these factors has influenced overall supply and demand, bringing vessel charter rates toward historic lows. Moreover, the downturn in the shipping industry has in part been driven by an oversupply of newbuildings. The decline and volatility in charter rates in the shipping industry and increased supply of shipping vessels affected the value of the Debtors Vessels and negatively affected the Debtors cash flows and liquidity. The Debtors can offer no assurance that the shipping market will improve, and if the 51

69 Pg 69 of 88 weak shipping market persists, it will continue to negatively affect the Debtors results of operations and financial condition. As described above, the Debtors profitability is highly dependent on the charter rates the Debtors are able to charge. The international shipping industry is cyclical with attendant volatility in terms of charter hire rates and profitability. Fluctuations in charter rates result from changes in the supply and demand for vessel capacity, which are driven by global fleet capacity and utilization and changes in the supply and demand for major products internationally transported by ships. Because the Debtors charter most of their vessels pursuant to short-term charter hires, the Debtors are exposed to changes in charter hire rates in the shipping industry, and such changes may affect the Debtors earnings and the value of their vessels at any given time. 3. Charter Defaults When the Debtors enter into a charter, charter rates under that charter are fixed for the term of the charter. The ability of each of the Debtors charterers to perform its obligations under the charter depends on a number of factors that are beyond the Debtors control and may include, among other things, general economic conditions, the condition of the maritime industries generally, the overall financial condition of the charterer, charter rates received for specific types of vessels and various expenses. If the Debtors charterers default on their charters, the Debtors will seek the remedies available to them, which may include arbitration or litigation to enforce the contracts, although such efforts may not be successful. If their charterers fail to pay their obligations, the Debtors would have to attempt to recharter their vessels, likely at lower charter rates, which would affect the Debtors results of operations. Additionally, the Debtors will not receive any revenues from such a vessel while it is un-chartered, but would still be required to pay expenses necessary to maintain and insure the vessel and service any indebtedness on it. The combination of a surplus of capacity and the expected increase in the size of the world fleet over the next few years may make it difficult to secure substitute employment for any of our vessels if our counterparties fail to perform their obligations under the currently arranged charters, and any new charter arrangements we are able to secure may be at lower rates. The loss of any of our charterers, charters or vessels, or a decline in payments under our time charters, could have a material adverse effect on our business, results of operations and financial condition, and revenues and cash flow. 4. Risks Related to Foreign Ports The Debtors currently employ all of their vessels under charter contracts with unaffiliated parties. Under the terms of these charters, and consistent with shipping industry practice, the charterer of each vessel pays the Debtors a daily charter rate and directs the vessel s route, loading and discharge ports and cargoes carried. While the Debtors do not control the routes or ports of call made by their vessels, all of the charter contracts under which their vessels operate contain express prohibitions proscribing trades of their vessels in countries or areas that are subject to sanctions or blacklists by the United Nations or major trading nations as well as certain ice bound areas. The value of the Debtors may be adversely affected by the consequences of war, the effects of terrorism, civil unrest and governmental actions in these and surrounding countries. Although the Debtors believe that they are in compliance with all applicable sanctions and embargo laws and regulations, and intend to maintain such compliance, there can be no assurance that the Debtors 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. Moreover, the Debtors charterers may violate applicable sanctions and embargo laws and regulations as a result of actions that do not involve the Debtors or their vessels, and those violations could in turn negatively affect the Debtors reputation. Terrorist attacks like those in New York in 2001, London in 2005 and 2017, Mumbai in 2008, and Paris 2016, and other countries and the continuing response of the world community to these attacks, as well as the threat of future terrorist attacks around the world, continue to cause uncertainty in the world financial markets and may affect the Debtors business, results of operations and financial condition. Political conflicts, acts of terrorism and piracy could also cause partial or complete closure of 52

70 Pg 70 of 88 ports and sea passages, potentially resulting in higher costs, vessel delays or cancelations on some of the Debtors charters. 5. Smuggling The Debtors vessels may call in areas where smugglers attempt to hide drugs, weapons and other contraband on vessels, with or without the knowledge of crew members. To the extent their Vessels are found with contraband, whether with or without the knowledge of any crew member, the Debtors may face governmental or other regulatory claims which could have an adverse effect on the Debtors business, results of operations, cash flows and financial condition. 6. Requisition of Vessels A government could requisition one or more of the Debtors vessels for title or hire, or seize one or more of their vessels. Requisition for title occurs when a government takes control of a vessel and becomes her owner. 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 a period of war or emergency, although governments may elect to requisition vessels in other circumstances. Government requisition of one or more of the Debtors vessels would negatively impact their revenues. 7. Arrest of Vessels Crew members, suppliers of goods and services to a vessel, shippers of cargo, vessel financing participants, charter parties, and other parties may be entitled to a maritime lien against a vessel for unsatisfied debts, claims or damages. In many jurisdictions, a maritime lien holder may enforce its lien by arresting a vessel through foreclosure proceedings. The arrest or attachment of one or more of the Debtors vessels could interrupt their cash flow and require them to make significant payments to have the arrest lifted. 8. Vessel Damage and Maintenance The operation of the Debtors ocean-going vessels entails the possibility of certain inherent risks, such as marine disasters, including damage or destruction of the vessel due to accident, the loss of a vessel due to piracy or terrorism, loss of life, damage or destruction of cargo and similar events that may cause a loss of revenue from affected vessels and could damage the Debtors business reputation, which may in turn lead to loss of business. If the Debtors vessels suffer damage, they may need to be repaired at a drydocking facility. The costs of drydock repairs are unpredictable and can be substantial. In addition, space at drydocking facilities is sometimes limited and not all drydocking facilities are conveniently located. The Debtors may be unable to find space at a suitable drydocking facility or the vessel in issue may be forced to travel to a drydocking facility that is distant from its current position. The loss of earnings while their vessels are being repaired and repositioned, as well as the actual cost of these repairs, would decrease the Debtors earnings. The Debtors may not have insurance that is sufficient to cover all or any of these costs or losses and may have to pay drydocking costs not covered by their insurance. Further, the involvement of the Debtors vessels in a disaster or delays in delivery or loss of cargo may harm their reputation as a safe and reliable vessel operator and could cause them to lose business. The operation of shipping vessels may create operational risks, such as damage to the vessel. Vessels damaged due to treatment during operation may be more susceptible to breach while at sea. Breaches of a vessel s hull may lead to the flooding, which in turn may lead to loss of a vessel. If the Debtors do not adequately maintain their vessels, they may be unable to prevent these events. The occurrence of such an event could have a material adverse effect on the Debtors business, financial condition and results of operations. 53

