Exhibit 10.1

 

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(i)

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(ii)

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(iii)

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(iv)

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CREDIT AGREEMENT, dated as of August 14, 2018, among GENCO SHIPPING & TRADING LIMITED, a company incorporated under the laws of the Republic of the Marshall Islands (the “Borrower”), the Lenders party hereto from time to time, CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK (“CACIB”), as Structurer and Bookrunner, CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK and SKANDINAVISKA ENSKILDA BANKEN AB (PUBL), as Mandated Lead Arrangers (in such capacity, the “Mandated Lead Arrangers”) and CACIB, as Administrative Agent (in such capacity, the “Administrative Agent”) and as Security Agent under the Security Documents (in such capacity, the “Security Agent”).  All capitalized terms used herein and defined in Section 1.01 are used herein as therein defined.

 

W I T N E S S E T H:

 

WHEREAS, subject to and upon the terms and conditions herein set forth, the Lenders are willing to make available to the Borrower the Credit Facility provided for herein.

 

NOW, THEREFORE, IT IS AGREED:

 

SECTION 1            Definitions and Accounting Terms.

 

 

“Acceptable Classification Society” shall mean American Bureau of Shipping, Nippon Kaiji Kyokai, Lloyd’s Register of Shipping, Bureau Veritas and DNV GL, or such other first class vessel classification society that is a member of the International Association of Classification Societies that the Required Lenders may approve from time to time.

 

“Acceptable Flag Jurisdiction” shall mean the Republic of the Marshall Islands, Liberia, Hong Kong, Panama, the Bahamas, Singapore or such other flag jurisdiction as may be acceptable to all Lenders.

 

“Account Bank” shall mean CACIB.

 

“Account Collateral” shall mean all “Account Collateral” as defined in the Account Security Agreements.

 

“Additional Collateral” shall mean additional Collateral satisfactory to the Required Lenders granted in favor of the Security Agent to cure non-compliance with Section 8.07(d) (it being understood that cash collateral comprised of Dollars (which shall be valued at par) and any dry bulk vessel that is not more than ten (10) years of age and otherwise meets the requirements of a Replacement Vessel (other than clause (iii) thereof) shall, in each case, be deemed satisfactory to the Required Lenders), pursuant to security documentation in form and substance reasonably satisfactory to the Security Agent; provided such Additional Collateral is in an aggregate amount at least sufficient to cure such non-compliance.

 

“Account Security Agreement” shall mean the account security agreements in connection with the Earnings Accounts of the Subsidiary Guarantors substantially in the form of Exhibit N to be executed by the applicable Subsidiary Guarantor and the Security Agent.

 

“Additional Collateral Release Conditions” shall mean, with respect to the release of any Additional Collateral, the following:

 

(a)           before and after giving effect to such release, (i) no Default or Event of Default shall have occurred and be continuing and (ii) the Borrower shall be, and shall have been at all times during the most recently ended full fiscal quarter, in compliance with Section 8.07(d);

 

(b)          the Borrower shall have delivered to the Administrative Agent, in each case in form and substance satisfactory to the Administrative Agent and the Security Agent, (i) an officer’s certificate certifying as to matters in clause (a) above, (ii) Appraisals for each Collateral Vessel dated no more than thirty (30) days prior to the delivery thereof in form and substance reasonably acceptable to the Administrative Agent and from two Approved Appraisers stating the then current Appraised Value of each Collateral Vessel and otherwise meeting the requirements set forth in Section 7.01(d) and (iii) any other documents reasonably requested by the Administrative Agent; and

 

(c)           the Borrower shall have paid all costs and expenses of the Administrative Agent and the Security Agent relating to the preparation, execution and delivery of the relevant release documents.

 

“Additional Vessel” shall have the meaning provided in the definition of “Collateral Vessel”.

 

“Administrative Agent” shall have the meaning provided in the first paragraph of this Agreement, and shall include any successor thereto.

 

“Affiliate” shall mean, with respect to any Person, any other Person (including, for purposes of Section 8.06 only, all directors, officers and partners of such Person) directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person; provided, however, that for purposes of Section 8.06, an Affiliate of the Borrower shall include any Person that directly or indirectly owns more than 5% of any class of the capital stock of the Borrower and any officer or director of the Borrower or any of its Subsidiaries.  A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise.  Notwithstanding anything to the contrary contained above, for purposes of Section 8.06, none of the Administrative Agent, nor the Security Agent, nor any Mandated Lead Arranger, nor any Lender (or any of their respective affiliates) shall be deemed to constitute an Affiliate of the Borrower or its Subsidiaries in connection with the Credit Documents or its dealings or arrangements relating thereto.

 

“Agents” shall mean, collectively, the Administrative Agent and the Security Agent.

 

“Aggregate Appraised Value” shall mean at any time, the sum of the Appraised Value of all Collateral Vessels owned by the Subsidiary Guarantors at such time which are not then subject to an Event of Loss.

 

“Agreement” shall mean this Credit Agreement, as modified, supplemented, amended or restated from time to time.

 

“Amortization Amount” shall mean, for any Payment Date, the amount equal to the amount set forth on Schedule X hereto as of the Closing Date, as such amount (and such Schedule X) may be amended (i) by the Administrative Agent on or prior to the first Payment Date to reflect a repayment profile (taking into account the age of the Collateral Vessels as of September 1, 2018), whereby the Credit

 

Facility is repaid to nil when the average age of the Collateral Vessels reaches 20 years of age or (ii) pursuant to Section 4.02(b)(v).

 

“Anti-Corruption Laws” shall have the meaning provided in Section 6.10(d).

 

“Applicable Margin” shall mean (i) from the Closing Date until (and including) September 30, 2019, 2.50% per annum and (ii) thereafter, following the delivery of a Quarterly Pricing Certificate, the percentage per annum set forth across from the Total Net Leverage Ratio in the table below indicated to have been achieved in any such certificate:

 

          

The Applicable Margin determined in accordance with clause (ii) of the first paragraph of this definition shall be in effect from and after each date of delivery (each such date, a “Start Date”) of any certificate (each such certificate, a “Quarterly Pricing Certificate”) by an Authorized Officer of the Borrower to the Administrative Agent, within 45 days of the last day of the first three fiscal quarters of the Borrower and within 90 days of the last day of the fourth fiscal quarter of the Borrower, which certificate shall set forth the calculation of the Total Net Leverage Ratio as at the last day of the fiscal quarter ended immediately prior to the relevant Start Date and the Applicable Margin, which shall be thereafter applicable until the earlier of (x) the date on which the next Quarterly Pricing Certificate is delivered to the Administrative Agent or (y) the date which is 45 days following the last day of the fiscal quarter in which the previous Start Date occurred (such earlier date, the “End Date”). If no certificate has been delivered to the Administrative Agent as of the End Date indicating an entitlement to a new (or the same) Applicable Margin (and thus commencing a new Start Date), the Applicable Margin shall be the one set forth in Pricing Level 1 of the table above (such level, the “Highest Applicable Margin”).  Notwithstanding anything to the contrary contained above in this definition, the Applicable Margin shall be the Highest Applicable Margin at all times during an Event of Default.

