We are requesting on behalf of our client, Hughes Offshore & Shipping Services, a waiver from the Coasting Laws of Canada

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1 August 31, 2016 Time:1600 Pages:9 To: Canadian Transportation Agency Cc: Canada Border Services Agency Fr: Cory Tanner Birmingham Street Halifax, NS Canada B3J 2J6 Tel: (902) Fax: (902) Suite Duckworth Street St. John's, NL Canada A1C 1G8 Tel: (709) Fax: (709) Ref: BBC Emerald We are requesting on behalf of our client, Hughes Offshore & Shipping Services, a waiver from the Coasting Laws of Canada Included with our application, please find full specification details of the BBC Emerald which will replace the BBC Pearl which has become unavailable. We trust that we have provided sufficient information however, should you require any further information please feel free to contact us at any time. Regards, Mathers Logistics Ltd

2 APPLICATION FOR VESSEL TEMPORARY ADMISSION TO THE COASTING TRADE OF CANADA 1. Details of the Vessel: Name/Registry BBC Emerald/Antigua & Barbuda Category and Type Multipurpose Heavylifter Characteristics LOA: M Breadth Mld: M Min Draft: 6 M Deadweight: MT Gross tonnage: MT Net tonnage: 5968 MT Max Speed: 17.5 Knots 2. Special Characteristics of Vessel 2 X NMF cranes situated portside, 400 MT each capable of lifting 800 MT combined Cargo hold capacity: 19,680 cbm Floor space under deck: 2,986 cbm Floor space on deck: 1,891 cbm Internal hold width of not less than 18.98m. Capability to load and stow two 16m diameter turbines of 320 tonnes each in the lower hold. Ability to lift, load, and maneuver on to the main deck the 444 tonne subsea base and secure for sea transit. Vessel is equipped with a deployable stability pontoon required to maintain vertical stability of the ship during such lifts.

3 3. Scope of Work and Geographical Location OpenHydro Canada has designed and built two underwater turbines and associated subsea bases in a Canadian shipyard for deployment in the Bay of Fundy. Also in a Canadian shipyard OpenHydro has also designed and built a special barge to carry, deploy, and retrieve these turbines.. Regrettably, the project has encountered a late-arising technical challenge requiring immediate replacement of components inside the turbine. An extensive review of alternatives has identified requiring a heavy lift crane vessel, fully certified and with officers and deck crew properly experienced in a particular types of lifting operations. This lifting operation is a critical task to allow completion of this project as quickly as possible.. Hughes Offshore and Shipping Services Inc. have searched the Canadian vessel registry for suitable Canadian flag vessels equipped with; at least two deck cranes allowing a lift with a SWL of no less than 320 tonnes at 19.1m off the ships side, and the ability (twinned) to lift 444 tonnes at a reach off the side of the ship of 17 metres, and the ability to land on the quay a lift of 320 tonnes from a position 19.1m off the ship side, and the ability to load without assistance and then transport as cargo two lifts (one subsea base of 444 tonnes and one turbine of 320 tonnes) from Pictou NS to Saint John NB by no later than October 10th, the 320 tonne lifts are 16m by 16m, and the 444 tonne lifts are steel frames approx. 32.5m by 30.6m by 16m height. The vessel must be capable of loading the frame from the water and landing it on the deck in a position suitable for making a sea voyage. the vessel must be capable of discharging the frame from the vessel and landing it on the seafloor in a position suitable for temporary storage and retrieval. Be able to perform lifts at a 6 meter draft No such vessels have been identified. Therefore, Hughes Offshore and Shipping Services have determined that the repair work and ultimately success of the project requires use of a specialized vessel, not available in the Canadian registry, as the ONLY non-canadian marine asset in the project. Additional research has been conducted on the possibility of using shore side cranes; However, the Port of Saint John does not have sufficient structural capacity to support such an operation. Confirmation of this is in the attached letter.

4 Beginning the repair work as quickly as possible is critical in order to: complete the work before poor weather becomes an operational and safety factor avoid incurring significant additional cost related to berth fees, labour, equipment rentals and more; and to be in a position to deliver the turbines to our client and partner. Failure to secure this vessel will put additional pressure on our processes. The entire scope of work is anticipated to be aproximately 20 days duration. It will work will take place in Pictou, NS, with a voyage to Saint John NB, and heavy lift operations in both ports. The total cargo to be lifted is: 2 X 320 MT Turbine 1 X 444 MT Sub Sea Base 4. Additional Information a) Changes to the dates proposed The dates cannot change due to contractual obligations of our client Hughes Offshore & Shipping Services. b) Names of Operators of Canada-registered ships who have been contacted Our client is not aware of any vessels registered in Canada that are capable of performing the heavy lift of a steel subsea base frame of 444 MT at a reach of 17m. Therefore, no Canadian vessel owners have been contacted before the filing of this application. c) Economic Impact This technical challenge, and the need to mitigate further expense requires that this work is completed as quickly and efficiently as possible. A letter from OpenHydro which is attached, further details the substantial economic considerations. Customs Office of Importing: Halifax, NS Customs Office of Accounting: Halifax, NS

5 Timeframe: Estimated Start Date: September 21, 2016 Estimated Completion: October 21, 2016 Permission Required by: September 8, 2016 Applicant; Mathers Logistics Ltd Birmingham Street Halifax, NS Ph# Fax# Att: Cory Tanner Name of Client: Hughes Offshore & Shipping Services

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9 30 th August 2016 Subject: Immediate Requirement for non-canadian flagged Heavy Lift Ship To whom it may concern, OpenHydro plans to deploy one of the world's first grid connected tidal turbine arrays in the Bay of Fundy, and has manufactured two in-stream tidal turbines in preparation for the project. Recently, a requirement to replace a defective component in the turbines was identified. To replace the component in a timely and efficient manner, a heavy lift ship is required to conduct the work. We have completed an exhaustive search of available Canadian vessels but have not identified a suitable craft to provide the necessary combination of lift capacity, draft, cargo capacity and availability. To that end, we are exploring an opportunity to charter the specialised heavy lift cargo vessel from the European company, BBC Chartering (as described in the CTA application from Hughes Offshore and Shipping Services Inc.) The charter will be via Hughes Offshore and Shipping Services and we cordially request that the application to use this vessel be granted as soon as reasonably practical. The defective component inside the turbine has potential to have a significant financial effect and this vessel is immediately required to minimize additional expense. The vessel will first transport turbine 2 and its subsea base from Pictou, NS to Saint John, NB, where it will then facilitate the repair of turbine 1, before finalizing assembly of both turbines. One of OpenHydro s core mandates is to create and grow a successful tidal industry in Nova Scotia, Canada. In the last three years, OpenHydro has utilized more than 200,000 labour hours in Canada/Nova Scotia and hopes to continue developing a long term industry in Nova Scotia, with associated economic and labour benefits. More than 70 per cent of project contracts have benefited Canada and more specifically, Nova Scotia companies; however our Canadian team, including Hughes Offshore and Shipping Services have been unsuccessful in identifying a suitable resource to conduct the lift. We request the prompt approval of our sub-contractor s application for a Coasting License such that we can recover from this defect with a view to moving forward with replacing the components as quickly as possible. Yours Faithfully, Jacques Chatelet Chief Operating Officer OpenHydro Page 1 of 1