71 Pg 71 of Insurance The Debtors carry insurance to protect against most of the accident-related risks involved in the conduct of their business and maintain environmental damage and pollution insurance coverage. The Debtors do not carry insurance covering the loss of revenue resulting from vessel off-hire time. The Debtors believe that their insurance coverage is adequate to protect them against most accident-related risks involved in the conduct of their business and that they maintain appropriate levels of environmental damage and pollution insurance coverage. However, there can be no assurance that all risks are adequately insured against, that any particular claim will be paid or that the Debtors will be able to procure adequate insurance coverage at commercially reasonable rates in the future. More stringent environmental regulations in the past have resulted in increased costs for insurance against the risk of environmental damage or pollution. In the future, the Debtors may be unable to procure adequate insurance coverage to protect them against environmental damage or pollution. Moreover, in certain jurisdictions, pollution may result in criminal liability. Criminal liability for a pollution incident could not only result in the Debtors incurring substantial penalties or fines, but may also, in some jurisdictions, facilitate civil liability claims for greater compensation than would otherwise have been payable. Additionally, the Debtors are indemnified for legal liabilities incurred while operating their vessels through membership in protection and indemnity associations. The Debtors cannot guarantee that the protection and indemnity associations to which they belong will remain viable or that they will not become subject to additional funding calls which could adversely affect the Debtors. 10. Fuel Prices The price of bunker fuel is correlated with crude oil prices, which in turn have historically exhibited significant volatility in short periods of time and have recently been at, or close to, historic lows. Furthermore, crude oil prices are influenced by a host of economic and geopolitical factors. While the Debtors generally will not bear the cost of fuel, or bunkers for vessels operating on charters, fuel is a significant factor in negotiating charter rates. In addition, upon redelivery of vessels at the end of a period time or trip time charter, the Debtors may be obligated to repurchase bunkers on board at prevailing market prices, which could be materially different than fuel prices at the inception of the charter period. Changes in the price of fuel may adversely affect the Debtors profitability. The price and supply of fuel is unpredictable and fluctuates based on events outside the Debtors control. Further, fuel may become much more expensive in the future, which may reduce the profitability and competitiveness of the Debtors business versus other forms of transportation. 11. Crew Costs Crew costs are a significant expense for the Debtors under their charters. Limited supply of, and increased demand for, well-qualified crew, due to the increase in the size of the global shipping fleet, may create upward pressure on crewing costs, which the Debtors bear under their charters. Increases in crew costs may adversely affect the Debtors profitability. 12. Vessel Replacement and Technological Innovation In general, expenditures necessary for maintaining a vessel in good operating condition increase as a vessel ages. Older vessels are typically less fuel efficient and more costly to maintain than more recently constructed vessels due to improvements in engine technology, increased cargo insurance rates, and less fuel-efficiency. In addition, governmental regulations, including environmental regulations, safety or other equipment standards related to the age of vessels may require expenditures for alterations to existing equipment or the addition of new equipment to the Debtors vessels and may restrict the type of activities in which their vessels may engage. The Debtors cannot give assurances that, as their vessels age, market conditions will justify those expenditures or enable the Debtors to operate their vessels profitably during the remainder of their useful lives. 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 54