 

“Appraisal” shall mean, with respect to a Collateral Vessel, a written appraisal by an Approved Appraiser in favor of the Administrative Agent of the Appraised Value of such Collateral Vessel.

 

“Appraised Value” shall mean for any Collateral Vessel at any time, the arithmetic mean of the fair market values of such Collateral Vessel as set forth on the Appraisals of at least two Approved Appraisers most recently delivered to, or obtained by, the Administrative Agent prior to such time pursuant to Section 5.02(e) or Section 7.01(d) and prepared:

 

(a)           as at a date not more than 30 days prior to such delivery;

 

(b)           by two Approved Appraisers selected by the Borrower;

 

(c)           without physical inspection of the Collateral Vessel, except as required by the Administrative Agent if an Event of Default has occurred and is continuing; and

 

(d)           on the basis of a sale for prompt delivery for cash on normal arm’s length commercial terms as between a willing seller and a willing buyer, free of any charter or other

 

contract of employment and with no value to be given to any pooling arrangements; provided that if a range of values is provided in a particular Appraisal, then the Appraised Value in such Appraisal shall be deemed to be the median of such values.

 

“Approved Appraiser” shall mean Barry Rogliano Salles, E.A. Gibson Shipbrokers, Clarkson Valuations Limited, Arrow Sale & Purchase (UK) Limited, Simpson Spence & Young Shipbrokers, Braemar ACM, Fearnleys or Maersk Broker, any Affiliate of the foregoing which actually provides Appraisals for a Vessel or any other appraiser approved by the Required Lenders, for the purposes of providing an Appraisal for a Collateral Vessel.

 

“Assignment and Assumption Agreement” shall mean an assignment and assumption agreement substantially in the form of Exhibit K (appropriately completed).

 

“Assignment of Charter” shall mean an assignment of charter substantially in the form of Exhibit H.

 

“Assignment of Earnings” shall mean an assignment of earnings substantially in the form of Exhibit G.

 

“Assignment of Hedging Agreements” shall mean an assignment of hedging agreements substantially in the form of Exhibit M.

 

“Assignment of Insurances” shall mean an assignment of insurances substantially in the form of Exhibit F.

 

“Authorized Officer” shall mean the chairman of the board, the president, any vice president, the treasurer, the secretary, any assistant secretary, any other financial officer, an authorized manager and any other officer (or a Person or Persons so designated by any officer) of any Obligor.

 

“Bail-In Action” shall mean the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

 

“Bail-In Legislation” shall mean, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

 

“Bankruptcy Code” shall have the meaning provided in Section 9.05.

 

“Bankruptcy Proceeding” shall have the meaning provided in Section 10.10(e).

 

“Beneficial Ownership Certification” shall mean a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.

 

“Beneficial Ownership Regulation” shall mean 31 C.F.R. § 1010.230.

 

“Benefit Plan” shall mean any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

 

“Borrower” shall have the meaning provided in the first paragraph of this Agreement.

 

“Borrowing” shall mean a borrowing of Loans from all the Lenders (other than any Defaulting Lender) having Commitments on a given date having the same Interest Period.

 

“Borrowing Date” shall mean each date on which Loans are incurred by the Borrower, which date shall be (x) the date of the consummation of the delivery of a Collateral Vessel to a Subsidiary of the Borrower or, if earlier, the date  provided in Section 5.02 in connection with a prepositioning of one or more Loans as provided therein or (y) if later, the date on which the Borrower incurs such Loans to reimburse, in part, the acquisition price of such Collateral Vessel, in each case, pursuant to Section 2.01(a).

 

“Business Day” shall mean any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions are authorized or required by law or other government action to close in New York City, Paris, London and Stockholm.

 

“CACIB” shall have the meaning provided in the first paragraph of this Agreement.

 

“Cash Equivalents” shall mean (i) securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than one year from the date of acquisition, (ii) time deposits and certificates of deposit of any commercial bank having, or which is the principal banking subsidiary of a bank holding company having capital, surplus and undivided profits aggregating in excess of $200,000,000, with maturities of not more than one year from the date of acquisition by such Person, (iii) repurchase obligations with a term of not more than 90 days for underlying securities of the types described in clause (i) above entered into with any bank meeting the qualifications specified in clause (ii) above, (iv) commercial paper issued by any Person incorporated in the United States rated at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody’s and in each case maturing not more than one year after the date of acquisition by such Person, and (v) Investments in money market funds substantially all of whose assets are comprised of securities of the types described in clauses (i) through (iv) above.

 

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended from time to time, 42 U.S.C. § 9601 et seq.

 

“Change in Law” shall mean the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, if not already enacted as of the Closing Date, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

 

“Change of Control” shall mean any of the following:

 

(a)           if the Borrower ceases to own directly or indirectly, 100% of the Equity Interests in any Subsidiary Guarantor other than as a consequence of the Collateral Disposition of the Collateral Vessel owned by such Subsidiary Guarantor and the prepayment of the Loans pursuant to, and to the extent required by, Section 4.02(b); or

 

(b)           any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act), other than any Permitted Holder or any group of Permitted Holders, shall at any time become the ultimate owner, directly or indirectly, beneficially or of record or the

 

“beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 of the Exchange Act), of Equity Interests representing more than 35% of the outstanding voting or economic Equity Interests of the Borrower or control the appointment of members of the board of directors of the Borrower, unless the new shareholder(s) is/are acceptable to the Lenders; or

 

(c)           the replacement of a majority of the directors on the board of directors of the Borrower over a two-year period from the directors who constituted the board of directors of the Borrower at the beginning of such period, and such replacement shall not have been approved by a vote of at least a majority of the board of directors of the Borrower then still in office who either were members of such board of directors at the beginning of such period or whose election as a member of such board of directors was previously so approved; or

 

(d)           a “change of control” or similar event shall occur as provided in any outstanding Financial Indebtedness of the Borrower (or the documentation governing the same).

 

“Claims” shall have the meaning provided in the definition of “Environmental Claims”.

 

“Closing Date” shall have the meaning provided in Section 11.11.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder.  Section references to the Code are to the Code as in effect at the date of this Agreement and any subsequent provisions of the Code, amendatory thereof, supplemental thereto or substituted therefor.