72 Pg 72 of 88 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. As new shipping vessels are built that are more efficient or more flexible or have longer physical lives than the Debtors vessels, competition from these more technologically advanced vessels could adversely affect the amount of charter hire payments the Debtors receive for their vessels once charters expire, and the resale value of their vessels could significantly decrease. As a result, the Debtors business, results of operations, cash flows and financial condition could be adversely affected. Q. Legal and Regulatory Risks 1. Litigation The Debtors are, from time to time, subject to various asserted or unasserted legal proceedings and claims. Any such claims, regardless of merit, could be time-consuming and expensive to defend and could divert management s attention and resources. While management believes the Debtors have adequate insurance coverage and accrue loss contingencies for all known matters that are probable and can be reasonably estimated, the Debtors cannot ensure that the outcome of all current or future litigation will not have a material adverse effect on the Debtors and their results of operations. 2. Global Regulatory Regimes and Anticorruption Laws There is a risk that countries could, in the wake of the global financial and economic crisis or in response to real or perceived currency manipulations or trade imbalances, resort to protectionist measures or make changes to the regulatory regimes in which the Debtors operate in order to protect and preserve domestic industries. Such measures could have a material adverse effect on the Debtors business, financial condition and results of operations. Additionally, the Debtors operations are subject to numerous laws and regulations in the form of international conventions and treaties, national, state and local laws and national and international regulations in force in the jurisdictions in which the Debtors vessels operate or will be registered, which could significantly affect the ownership and operation of the vessels. Compliance with such laws, regulations and standards, where applicable, may require installation of costly equipment or operational changes and may affect the resale value or useful lives of the Debtors vessels. The Debtors may also incur additional costs in order to comply with other existing and future regulatory obligations, which could have a material adverse effect on the Debtors business, results of operations, cash flows and financial condition. Failure to comply with applicable laws and regulations may result in administrative and civil penalties, criminal sanctions or the suspension or termination of the Debtors operations. Applicable worldwide anti-corruption laws generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or retaining business. The Debtors activities create the risk of unauthorized payments or offers of payments by one of their employees or agents that could be in violation of the applicable anti-corruption laws. The Debtors maintain policies that prohibit bribery including restrictions on giving or receiving items or services of value to influence business decisions. Although the Debtors have these policies in place, there can be no assurance that these policies will protect the Debtors from governmental investigations or inquiries surrounding actions of their employees or agents. If the Debtors are found to be liable for violations of applicable anti-corruption laws (either due to their own acts or inadvertence, or due to the acts or inadvertence of others), the Debtors could suffer from civil and criminal penalties or other sanctions. 3. Inspections and Surveys A variety of governmental and private entities subject the vessels to both scheduled and unscheduled inspections. These entities include the local port authorities, (applicable national authorities such as the United States Coast Guard and harbor masters), classification societies, flag state administrations (countries of registry) and charterers. Some of these entities require the Debtors to obtain permits, licenses, certificates and other authorizations for the operation of their vessels. Moreover, the Debtors new secured credit facilities documents will require the vessel owners to submit the vessels to the surveys required for ship classification purposes. Their failure to maintain necessary permits, licenses, 55

73 Pg 73 of 88 certificates or authorizations could require them to incur substantial costs or temporarily suspend the operation of one or more of its vessels. Additionally, failure to submit to surveys, as may be required by the Debtors new secured credit facilities, could cause the Debtors to be in default thereunder. In recent periods, heightened levels of environmental and operational safety concerns among insurance underwriters, regulators and charterers have led to greater inspection and safety requirements on all vessels and may accelerate the scrapping of older vessels throughout the shipping industry. Increasing environmental concerns have created a demand for vessels that conform to the stricter environmental standards. The Debtors believe that the operation of their vessels is in substantial compliance with applicable environmental laws and regulations and that its vessels have all material permits, licenses, certificates or other authorizations necessary for the conduct of their operations. However, because such laws and regulations are frequently changed and may impose increasingly stricter requirements, the Debtors cannot predict the ultimate cost of complying with these requirements, or the impact of these requirements on the resale value or useful lives of their vessels. In addition, a future serious marine incident that results in significant oil pollution or otherwise causes significant adverse environmental impact, could result in additional legislation or regulation that could negatively affect their profitability. The hull and machinery of every commercial vessel must be classed by a classification society authorized by its country of registry. Additionally, the Debtors vessels undergo annual surveys, intermediate surveys and special surveys. Every vessel is also required to be drydocked for inspection of the underwater parts of such vessel. 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, therefore, would be unemployable, potentially causing a negative impact on the Debtors revenues due to the loss of revenues from such vessel until it is able to trade again. R. No Representation Outside This Disclosure Statement Are Authorized No representations concerning or related to the Debtors, the Chapter 11 Cases, or the Plan are authorized by the Bankruptcy Court or the Bankruptcy Code, other than as set forth in this Disclosure Statement. Any representations or inducements made to secure your acceptance or rejection of the Plan that are other than as contained in, or included with, this Disclosure Statement should not be relied upon by you in arriving at your decision. S. No Legal or Tax Advice Is Provided to You by This Disclosure Statement The contents of this Disclosure Statement should not be construed as legal, business, or tax advice. Each holder of a Claim or Interests should consult his, her, or its own legal counsel and accountant as to legal, tax, and other matters concerning his, her, or its Claim or Interest. This Disclosure Statement is not legal advice to you. This Disclosure Statement may not be relied upon for any purpose other than to determine how to vote on the Plan or object to confirmation of the Plan. T. No Admission Made Nothing contained in the Plan will constitute an admission of, or be deemed evidence of, the tax or other legal effects of the Plan on the Debtors or on holders of Claims or Interests. VI. CERTAIN INCOME TAX CONSEQUENCES OF THE PLAN The following is a summary of certain U.S. federal income tax consequences of the Plan to U.S. Holders and Non-U.S. Holders (as defined below) of certain Allowed Claims that are entitled to vote to accept or reject the Plan. This summary is for informational purposes only and is based on the Internal Revenue Code of 1986, as amended (the Tax Code ), U.S. Treasury regulations promulgated thereunder, and administrative and judicial interpretations and practice, all as in effect on the date of this Disclosure Statement and all of which are subject to change or differing interpretations, with possible retroactive effect. Due to the lack of definitive judicial and administrative authority in a number of areas, substantial uncertainty may exist with respect to some of the tax consequences described herein. No opinion of counsel has been obtained as to any of the tax consequences of the Plan and no ruling will be 56

74 Pg 74 of 88 sought from the IRS with respect to any statement or conclusion in this summary. No representations are being made regarding the particular tax consequences of the confirmation or implementation of the Plan as to any creditor or equity interest-holder and there can be no assurance that the IRS would not assert, or that a court would not sustain, positions different from those discussed herein. The following discussion does not address foreign, state, or local tax consequences of the Plan, nor does it purport to address all aspects of U.S. federal income taxation applicable to special classes of taxpayers (including, without limitation, banks and certain other financial institutions, insurance companies, tax-exempt organizations, governmental entities, partnerships or other pass-through entities, real estate investment trusts, regulated investment companies, controlled foreign corporations, passive foreign investment companies, persons whose functional currency is not the U.S. dollar, dealers subject to the mark-to-market rules of Section 475 of the Tax Code, employees of the Debtors, and persons who received their Allowed Claims pursuant to the exercise of an employee stock option or otherwise as compensation). Furthermore, the following discussion does not address U.S. federal taxes other than income taxes (including, without limitation, estate and gift taxes). U.S. Holders and Non-U.S. Holders should consult their tax advisors regarding the tax consequences to them of the transactions contemplated by the Plan, including U.S. federal, state, local and foreign tax consequences. As an initial matter, the Debtors, as non-u.s. taxpayers, do not anticipate recognizing cancellation of indebtedness income as a result of the Facility Exchanges for U.S. federal income tax purposes. In addition, the Debtors do not anticipate recognizing any other income or gain as a result of Facility Exchanges for U.S. federal income tax purposes. For purposes of this discussion, a U.S. Holder is a beneficial holder of an Allowed Claim that is, for U.S. federal income tax purposes (1) an individual that is a citizen or resident of the United States, (2) a corporation, or other entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States, any state thereof or the District of Columbia, (3) an estate, the income of which is subject to U.S. federal income taxation regardless of its source, or (4) a trust if (i) a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of the substantial decisions of such trust or (ii) such trust has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person. A Non-U.S. Holder is a beneficial holder (other than any entity treated as a partnership for U.S. federal income tax purposes) of Allowed Claims that is not a U.S. Holder. If a partnership (including any entity treated as a partnership for U.S. federal income tax purposes) holds an Allowed Claim, as the case may be, the U.S. federal income tax consequences to the partners of such partnership will depend on the activities of the partnership and the status of the partners. A partnership considering participating in the Plan should consult its tax advisor regarding the consequences to the partnership and its partners of the Plan. A. Certain U.S. Federal Income Tax Consequences to U.S. Holders A U.S. Holder could be subject to U.S. federal income tax on any gain, accrued interest or accrued market discount recognized in a transaction contemplated by the Plan. Pursuant to the Plan, in full satisfaction and release of their Allowed Claims, each U.S. Holder of Claims in Classes 2, 3, 4, 5, 6, 7, 8, 9, 10, 12, 13, 14 will receive its pro rata share of an amended and restated facility, as applicable (each a Facility Exchange, and collectively, the Facility Exchanges ). The Reorganized Debtors intend to follow, for U.S. federal income tax purposes, the treatment of the Facility Exchanges as described in the Plan. The IRS could take the position, however, that the Facility Exchanges, the U.S. Holders, and/or the Debtors should be treated for U.S. federal income tax purposes in some manner other than that set forth in the Plan. The Debtors intend to take the position that each of the allowed claims and the applicable amended and restated facilities should constitute securities for U.S. federal income tax purposes. (a) Facility Exchanges The U.S. federal income tax consequences of the Facility Exchanges will depend, in part, on whether the U.S. Holders Allowed Claims constitute securities for U.S. federal income tax purposes. Whether a debt instrument constitutes a security is determined based on all the facts and circumstances 57

75 Pg 75 of 88 Most authorities have held that the length of the term of a debt instrument at initial issuance is an important factor in determining whether such instrument is a security for U.S. federal income tax purposes. These authorities have indicated that a term of less than five years is evidence that the instrument is not a security, whereas a term of ten years or more is evidence that it is a security. There are other factors that may be relevant to the determination, including the security for payment, the creditworthiness of the obligor, the subordination or lack thereof with respect to other creditors, the right to vote or otherwise participate in the management of the obligor, convertibility of the instrument into equity of the obligor, whether payments of interest are fixed, variable or contingent and whether such payments are made on a current basis or accrued. The Allowed Claims each have a term of less than ten years. It is unclear whether U.S. Holders Allowed Claims constitute securities for U.S. federal income tax purposes and each U.S. Holder should consult its tax advisor regarding the treatment of such obligations as securities. The Debtors intend to take the position that each of the Allowed Claims and the applicable amended and restated facilities should constitute securities for U.S. federal income tax purposes. (i) Treatment as a Recapitalization To the extent that a U.S. Holder s allowed Facility Claim is characterized as a security for U.S. federal income tax purposes, the Facility Exchanges should be treated as a recapitalization for U.S. federal income tax purposes and the amended and restated facility should also be characterized as a security for U.S. federal income tax purposes. If a Facility Exchange is treated as a recapitalization, a U.S. Holder of an allowed Facility Claim generally should not recognize capital gain or loss pursuant to the Facility Exchange. A U.S. Holder s aggregate tax basis in the applicable amended and restated facility it receives in a Facility Exchange should be equal to the tax basis of such U.S. Holder s allowed Facility Claim surrendered in exchange therefor. Such U.S. Holder s holding period for such amended and restated facility should include its holding period for the allowed claim surrendered in exchange therefor. (ii) Treatment as a Taxable Exchange Subject to the discussion below regarding accrued interest, if an allowed claim is not characterized as securities, and as a result the Facility Exchange is not treated as a recapitalization, and the transactions contemplated by the Plan are otherwise taxable to a U.S. Holder, such U.S. Holder should recognize gain or loss equal to the difference between (a) the adjusted issue price, as determined for U.S. federal income tax purposes, of such U.S. Holder s pro rata share of the applicable amended and restated facility received pursuant to the Plan (which generally should be deemed to equal the stated principal amount if neither the amended and restated facility nor the allowed claim surrendered in exchange therefor is considered publicly traded under applicable Treasury regulations) over (b) such U.S. Holder s tax basis in its allowed claim surrendered pursuant to the Plan. Such gain or loss should be capital gain or loss (subject to the market discount rules described below) and should be long-term capital gain or loss if the U.S. Holder s holding period for its surrendered allowed claim exceeded one year. A U.S. Holder s tax basis in its pro rata share of the applicable amended and restated facility received pursuant to the Plan should equal the fair market value of such interests on the Effective Date. A U.S. Holder s holding period for its pro rata share of the applicable amended and restated facility received pursuant to the Plan should begin on the day following the Effective Date. (b) Accrued Interest To the extent that any consideration is allocated to accrued but unpaid interest, a U.S. Holder of an allowed claim that has not previously included such accrued interest in taxable income for U.S. federal income tax purposes should recognize ordinary income equal to the fair market value of any property received (including the U.S. Holder s pro rata share of the applicable amended and restated facility) with respect to such claims for accrued interest. Pursuant to the Plan, the Reorganized Debtors will allocate for U.S. federal income tax purposes all distributions in respect of any claim first to the principal amount of such claim, and thereafter to accrued but unpaid interest. No assurance can be given that the IRS will not challenge such allocation. If a distribution with respect to a claim is entirely allocated to the principal amount of such claim, a holder may be entitled to claim a loss to the extent of any accrued but unpaid interest on the claim that was previously included in the holder s gross income. U.S. Holders should consult their tax advisors regarding the particular U.S. federal income tax consequences applicable to them under the Plan in respect of allowed claims for accrued interest, 58