 

“Collateral” shall mean all property (whether real or personal) with respect to which any security interests have been granted (or purported to be granted) pursuant to any Security Document, including, without limitation, all Pledge Agreement Collateral, all Earnings Collateral, all Insurance Collateral, all Collateral Vessels, all Account Collateral, all Hedging Collateral and all cash and Cash Equivalents at any time delivered as collateral thereunder or as required hereunder.

 

“Collateral and Guaranty Requirements” shall mean, with respect to each Obligor and each Collateral Vessel, the requirements that:

 

(i)            each Subsidiary of the Borrower that is required to be a Subsidiary Guarantor in accordance with the definition thereof shall have duly authorized, executed and delivered to the Administrative Agent the Guaranty, substantially in the form of Exhibit C (as modified, supplemented or amended from time to time, together with any Joinder Agreement, the “Guaranty”), or a joinder thereto in form and substance reasonably satisfactory to the Administrative Agent (each as modified, supplemented or amended from time to time, a “Joinder Agreement”) and the Guaranty shall be in full force and effect;

 

(ii)          the Borrower and each Subsidiary Guarantor shall have duly authorized, executed and delivered the Pledge Agreement substantially in the form of Exhibit E (as modified, supplemented or amended from time to time, together with any Joinder Agreement, the “Pledge Agreement”) or Joinder Agreement and shall have (x) delivered to the Security Agent, as pledgee, all the Pledge Agreement Collateral referred to therein with respect to the Equity Interests in each Subsidiary Guarantor and all Earnings Accounts and (y) duly authorized, executed and delivered any other related documentation necessary or advisable to perfect the Lien on the Pledge Agreement Collateral in the respective jurisdictions of formation of the respective Subsidiary Guarantor or the Borrower, as the case may be;

 

(iii)          each Subsidiary Guarantor, the Security Agent and the Account Bank, shall have duly authorized, executed and delivered one or more collateral agreements substantially in the

 

form of Exhibit N (each as modified, supplemented or amended from time to time, the “Account Security Agreement”), and pursuant to which the Earnings Accounts shall have been pledged to secure the Secured Obligations, and shall have complied with all of the requirements set forth in such Account Security Agreements.

 

(iv)          the Subsidiary Guarantor (and any other relevant Obligor) that owns such Collateral Vessel shall have duly authorized, executed and delivered (x) an Assignment of Insurances substantially in the form of Exhibit F (as modified, supplemented or amended from time to time, the “Assignment of Insurances”), (y) an Assignment of Earnings substantially in the form of Exhibit G (as modified, supplemented or amended from time to time, the “Assignment of Earnings”) together covering all of such Obligor’s present and future Earnings Collateral and Insurance Collateral, and (z) an Assignment of Charters (existing or future) substantially in the form of Exhibit H (as modified, supplemented or amended from time to time, the “Assignment of Charters”) for any charter or similar contract of employment with a term in excess of 24 months (or, with respect to any charter or similar contract of employment existing on the Borrowing Date for such Collateral Vessel, a remaining term in excess of 24 months) (any such charter, a “Pledged Charter”), and shall provide appropriate notices and consents related thereto, together granting a security interest and lien on all of such Obligor’s (i) present and future Earnings Collateral and Insurance Collateral and (ii) present and future right and receivables under Pledged Charters, in each case together with proper Financing Statements (Form UCC-1) in form for filing under the UCC or in other appropriate filing offices of each jurisdiction as may be necessary to perfect the security interests purported to be created by the Assignment of Insurances, the Assignment of Earnings and the Assignment of Charters;

 

(v)          each Obligor party to a Hedging Agreement shall have duly authorized, executed and delivered an Assignment of Hedging Agreements substantially in the form of Exhibit M (as modified, supplemented or amended from time to time, the “Assignment of Hedging Agreements”) and shall use commercially reasonable efforts to provide appropriate notice and consents related thereto, together grating a security interest and lien on all of the Borrower and such Subsidiary Guarantor’s present and future rights and receivables under each Hedging Agreement;

 

(vi)         each Subsidiary Guarantor that owns a Collateral Vessel shall have duly authorized, executed and delivered, and caused to be recorded in the appropriate vessel registry, a Collateral Vessel Mortgage with respect to such Collateral Vessel and such Collateral Vessel Mortgage shall be effective to create in favor of the Security Agent and/or the Lenders a legal, valid and enforceable first priority security interest in, and lien upon, such Collateral Vessel;

 

(vii)         all filings, deliveries of instruments and other actions necessary or desirable in the reasonable opinion of the Security Agent to perfect and preserve the security interests described in clauses (i) through and including (vi) above shall have been duly effected, including, without limitation, proper financing statements (Form UCC-1) or amendments thereto, as requested by the Administrative Agent or Security Agent, in form for filing under the UCC or in other appropriate filing offices of each jurisdiction as may be necessary to perfect the security interests purported to be created by the Security Documents, and the Security Agent shall have received evidence thereof in form and substance reasonably satisfactory to the Security Agent;

 

(viii)        the Administrative Agent shall have received each of the following:

 

(a)        an Appraisal from two Approved Appraisers of such Collateral Vessel of a recent date (and in no event dated later than 60 days prior to the

 

relevant Borrowing Date) in scope, form and substance reasonably satisfactory to the Administrative Agent;

 

(b)        certificates of ownership from appropriate authorities showing the registered ownership of such Collateral Vessel in the name of the relevant Subsidiary Guarantor in an Acceptable Flag Jurisdiction;

 

(c)        the results of maritime registry searches with respect to such Collateral Vessel, indicating no recorded liens other than Liens in favor of the Security Agent and/or the Lenders and Permitted Liens;

 

(d)       confirmation of class certificates from an Acceptable Classification Society indicating that such Collateral Vessel meets the criteria specified in Section 6.23;

 

(e)        an IHM (together with evidence of the relevant class notation) from an Acceptable Classification Society for each such Collateral Vessel; provided that the Borrower shall have satisfied the requirements of this subclause (viii)(e) as soon as commercially practicable after the Closing Date, and in any event, no later than the date of the first dry-docking of such Collateral Vessel following the Closing Date (it being acknowledged and agreed that no IHM shall be required to be delivered prior to the completion of the first dry-docking of such Collateral Vessel following the Closing Date);

 

(f)        certified copies of (x) all pooling agreements and agreements related to the technical management of each Collateral Vessel and a duly executed manager’s undertaking from each Technical Manager in accordance with Section 7.17 and (y) Commercial Management Agreements related to  each Collateral Vessel;

 

(g)        a duly executed manager’s undertaking in a form consistent with market practice in ship finance transactions delivered by each Technical Manager and Commercial Manager in favor of the Security Agent in a form and substance reasonably acceptable to the Security Agent;

 

(h)        certified copies of all ISM Code and ISPS Code documentation for each Collateral Vessel; and

 

(i)         a report, in form and scope reasonably satisfactory to the Administrative Agent, from a firm of independent marine insurance brokers reasonably acceptable to the Administrative Agent (it being understood that AON, BankServe and Marsh are acceptable) with respect to the insurance maintained by the Obligors in respect of such Collateral Vessel, together with a certificate from such broker certifying that such insurances (i) are placed with such insurance companies and/or underwriters and/or clubs, in such amounts, against such risks, and in such form, as are customarily insured against by similarly situated insureds for the protection of the Administrative Agent, the Security Agent and/or the Lenders as mortgagee, (ii) otherwise conform with the insurance requirements of each respective Collateral Vessel Mortgage (it being understood that, except as required by applicable law, the insurance requirements

 

of such Collateral Vessel Mortgage shall not exceed the Required Insurance) and (iii) include copies of the Required Insurance;

 

(ix)           the Administrative Agent shall have received from (a) special New York counsel to each of the Obligors (which shall be Kramer Levin Naftalis & Frankel LLP or other counsel to each of the Obligors qualified in such jurisdiction and reasonably satisfactory to the Administrative Agent), an opinion addressed to the Administrative Agent and each of the Lenders and dated as of the Borrowing Date for such Collateral Vessel, (b) if applicable, special Marshall Islands counsel to each of the Obligors (which shall be Reeder & Simpson P.C. or other counsel to each of the Obligors qualified in such jurisdiction and reasonably satisfactory to the Administrative Agent), an opinion addressed to the Administrative Agent and each of the Lenders and dated as of the Borrowing Date for such Collateral Vessel, (c) if applicable, special Liberian counsel to each of the Obligors (which shall be Poles, Tublin, Stratakis & Gonzalez LLP or other counsel to each of the Obligors qualified in such jurisdiction and reasonably satisfactory to the Administrative Agent), an opinion addressed to the Administrative Agent and each of the Lenders and dated as of the Closing Date, (d) special French counsel to the Administrative Agent and Security Agent (which shall be White & Case LLP or another law firm qualified to render an opinion as to French law reasonably acceptable to the Administrative Agent), an opinion addressed to the Administrative Agent, Security Agent and each of the Lenders with respect to each Account Security Agreement and dated as of the Closing Date and (e) if applicable, counsel to each of the Obligors in the jurisdiction of the flag of the Collateral Vessel, an opinion addressed to the Administrative Agent and each of the Lenders and dated as of the Borrowing Date for such Collateral Vessel covering such matters as shall be reasonably required by the Administrative Agent, in each case which shall (x) be in form and substance reasonably acceptable to the Administrative Agent and (y) cover customary matters, including the perfection of the security interests (other than those to be covered by opinions delivered pursuant to the other opinions above) granted pursuant to the Security Documents, and such other matters incidental to the transactions contemplated herein as the Administrative Agent may reasonably request;

 

(x)           (a) the Administrative Agent shall have received a certificate, dated the Closing Date and reasonably acceptable to the Administrative Agent, signed by the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Treasurer or an authorized manager, member or general partner of each Obligor which owns the Relevant Vessel, and attested to by the Secretary or any Assistant Secretary (or, to the extent such Obligor does not have a Secretary or Assistant Secretary, the analogous Person within such Obligor) of such Obligor, as the case may be,  with appropriate insertions, together with copies of the Organizational Documents of such Obligor and the resolutions of such Obligor referred to in such certificate authorizing the consummation of the Transaction and (b) the Administrative Agent shall have received copies of governmental approvals, good standing certificates and bring-down telegrams or facsimiles, if any, which the Administrative Agent may have reasonably requested in connection therewith, such documents and papers, where appropriate, to be certified by proper corporate or Governmental Authorities; and

 

(xi)          the Borrower shall have (x) duly authorized, executed and delivered to the Security Agent, as secured party on behalf of the Secured Creditors, a legal, valid and enforceable first priority security interest, in and Lien upon the Equity Interests in the Subsidiary Guarantors pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent and (y) effected all filings, deliveries of instruments and other actions necessary or advisable in the reasonable opinion of the Administrative Agent to perfect and preserve each security interest described in this clause (xi) in each relevant jurisdiction, as the case may be

 

(including, without limitation, the delivery of customary lien searches, proper financing statements (Form UCC-1) in form for filing under the UCC or in other appropriate filing offices of each jurisdiction, Certificated Securities (as such term is defined in Section 8-102(A)(4) of the UCC), executed and undated transfer powers, legal opinions, board resolutions and officer’s certificates), in each case which shall be in form and substance reasonably satisfactory to the Administrative Agent.

 

“Collateral Disposition” shall mean the sale, lease, transfer, bareboat charter or other disposition by the Borrower or any Subsidiary Guarantor to any Person other than the Borrower or a Subsidiary Guarantor of any Collateral Vessel; provided that (i) any bareboat charter or demise charter entered into with the consent of each Lender and (ii) any time charter shall not, in each case, be considered a Collateral Disposition for the purposes of Section 4.02 of this Agreement.

 

“Collateral Disposition Prepayment Amount” shall mean an amount equal to the product of the then aggregate principal amount of outstanding Loans multiplied by a fraction, the numerator of which is the Appraised Value (determined on the basis of the Appraisals most recently delivered pursuant to Section 5.02(e) or 7.01(d)) of the Collateral Vessel or Collateral Vessels (as applicable) (other than any Additional Vessels) subject to such Collateral Disposition and the denominator of which is the Aggregate Appraised Value (determined on the basis of the Appraisals most recently delivered pursuant to Section 5.02(e) or 7.01(d)) for all Collateral Vessels (other than any Additional Vessels) then securing the Credit Facility.

 

“Collateral Disposition Prepayment Date” shall have the meaning provided in Section 4.02(b).

 

“Collateral Maintenance Test” shall have the meaning provided in Section 8.07(d).

 

“Collateral Vessel” shall mean (a) each vessel listed on Schedule VI hereto, to the extent such vessel has been acquired pursuant to a Collateral Vessel Acquisition, (b) any Replacement Vessel and (c) such other vessel posted as Additional Collateral (such vessel, an “Additional Vessel”); provided that for the purposes of Section 4.02(b), an Additional Vessel shall not be deemed a Collateral Vessel; provided, further, that Schedule VI is automatically updated to include any Additional Vessel and any Replacement Vessel without any further action on the part of the Administrative Agent.

 

“Collateral Vessel Acquisition” shall mean the acquisition by a Subsidiary Guarantor of a Collateral Vessel.

 

“Collateral Vessel Mortgage” shall mean, with respect to each Collateral Vessel, a first preferred mortgage in substantially the form of Exhibit D-1 or D-2 attached hereto, or a first preferred mortgage in such form as may be reasonably satisfactory to the Administrative Agent and the Borrower (including, without limitation, any first preferred mortgage or statutory mortgage and related deed of covenants, as applicable, delivered pursuant to a Flag Jurisdiction Transfer), as such preferred mortgage may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof granted by the applicable Collateral Vessel Owner in favor of the Security Agent, as security trustee and as mortgagee.