76 Pg 76 of 88 including the character of any loss claimed with respect to accrued but unpaid interest previously included in gross income. (c) Market Discount A U.S. Holder that purchased an allowed claim from a prior holder at a discount to the then-adjusted issue price of such allowed claim may be subject to the market discount rules of the Tax Code. Under those rules, assuming such U.S. Holder has not made an election to amortize the market discount into income on a current basis, any gain recognized on the exchange of such allowed claim (subject to a de minimis rule and exceptions for certain nonrecognition transactions) generally would be characterized as ordinary income to the extent of the accrued market discount on such allowed claim as of the Effective Date. U.S. Holders of allowed claims should consult their tax advisors as to the tax consequences of the market discount rules, including, without limitation, the possible application of such rules on the Facility Exchanges. U.S. Holders should consult their tax advisors regarding the tax consequences to them of the Facility Exchanges and transactions contemplated by the Plan and information that may be relevant to their particular situation and circumstances. B. Certain U.S. Federal Income Tax Consequences to Non-U.S. Holders A Non-U.S. Holder generally should not be subject to U.S. federal income tax on any gain, accrued interest or accrued market discount recognized in a the Facility Exchanges or transaction contemplated by the Plan, unless the gain, accrued interest or accrued market discount, as the case may be, is effectively connected with the Non-U.S. Holder s conduct of a trade or business in the United States (and, if a tax treaty applies, the Non-U.S. Holder maintains a U.S. permanent establishment to which the gain is attributable). To the extent that such gain, accrued interest or accrued market discount, as the case may be, is effectively connected with the Non-U.S. Holder s conduct of a U.S. trade or business (and, if a tax treaty applies, the Non-U.S. Holder maintains a U.S. permanent establishment to which the gain is attributable), the Non-U.S. Holder generally will be subject to U.S. federal income tax on a net basis in the same manner as if the Non-U.S. Holder were a U.S. Holder. Such gain, accrued interest or accrued market discount, as the case may be, by a corporate Non-U.S. Holder may also be subject to an additional U.S. federal branch profits tax (and if applicable, a lower treaty rate). Non-U.S. Holders should consult their tax advisors regarding the tax consequences to them of the transactions contemplated by the Plan and information that may be relevant to their particular situation and circumstances. C. Importance of Obtaining Professional Tax Assistance THE FOREGOING DISCUSSION IS INTENDED ONLY AS A SUMMARY OF CERTAIN INCOME TAX CONSEQUENCES OF THE PLAN AND IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING WITH A TAX PROFESSIONAL. THE ABOVE DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. THE TAX CONSEQUENCES ARE IN MANY CASES UNCERTAIN AND MAY VARY DEPENDING ON A CLAIM OR U.S. HOLDER S PARTICULAR CIRCUMSTANCES. ACCORDINGLY, U.S. HOLDERS OF CLAIMS SHOULD CONSULT THEIR TAX ADVISORS ABOUT THE UNITED STATES FEDERAL, STATE, AND LOCAL, AND APPLICABLE FOREIGN INCOME AND OTHER TAX CONSEQUENCES OF THE PLAN. VII. CONFIRMATION OF THE PLAN A. Confirmation Hearing Section 1128(a) of the Bankruptcy Code requires the Bankruptcy Court, after appropriate notice, to hold a hearing on confirmation of a chapter 11 plan. The Bankruptcy Court has scheduled the 59