 

“Collateral Vessel Owner” shall mean, at any time, a Subsidiary Guarantor which owns a Collateral Vessel.

 

“Commitment” shall mean, for each Lender, the amount set forth opposite such Lender’s name in Schedule I hereto as the same may be (x) terminated pursuant to Sections 3.02, 3.03 and/or 9, as applicable, or (y) adjusted from time to time as a result of assignments to or from such Lender pursuant to Section 2.11 or 11.04(b).

 

“Commitment Commission” shall have the meaning provided in Section 3.01(a).

 

“Commitment Termination Date” shall mean November 12, 2018.

 

“Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

 

“Commercial Management Agreement” shall mean any ship management agreement or similar agreement relating to the commercial management of a Collateral Vessel that is entered into between the Borrower or any Subsidiary Guarantor and a Commercial Manager that is neither the Borrower nor any Wholly-Owned Subsidiary of the Borrower (together with any amendments, restatements, supplements or other modifications thereto and any other ship management agreement or similar agreement relating to the commercial management of such Collateral Vessel entered into in substitution thereof with a Commercial Manager that is neither the Borrower nor any Wholly-Owned Subsidiary of the Borrower).

 

“Commercial Manager” shall mean, collectively, one or more commercial managers selected by the Borrower and reasonably acceptable to the Required Lenders including, without limitation, Genco Ship Management LLC, Genco Shipping Pte., Ltd., Genco Shipping A/S, and any other direct or indirect Wholly-Owned Subsidiary of the Borrower that may act as a commercial manager and each Pool Manager.

 

“Consolidated EBITDA” shall mean, with respect to any Person for any designated period, an amount equal to the Consolidated Net Income of such Person and its Subsidiaries for such period, plus (a) the following to the extent deducted in calculating such Consolidated Net Income: (i) Consolidated Interest Charges for such period; (ii) the provision for Federal, state, local and foreign income Taxes (and similar Taxes to the extent based on income or profits) payable by such Person and its Subsidiaries for such period; (iii) depreciation and amortization expense; (iv) extraordinary or non-recurring charges or losses (including without limitation the cumulative effect of changes in GAAP and impairment charges related to long lived assets and goodwill) of such Person and its Subsidiaries which do not represent a cash item in such period or any future period, (v) amortization of expense relating to non-vested awards of Equity Interests, (vi) fees, expenses and losses (if any) in connection with the Transaction and (vii) losses relating to sales, transfers or other dispositions of any Fleet Vessels, minus (b) to the extent included in calculating such Consolidated Net Income, (i) all extraordinary or non-recurring noncash items increasing Consolidated Net Income for such period, (ii) extraordinary gains for such period and (iii) any gains relating to sales, transfers or other dispositions of any Fleet Vessels (which, for the avoidance of doubt, shall not include any charter of any such Fleet Vessel).

 

“Consolidated Interest Charges” shall mean, with respect to any Person for any designated period, the sum of all interest, premium payments (including any prepayment premium in connection with the prepayment of Financial Indebtedness under certain credit facilities of the Borrower and certain of its Subsidiaries that were repaid in 2018), debt discount, fees, charges and related expenses of such Person and its Subsidiaries in connection with borrowed money (including capitalized interest) or in connection with a deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP.

 

“Consolidated Net Income” shall mean, with respect to any Person for any designated period, the net income (or loss) of such Person and its Subsidiaries for that period determined in accordance with GAAP.

 

“Consolidated Tangible Net Worth” shall mean, with respect to any Person, the Net Worth of such Person and its Subsidiaries determined on a consolidated basis in accordance with GAAP after appropriate deduction for any minority interests in Subsidiaries, minus goodwill.

 

“Contingent Obligation” shall mean, as to any Person, any obligation of such Person guaranteeing or intended to guarantee any Financial Indebtedness, leases, dividends or other obligations (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (a) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (b) to advance or supply funds (x) for the purchase or payment of any such primary obligation or (y) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (d) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term Contingent Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business and any products warranties extended in the ordinary course of business.  The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made (or, if the less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.

 

“Compliance Certificate” shall have the meaning provided in Section 7.01(e)(i).

 

“Credit Document Obligations” shall mean the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all amounts owing to the Administrative Agent, the Security Agent or any Lender pursuant to the terms  of this Agreement or any other Credit Document, including (x) the principal of, premium, if any, and interest on the Notes issued by, and the Loans made to, the Borrower under this Agreement and (y) all other obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code or similar operation of any other Debtor Relief Law, would become due), liabilities and indebtedness owing by the Borrower to the Secured Creditors (in the capacities referred to in the definition of Secured Creditors) under this Agreement and each other Credit Document to which the Borrower is a party (including, without limitation, indemnities, fees and interest thereon (including any interest accruing after the commencement of any bankruptcy, insolvency, receivership or similar proceeding at the rate provided for in this Agreement, whether or not such interest is an allowed claim in any such proceeding)), whether now existing or hereafter incurred under, arising out of or in connection with this Agreement and any such other Credit Document and the due performance and compliance by the Borrower with all of the terms, conditions and agreements contained in all such Credit Documents.  Notwithstanding anything to the contrary contained herein or in any other Credit Document, in no event will the Obligations include any Excluded Swap Obligations.

 

“Credit Documents” shall mean this Agreement, each Note, each Security Document, the Guaranty, and, after the execution and delivery thereof, each additional guaranty or additional security document executed pursuant to Section 7.11 or 8.07(d).

 

“Credit Facility” shall mean the senior secured term loan facility in the aggregate principal amount of up to US$108,000,000 as provided under this Agreement.

 

“Debtor Relief Laws” shall mean the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect.

 

“Default” shall mean any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default.

 

“Defaulting Lender” shall mean any Lender with respect to which a Lender Default is in effect.

 

“Disqualified Stock” shall mean, with respect to any Person, any Equity Interest of such Person that, by its terms (or by the terms of any security or other Equity Interests into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition, (a) matures or is mandatorily redeemable (other than solely for common shares of the Borrower) pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Credit Document Obligations that are accrued and payable and the termination of the Commitments), (b) is redeemable at the option of the holder thereof (other than solely for common shares of the Borrower), in whole or in part, (c) provides for the scheduled payments of dividends in cash (except that an Equity Interest shall not be deemed to be within this clause (c) if its terms provide that (i) cash dividends shall not be paid if prohibited by law or any agreement to which the Person is a party or (ii) such Person may substitute dividends of Equity Interests other than Disqualified Stock of such Person for cash) or (d) is or becomes convertible into or exchangeable for Financial Indebtedness or any other Equity Interests that would constitute Disqualified Stock, in each case, prior to the first anniversary of the Maturity Date; provided, however, that only the portion of the Equity Interests that so mature or are mandatorily redeemable, are so convertible or exchangeable or are so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided, further, however, that if such Equity Interest is issued to any employee or to any plan for the benefit of employees of the Borrower or its Subsidiaries or by any such plan to such employees, such Equity Interests shall not constitute Disqualified Stock solely because they may be required to be repurchased by the Borrower or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations or as a result of such employee's termination, death or disability.