77 Pg 77 of 88 Confirmation Hearing to commence on 2017 at :.m. (Eastern Time). The Confirmation Hearing may be adjourned from time-to-time by the Debtors or the Bankruptcy Court without further notice except for an announcement of the adjourned date made at the Confirmation Hearing or any subsequent adjourned Confirmation Hearing. B. Objections Section 1128 of the Bankruptcy Code provides that any party in interest may object to the confirmation of a plan. Objections to confirmation of the Plan are governed by Bankruptcy Rule Any objection to confirmation of the Plan must be in writing, must conform to the Bankruptcy Rules and the Local Bankruptcy Rules for the Bankruptcy Court, must set forth the name of the objector, the nature and amount of Claims or Interests held or asserted by the objector against the Debtors estates or property, the basis for the objection and the specific grounds therefor, and must be filed with the Bankruptcy Court, with a copy to the chambers of The Honorable Shelly C. Chapman, United States Bankruptcy Court for the Southern District of New York, One Bowling Green, New York, New York, together with proof of service thereof, and served upon the parties listed below so as to be received no later than the Plan Objection Deadline of at :00 p.m. (Eastern Time): TOISA LIMITED, ET AL, c/o Brokerage & Management Corporation 40 Wall Street New York, New York (212) OFFICE OF THE UNITED STATES TRUSTEE 201 Varick Street Suite 1006 New Attn: Paul Schwartzberg York, New York (212) TOGUT, SEGAL & SEGAL LLP Albert Togut Frank A. Oswald One Penn Plaza Suite 3335 New York, New York (212) Counsel to the Debtors SHEPPARD MULLIN RICHTER & HAMPTON LLP Craig A. Wolfe 30 Rockefeller Plaza, 39th Floor New York, New York (212) Counsel to the Creditors Committee UNLESS AN OBJECTION TO CONFIRMATION IS TIMELY SERVED AND FILED, IT MAY NOT BE CONSIDERED BY THE BANKRUPTCY COURT. C. Requirements for Confirmation of the Plan 1. Requirements of Section 1129(a) of the Bankruptcy Code (a) General Requirements At the Confirmation Hearing, the Bankruptcy Court will determine whether the following confirmation requirements specified in section 1129 of the Bankruptcy Code have been satisfied: (i) The Plan complies with the applicable provisions of the Bankruptcy Code. (ii) Code. The Debtors have complied with the applicable provisions of the Bankruptcy 60

78 Pg 78 of 88 (iii) law. The Plan has been proposed in good faith and not by any means proscribed by (iv) Payment made or promised by the Debtors or by a person issuing securities or acquiring property under the Plan for services or for costs and expenses in, or in connection with, the Chapter 11 Cases, or in connection with the Plan and incident to the Chapter 11 Cases, has been approved or is subject to the approval of the Bankruptcy Court as reasonable. (v) Debtors have disclosed the identity and affiliations of any individual proposed to serve, after confirmation of the Plan, as a director, officer, or voting trustee of the Debtors, an affiliate of the Debtors participating in a joint plan with the Debtors, or a successor to the Debtors under the Plan, and the appointment to, or continuance in, such office of such individual is consistent with the interests of creditors and equity holders and with public policy. (vi) With respect to each Class of Claims or Interests, each holder of an Impaired Claim or Impaired Interest either has accepted the Plan or will receive or retain under the Plan on account of such holder s Claim or Interest, property of a value, as of the Effective Date, that is not less than the amount such holder would receive or retain if the Debtors were liquidated on the Effective Date under chapter 7 of the Bankruptcy Code. See discussion of Best Interests Test below. (vii) Except to the extent the Plan meets the requirements of section 1129(b) of the Bankruptcy Code (discussed below), each class of Claims or Interests has either accepted the Plan or is not impaired under the Plan. (viii) Except to the extent that the holder of a particular claim has agreed to a different treatment of such claim, the Plan provides that administrative expenses and priority claims will be paid in full on the Effective Date. (ix) At least one class of impaired claims has accepted the Plan, determined without including any acceptance of the Plan by any insider holding a claim in such class. (x) Confirmation of the Plan is not likely to be followed by the need for further financial reorganization of the Debtors or any successor to the Debtors under the Plan, unless such liquidation or reorganization is proposed in the Plan. See Feasibility Analysis below. (xi) All fees payable under section 1930 of title 28, as determined by the Bankruptcy Court at the hearing on confirmation of the Plan, have been paid or the Plan provides for the payment of all such fees on the Effective Date of the Plan. (b) Best Interests Test As noted above, the Bankruptcy Code requires that each holder of an impaired Claim or Interest either (i) accepts the Plan or (ii) receives or retains under the Plan property of a value, as of the Effective Date, that is not less than the value such holder would receive or retain if the Debtors were liquidated under chapter 7 of the Bankruptcy Code on the Effective Date. This requirement is referred to as the best interests test. The best interests test requires the Bankruptcy Court to determine what the holders of allowed claims and allowed equity interests in each impaired class would receive from a liquidation of the debtor s assets and properties in the context of a liquidation under chapter 7 of the Bankruptcy Code. To determine if a plan is in the best interests of each impaired class, the value of the distributions from the proceeds of the liquidation of the debtor s assets and properties (after subtracting the amounts 61