 

“Disqualified Lender” shall mean any Person listed on Schedule IX hereto and any affiliates thereof which are clearly identifiable solely on the basis of similarity of name.

 

“Dividend” with respect to any Person, shall mean that such Person has declared or paid a dividend or distribution or returned any equity capital to its stockholders, partners or members or authorized or made any other distribution, payment or delivery of property (other than common stock, a conversion of Equity Interests into common stock or the right to purchase any of such stock of such Person) or cash to its stockholders, partners or members as such, or redeemed, retired, purchased or otherwise acquired, directly or indirectly, for a consideration of any shares of any class of its capital stock or any other Equity Interests outstanding on or after the Closing Date (or any options or warrants issued by such Person with respect to its capital stock or other Equity Interests), or set aside any funds for any of the foregoing purposes, or shall have permitted any of its Subsidiaries to purchase or otherwise acquire for a consideration (other than common stock, Qualified Preferred Stock and the right to purchase any of such stock of such Person) any shares of any class of the capital stock of, or other Equity Interests in, such Person outstanding on or after the Closing Date (or any options or warrants issued by such Person with respect to its capital stock or other Equity Interests).  Without limiting the foregoing, “Dividends” with respect to any Person shall also include all payments made or required to be made by such Person with respect to any stock appreciation rights, plans, equity incentive or achievement plans or any similar plans or setting aside of any funds for the foregoing purposes.

 

“Dollars” and the sign “$” shall each mean lawful money of the United States.

 

“Earnings” shall mean all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Borrower, the Subsidiary Guarantors or the Security Agent and which arise out of the ownership, use, operation or management of a Collateral Vessel, including (but not limited to):

 

(a)           all freight, hire and passage moneys, compensation, proceeds of off-hire insurance, and any other moneys earned, due or payable to the Borrower, the Subsidiary Guarantors or the Security Agent of whatsoever nature arising out of or as a result of the ownership, use, operation or management of the Collateral Vessel, including moneys and claims for moneys due and to become due in the event of the actual or constructive total loss of or requisition of use of or title to the Collateral Vessel for hire, remuneration for salvage and towage services, demurrage and detention moneys and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of a Collateral Vessel;

 

(b)           all moneys which are at any time payable under Insurances in respect of loss of earnings; and

 

(c)           if and whenever a Collateral Vessel is employed on terms whereby any moneys falling within paragraphs (a) or (b) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to a Collateral Vessel.

 

“Earnings Accounts” shall mean those certain deposit accounts of the Subsidiary Guarantors designated in the applicable Account Security Agreements as being pledged to the Security Agent, which deposit accounts shall be held with the Account Bank, and into which the Borrower shall procure that all Earnings and all hires, freights, insurance proceeds, income and other sums payable in respect of the Collateral Vessels are credited and which amounts shall be freely available to the Borrower and the Subsidiary Guarantors so long as no Event of Default has occurred and is continuing and notice has not been given to the Borrower by the Administrative Agent that such amounts shall not be freely available.

 

“Earnings Collateral” shall have the meaning provided in the Assignment of Earnings.

 

“EEA Financial Institution” shall mean (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clause (a) or (b) of this definition and is subject to consolidated supervision with its parent.

 

“EEA Member Country” shall mean any of the member states of the European Union, Iceland, Liechtenstein, Norway and the United Kingdom.

 

“EEA Resolution Authority” shall mean any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

 

“Eligible Transferee” shall mean and include a commercial bank, insurance company, financial institution, fund, trust or other Person which regularly purchases interests in loans or extensions of credit of the types made pursuant to this Agreement, any other Person which would constitute a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act as in effect on the Closing Date or other “accredited investor” (as defined in Regulation D of the Securities Act);

 

provided that neither (i) any Obligor or any Affiliate of any Obligor nor (ii) any natural Person  shall be an Eligible Transferee at any time.

 

“End Date” shall have the meaning set forth in the definition of “Applicable Margin”.

 

“Environmental Claims” shall mean any and all administrative, regulatory or judicial actions, suits, demands, demand letters, directives, orders, consent decrees, judgments, claims, liens, notices of noncompliance or violation, investigations or proceedings relating in any way to any Environmental Law or any permit issued, or any approval given, under any such Environmental Law (hereafter, “Claims”), including, without limitation, (a) any and all Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law and (b) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief in connection with alleged injury or threat of injury to health, safety or the environment due to the presence of Hazardous Materials.

 

“Environmental Law” shall mean any applicable Federal, state, foreign or local statute, Legal Requirement, law, treaty, protocol, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable written policy, deed or rule of common law now or hereafter in effect and in each case as amended, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, to the extent binding on the Borrower or any of its Subsidiaries, relating to the environment, or to Hazardous Materials, including, without limitation, CERCLA; OPA; the Federal Water Pollution Control Act and the Clean Water Act, 33 U.S.C. § 1251 et seq.; the Hazardous Material Transportation Act, 49 U.S.C. § 5101 et seq.; the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq. (to the extent relating to exposure to Hazardous Materials); and any state, international, local or foreign counterparts or equivalents thereof, in each case as amended from time to time, and any applicable rules, regulations, or requirements of an Acceptable Classification Society in respect of any Collateral Vessel.

 

“Equity Interests” of any Person shall mean any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any common stock, preferred stock, any limited or general partnership interest and any limited liability company membership interest.

 

“ERISA” shall mean the U.S. Employee Retirement Income Security Act of 1974, as awarded from time to time, and the regulations promulgated and rulings issued thereunder.  Section references to ERISA are to ERISA, as in effect at the date of this Agreement and any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor.

 

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated) which together with the Borrower or a Subsidiary of the Borrower would be deemed to be a “single employer” within the meaning of Section 414(b), (c), (m) or (o) of the Code.