79 Pg 79 of 88 attributable to the aforesaid claims) is then compared with the value offered to such classes of claims and equity interests under the plan. The Debtors believe that under the Plan all holders of impaired Claims and Interests will receive property with a value not less than the value such holder would receive in a liquidation under chapter 7 of the Bankruptcy Code. The Debtors belief is based primarily on (i) consideration of the effects that a chapter 7 liquidation would have on the ultimate proceeds available for distribution to holders of impaired Claims and Interests and (ii) the Liquidation Analysis annexed as Appendix C hereto. The Liquidation Analysis estimates the recoveries that may result from a hypothetical chapter 7 liquidation. It is based upon a number of significant assumptions, which are described therein. The Liquidation Analysis is solely for the purpose of disclosing to holders of Claims and Interests the effects of a hypothetical chapter 7 liquidation of the Debtors subject to the assumptions set forth therein. There can be no assurance as to values that would actually be realized in a chapter 7 liquidation nor can there be any assurance that the Bankruptcy Court will accept the Debtors conclusions or concur with such assumptions in making its determinations under section 1129(a)(7) of the Bankruptcy Code. (c) Feasibility Analysis The Bankruptcy Code requires that a debtor demonstrate that confirmation of a plan is not likely to be followed by liquidation or the need for further financial reorganization unless contemplated by the Plan. The Plan provides the Reorganized Debtors with a capital structure supported by cash flows from operations, proposed transactions, and a substantial working capital infusion from a Purchaser, as defined in the Plan, that will allows the Debtors to emerge for bankruptcy as reorganized enterprise upon the Effective Date of the Plan and satisfy Allowed Claims as provided for in the Plan. Accordingly, the Debtors believe that all Plan obligations will be satisfied without the need for further reorganization of the Debtors. 2. Requirements of Section 1129(b) of the Bankruptcy Code The Bankruptcy Court may confirm the Plan over the rejection or deemed rejection of the Plan by a class of Claims or Interests if the Plan does not discriminate unfairly and is fair and equitable with respect to such class. (a) No Unfair Discrimination The no unfair discrimination test applies to classes of claims or equity interests that are of equal priority and are receiving different treatment under a plan. A chapter 11 plan of reorganization does not discriminate unfairly, within the meaning of the Bankruptcy Code, if the legal rights of a dissenting class are treated in a manner consistent with the treatment of other classes whose legal rights are substantially similar to those of the dissenting class and if no class of claims or equity interests receives more than it legally is entitled to receive for its claims or equity interests. This test does not require that the treatment be the same or equivalent, but that such treatment is fair. The Debtors believe that, under the Plan, all impaired classes of Claims and Interests are treated in a manner that is fair and consistent with the treatment of other classes of Claims and Interests having the same priority. Accordingly, the Debtors believe the Plan does not discriminate unfairly as to any impaired class of Claims or Interests. (b) Fair and Equitable Test The fair and equitable test applies to classes of different priority and status (e.g., secured versus unsecured) and includes the general requirement that no class of claims receive more than 100% of the allowed amount of the claims in such class. The test sets forth different standards for what is fair and equitable, depending on the type of claims or interests in such class. In order to demonstrate that a plan is fair and equitable, the plan proponent must demonstrate the following: (i) Secured Creditors. With respect to a class of impaired secured claims, a proposed plan must provide the following: (a) that the holders of secured claims retain their liens 62

80 Pg 80 of 88 securing such claims, whether the property subject to such liens is retained by the debtor or transferred to another entity, to the extent of the allowed amount of such claims, and receive on account of such claim deferred cash payments totaling at least the allowed amount of such claim, of a value, as of the effective date of the Plan, of at least the value of such holder s interest in the estates interest in such property, or (b) for the sale, subject to section 363 of the Bankruptcy Code, of any property that is subject to the liens securing such claims, free and clear of such liens, with such liens to attach to the proceeds of such sale, and the treatment of such liens on proceeds under clause (a) or (c) of this paragraph, or (c) that the holders of secured claims receive the indubitable equivalent of their allowed secured claim. Here holders of secured claims will receive the indubitable equivalent of their allowed secured claim. (ii) Unsecured Creditors. With respect to a class of impaired unsecured claims, a proposed plan must provide the following: either (i) each holder of an impaired unsecured claim receives or retains under the plan property of a value equal to the amount of its allowed claim or (ii) the holders of claims and interests that are junior to the claims of the dissenting class will not receive any property under the plan. Inasmuch as the Plan provides that no holder of Claims or Interests in any Class junior in priority to the holders of Claims in a senior Class will receive or retain any property under the Plan, the Plan satisfies the fair and equitable test with respect to all Unsecured Claims. (iii) Holders of Equity Interests. With respect to a class of equity interests, a proposed plan must provide the following: (i) that each holder of an equity interest receive or retain on account of such interest property of a value, as of the effective date of the plan, equal to the greatest of the allowed amount of any fixed liquidation preference to such holder is entitled, any fixed redemption price to which such holder is entitled, or the value of such interest or (ii) that the holder of any interest that is junior to the interests of the class of equity interests will not receive or retain under the Plan on account of such junior interest any property. Accordingly, the proposed treatment of Interest under the Plan meets the fair and equitable test with respect to all Interests. (c) Application to the Plan As to any Class that may reject the Plan, the Debtors believe the Plan will satisfy both the no unfair discrimination requirement and the fair and equitable requirements, because, as to any such dissenting Class, there is no Class of equal priority receiving more favorable treatment, and such Class will either be paid in full, or no Class that is junior to such a dissenting Class will receive or retain any property on account of the Claims or Interests in such Class. 3. Alternative to Confirmation and Consummation of the Plan The Debtors have evaluated several alternatives to the Plan. After studying these alternatives, the Debtors have concluded that the Plan is the best option for the Debtors and their estates and will maximize recoveries to parties-in-interest assuming confirmation and consummation of the Plan. If the Plan is not confirmed and consummated, the alternatives to the Plan include a sale of the Debtors assets under section 363 of the Bankruptcy Code or a liquidation of the Debtors under chapter 7 of the Bankruptcy Code. (a) Section 363 Sale If the Plan is not confirmed, the Debtors could seek from the Bankruptcy Court, after notice and a hearing, authorization to sell their assets under section 363 of the Bankruptcy Code. Holders of Claims in Classes 2 through 14 would be entitled to credit bid, subject to the applicable final cash collateral orders, on any property to which their security interests are attached, and to offset their Claims against the purchase price of the property. In addition, the security interests in the Debtors assets held by holders of Claims in Classes 2 through 14 attach to the proceeds of any sale of the Debtors assets. After these Claims are satisfied, any remaining funds could be used to pay holders of Priority Tax Claim and general unsecured claims. The Debtors would need to file a plan of liquidation or convert the Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code in order to distribute any proceeds from a sale. Upon analysis and consideration of this alternative, the Debtors do not believe a sale of their 63