 

“EU Bail-In Legislation Schedule” shall mean the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

 

“Eurodollar Rate” shall mean with respect to each Interest Period for a Loan, the interbank offered rate (rounded upward to the nearest 1/100 of one percent) for deposits of Dollars for a period equivalent to such period at or about 11:00 A.M. (London time) on the second Business Day before the first day of such period as is displayed on Reuters LIBOR 01 Page (or such other service as may be nominated by the ICE Benchmark Administration) (the “Screen Rate”) (or, if the Screen Rate is not available at such time, a comparable successor interbank rate for deposits in US Dollars that is, at such time, broadly accepted by the syndicated loan market in lieu of the London Interbank Offered Rate or, if no such broadly accepted comparable successor interbank rate exists at such time, a successor index

 

rate as the Administrative Agent may determine with the consent of the Borrower and the Required Lenders (which shall not be unreasonably withheld or delayed); provided that any such required consent shall be deemed to be given if such party fails to object to a request by the Administrative Agent for such consent within five (5) Business Days after such request); provided that if the Screen Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement; provided, further that if on such date no such rate is so displayed, the Eurodollar Rate for such period shall be the arithmetic average (rounded upward to the nearest 1/100 of 1%) of the rate quoted to the Administrative Agent by the Reference Banks for deposits of Dollars in an amount approximately equal to the amount in relation to which the Eurodollar Rate is to be determined for a period equivalent to such applicable Interest Period by the prime banks in the London interbank Eurodollar market at or about 11:00 A.M. (London time) on the second Business Day before the first day of such period, in each case divided (and rounded upward to the nearest 1/100 of 1%) by a percentage equal to 100% minus the then stated maximum rate of all reserve requirements (including, without limitation, any marginal, emergency, supplemental, special or other reserves required by applicable law) applicable to any member bank of the Federal Reserve System in respect of Eurocurrency funding or liabilities as defined in Regulation D (or any successor category of liabilities under Regulation D); provided that in the event the Eurodollar Rate calculated in the immediately preceding proviso shall be less than zero, the Eurodollar Rate for such period shall be deemed to be zero for the purposes of this Agreement.

 

“Event of Default” shall have the meaning provided in Section 9.

 

“Event of Loss” shall mean any of the following events: (x) the actual or constructive total loss of a Collateral Vessel or the agreed or compromised total loss of a Collateral Vessel; or (y) the capture, condemnation, confiscation, expropriation, requisition for title and not hire, purchase, seizure or forfeiture of, or any taking of title to, a Collateral Vessel.  An Event of Loss shall be deemed to have occurred: (i) in the event of an actual loss of a Collateral Vessel, at the time and on the date of such loss or, if that is not known, at noon Greenwich Mean Time on the date which such Collateral Vessel was last heard from; (ii) in the event of damage which results in a constructive or compromised or arranged total loss of a Collateral Vessel, at the time and on the date on which notice claiming the loss of the Collateral Vessel is given to the insurers; or (iii) in the case of an event referred to in clause (y) above, at the time and on the date on which such event is expressed to take effect by the Person making the same.  Notwithstanding the foregoing, if such Collateral Vessel shall have been returned to any Obligor following any event referred to in clause (y) above or (b) shall have been replaced by a dry bulk vessel satisfying the requirements of the definition of Additional Collateral and which shall become Additional Collateral, in each case prior to the date upon which payment is required to be made under Section 4.02(b), then no Event of Loss shall be deemed to have occurred by reason of such event.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934.

 

“Excluded Swap Obligation” shall mean, with respect to any Obligor, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Obligor of, or the grant by such Obligor of a security interest to secure, such Swap Obligation (or any Guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Obligor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guaranty of such Obligor or the grant of such security interest becomes effective with respect to such Swap Obligation.  If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guarantee or security interest is or becomes illegal.

 

“Excluded Taxes” shall mean any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in such Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 2.11) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 4.04, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 4.04(c), and (d) any U.S. federal withholding Taxes imposed under FATCA.

 

“Executive Order” shall mean the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2011.

 

“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantially comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(i) of the Code and any intergovernmental agreement, or legislation to implement the foregoing.

 

“FCPA” shall have the meaning provided in Section 6.10(d).

 

“Federal Funds Rate” shall mean, for any day, a rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published for such day (or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 11:00 A.M. (New York time) on such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by the Administrative Agent in its sole discretion.

 

“Fee Letters” shall mean any letter agreement between, inter alios, the Administrative Agent and any Obligor or the Mandated Lead Arrangers and any Obligor with respect to fees payable pursuant to or in connection with this Agreement.

 

“Fees” shall mean all amounts payable pursuant to or referred to in Section 3.01(b).

 

“Financial Covenants” shall mean the covenants set forth in Section 8.07.

 

“Financial Indebtedness” shall mean any obligation for the payment or repayment of money, whether present or future, actual or contingent, in respect of (i) moneys borrowed; (ii) any acceptance credit; (iii) any bond, note, debenture, loan stock or similar instrument; (iv) any finance or capital lease; (v) receivables sold or discounted (other than on a non-recourse basis); (vi) deferred payments for assets or services; (vii) any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing; (viii) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; (ix) all Disqualified Stock; and (x) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in clauses (i) through (ix) above; provided that the Financial Indebtedness shall not in any event include trade

 

payables and expenses accrued in the ordinary course of business or any obligation under any Hedging Agreement.

 

“Flag Jurisdiction” shall mean, with respect to any Collateral Vessel, the flag jurisdiction of such Collateral Vessel on the Borrowing Date for such Collateral Vessel, which, for the avoidance of doubt, must be an Acceptable Flag Jurisdiction.

 

“Flag Jurisdiction Transfer” shall mean the transfer of the registration and flag of a Collateral Vessel from one Acceptable Flag Jurisdiction to another Acceptable Flag Jurisdiction; provided that the following conditions are satisfied with respect to such exchange or transfer:

 

(a)           On each Flag Jurisdiction Transfer Date, the Obligor which is consummating a Flag Jurisdiction Transfer on such date shall have duly authorized, executed and delivered, and caused to be recorded in the appropriate vessel registry a Collateral Vessel Mortgage (which Collateral Vessel Mortgage shall, to the extent possible, be registered as a “continuation mortgage” to the original Collateral Vessel Mortgage recorded in the initial Acceptable Flag Jurisdiction) with respect to the Collateral Vessel being transferred (the “Transferred Collateral Vessel”) and such Collateral Vessel Mortgage shall be effective to create in favor of the Security Agent and/or the Lenders a legal, valid and enforceable first priority security interest, in and lien upon such Transferred Collateral Vessel, subject only to Permitted Liens.  All filings, deliveries of instruments and other actions necessary or desirable in the reasonable opinion of the Security Agent to perfect and preserve such security interests shall have been duly effected and the Security Agent shall have received evidence thereof in form and substance reasonably satisfactory to the Security Agent.