81 Pg 81 of 88 assets under section 363 of the Bankruptcy Code would yield a higher recovery than treatment under the Plan for holders of Claims and Interests. (b) Liquidation Under Chapter 7 In a chapter 7 case, a trustee is appointed to liquidate a debtor s assets and make distributions to creditors in accordance with the priorities established in the Bankruptcy Code. Generally, secured creditors are paid first from the proceeds of sales of their collateral. If any assets remain in the bankruptcy estate after satisfaction of secured creditors claims from their collateral, administrative expenses are next to be paid. Unsecured creditors are paid from any remaining sale proceeds, according to their respective priorities. Unsecured creditors with the same priority share in proportion to the amount of their allowed claims in relationship to the total amount of allowed claims held by all unsecured creditors with the same priority. Finally, interest holders receive the balance that remains, if any, after all creditors are paid. The Debtors believe that the Plan provides a greater recovery to holders of Allowed Other General Unsecured Claims than would a chapter 7 liquidation. Liquidation under chapter 7 of the Bankruptcy Code would decrease the aggregate proceeds available to holders of Claims and Interests and increase the magnitude of claims to those proceeds. Liquidating the Debtors estates under the Plan likely provides Holders of Allowed General Unsecured Claims with a larger, more timely recovery because of the fees and expenses that would be incurred in a chapter 7 liquidation, including the potential added time and expense incurred by the chapter 7 trustee and any retained professionals in familiarizing themselves with the Debtors and their estates. These additional administrative expenses involved in the appointment of a chapter 7 trustee and its retained professionals would cause a substantial diminution in the value of the Debtors assets. The assets available for distribution to creditors would also be reduced by such additional the claims, some of which would be entitled to priority, which would arise by reason of the liquidation and from the rejection of leases and other executory contracts (including the DSV Vessel Contract and ROV Vessel Contracts) which will likely result in an unsecured claim for damages in connection with the cessation of operations. Based on the Debtors analysis, a liquidation of the Debtors assets under a chapter 7 liquidation would result in smaller distributions being made to creditors than those provided for under the Plan because of (i) the likelihood that the assets of the Debtors would have to be sold or otherwise disposed of in a less orderly fashion over a short period of time, and (ii) additional expenses and claims, some of which would be entitled to priority, which would be generated during the liquidation. Accordingly, the Debtors believe that the Plan is in the best interests of creditors. (c) Alternative Plans The Debtors do not believe that there are any alternative plans for the reorganization or liquidation of the Debtors Estates. The Debtors believe that the Plan, as described herein, enables Holders of Claims and Interests to realize the greatest possible value under the circumstances and that, compared to any alternative plan, the Plan has the greatest chance to be confirmed and consummated. 4. Nonconsensual Confirmation If any impaired Class of Claims entitled to vote will not accept the Plan by the requisite statutory majority provided in section 1126(c) of the Bankruptcy Code, the Debtors reserve the right to amend the Plan or undertake to have the Bankruptcy Court confirm the Plan under section 1129(b) of the Bankruptcy Code or both. With respect to impaired Classes of Claims that are deemed to reject the Plan, the Debtors will request that the Bankruptcy Court confirm the Plan pursuant to section 1129(b) of the Bankruptcy Code. CONCLUSION AND RECOMMENDATION The Debtors believe that confirmation and implementation of the Plan is preferable to any other alternative under the circumstances. Other alternatives would involve significant delay, 64

82 Pg 82 of 88 uncertainty, substantial additional administrative costs, and lower recovery to the holders of impaired claims and interests. Consequently, the Debtors urge all holders of impaired claims and interests entitled to vote under the Bankruptcy Code to vote to accept the Plan and to evidence their acceptance by duly completing and returning their ballots so that they will be received on or before _:00 P.M. (prevailing Eastern time) on by the Voting Agent. Dated: August 15, 2017 New York, New York TOISA LIMITED (for itself and on behalf of each of the other Debtors) By: /s/ Robert Hennebry Name: Robert Hennebry Title: Chief Financial Officer ALBERT TOGUT FRANK A. OSWALD BRIAN F. MOORE KYLE J. ORTIZ TOGUT, SEGAL & SEGAL LLP One Penn Plaza, Suite 3335 New York, New York (212) Counsel for TOISA LIMITED, et al. 65

83 Pg 83 of 88 APPENDIX A JOINT PLAN OF REORGANIZATION OF TOISA LIMITED AND CERTAIN OF ITS AFFILIATES UNDER CHAPTER 11 OF THE BANKRUPTCY CODE SEE ECF NO. 281

84 Pg 84 of 88 APPENDIX B LIST OF DEBTORS AND CORPORATE ORGANIZATION CHART

85 Filed 08/15/17 Entered 08/15/17 19:01:47 Pg 85 of 88 Main Document * Denotes Non-Debtor Affiliates. * * Doc 282 * * scc