 

(b)          On each Flag Jurisdiction Transfer Date, the Administrative Agent shall have received from counsel to the Obligors consummating the relevant Flag Jurisdiction Transfer reasonably satisfactory to the Administrative Agent practicing in those jurisdictions in which the Transferred Collateral Vessel is registered and/or the Obligor owning such Transferred Collateral Vessel is organized, opinions which shall be addressed to the Administrative Agent and each of the Lenders and dated such Flag Jurisdiction Transfer Date, which shall (x) be in form and substance reasonably acceptable to the Administrative Agent and (y) cover the perfection of the security interests granted pursuant to the Collateral Vessel Mortgage(s) and such other matters incident thereto as the Administrative Agent may reasonably request.

 

(c)           On each Flag Jurisdiction Transfer Date:

 

(i)            the Administrative Agent shall have received (x) a certificate of ownership issued by the registry of the applicable Acceptable Flag Jurisdiction showing the registered ownership of the Transferred Collateral Vessel transferred on such date in the name of the relevant Subsidiary Guarantor and (y) a certificate of ownership and encumbrance or, as applicable, a transcript of registry with respect to the Transferred Collateral Vessel transferred on such date, indicating no record liens other than Liens in favor of the Security Agent and/or the Lenders and Permitted Liens; and

 

(ii)           the Administrative Agent shall have received a report, in form and scope reasonably satisfactory to the Administrative Agent, from a firm of independent marine insurance brokers reasonably acceptable to the Administrative Agent with respect to the insurance maintained by the Obligor in respect of the Transferred Collateral Vessel transferred on such date, together with a certificate from such broker certifying that such insurances (x) are placed with such insurance companies and/or underwriters and/or clubs, in such amounts, against such risks, and in such form, as are customarily insured against by similarly situated insureds for the protection of the Security Agent as

 

mortgagee and (y) conform with the insurance requirements of the respective Collateral Vessel Mortgages.

 

(d)          On or prior to each Flag Jurisdiction Transfer Date, the Administrative Agent shall have received a certificate, dated the Flag Jurisdiction Transfer Date, signed by an Authorized Officer, member, or general partner of the Obligor consummating such Flag Jurisdiction Transfer, certifying that (i) all necessary governmental (domestic and foreign) and third party approvals and/or consents, including evidence of deletion from the existing Flag Jurisdiction, in connection with the Flag Jurisdiction Transfer being consummated on such date and otherwise referred to herein shall have been obtained and remain in effect or that no such approvals and/or consents are required, (ii) there exists no judgment, order, injunction or other restraint prohibiting or imposing materially adverse conditions upon such Flag Jurisdiction Transfer or the other transactions contemplated by this Agreement and (iii) copies of any authorizing resolutions approving the Flag Jurisdiction Transfer of such Obligor and any other matter the Administrative Agent may request.

 

(e)           On each Flag Jurisdiction Transfer Date, the Collateral and Guaranty Requirements for the Transferred Collateral Vessel shall have been satisfied.

 

(f)           On each Flag Jurisdiction Transfer Date, (i) no Event of Default has occurred and is continuing and (ii) all representations and warranties contained herein or in any other Credit Document shall be true and correct in all material respects (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date).

 

“Flag Jurisdiction Transfer Date” shall mean the date on which a Flag Jurisdiction Transfer occurs.

 

“Fleet Vessels” shall mean any vessel (including the Collateral Vessels) from time to time owned by the Borrower or any of its Subsidiaries.

 

“Foreign Official” shall mean an officer, employee, or any person acting on behalf of any foreign governmental body at the national, state, county, city, municipal, or any other level (including any department, agency, or instrumentality thereof), as well as entities partially or wholly-owned or controlled by such a governmental body, state-owned or controlled companies, and entities owned by sovereign wealth funds.  The term also includes any officer, employee, or any person acting on behalf of a public international organization, a political party, party official, or candidate thereof.

 

“Foreign Pension Plan” shall mean any plan, fund (including, without limitation, any superannuation fund) or other similar program established or maintained outside the United States of America by the Borrower or any one or more of its Subsidiaries primarily for the benefit of employees of the Borrower or such Subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, and which plan would be covered by Title IV of ERISA but which is not subject to ERISA by reason of Section 4(b)(4) of ERISA.

 

“GAAP” shall have the meaning provided in Section 11.07(a).

 

“Governmental Authority” shall mean the government of the United States, any other nation or any political subdivision thereof, whether state, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

“Guaranty” shall mean the guaranty substantially in the form of Exhibit C hereto to be executed by each Subsidiary Guarantor.

 

“Hazardous Materials” shall mean: (a) any petroleum or petroleum products, petroleum byproducts, petroleum breakdown products, radioactive materials, asbestos or asbestos-containing material in any form that is or could become friable, urea formaldehyde foam insulation, transformers or other equipment that contain dielectric fluid containing levels of polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or substances defined as or included in the definition of “hazardous substances,” “hazardous waste,” “hazardous materials,” “extremely hazardous substances,” “restricted hazardous waste,” “toxic substances,” “toxic waste,” “toxic pollutants,” “contaminants,” or “pollutants,” or words of similar import, under any applicable Environmental Law; and (c) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any Governmental Authority under any Environmental Law.

 

“Hedging Agreement” shall mean any interest rate swap agreement, interest rate cap agreement, interest collar agreement, interest rate hedging agreement, interest rate floor agreement or other similar agreement or arrangement meant to hedge against interest rate fluctuations under this Agreement.

 

“Hedging Collateral” shall mean all “Hedging Collateral” as defined in the respective Assignment of Hedging Agreements.

 

“Highest Applicable Margin” shall have the meaning set forth in the definition of “Applicable Margin”.

 

“IHM” shall mean, in relation to a Fleet Vessel, an inventory of hazardous materials (also known as a green passport) issued by that Fleet Vessel's classification society, which includes a list of any and all materials known to be potentially hazardous and listed in the construction of or on board that Fleet Vessel, their location and approximate quantities.

 

“Indemnified Parties” shall have the meaning provided in Section 11.01(b).

 

“Indemnified Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Obligor under any Credit Document and (b) to the extent not otherwise described in preceding clause (a), Other Taxes.

 

“Insurance Collateral” shall have the meaning provided in the Assignment of Insurances.

 

“Interest Determination Date” shall mean, with respect to any Loan, the second Business Day prior to the commencement of any Interest Period relating to such Loan.

 

“Interest Period” shall have the meaning provided in Section 2.07.

 

“Interest Rate” shall have the meaning provided in Section 2.06(a).

 

“International Group” shall have the meaning provided in Schedule IV-A.

 

“Investments” shall have the meaning provided in Section 8.05.

 

“ISM Code” shall mean the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organisation Assembly as Resolutions A.741 (18) and A.788 (19), as the same may be amended or supplemented from time to time.

 

“ISPS Code” shall mean the International Ship and Port Facility Security Code constituted pursuant to resolution A.924(22) of the International Maritime Organisation (“IMO”) adopted by a diplomatic conference of the IMO on Maritime Security on 13 December 2002 and now set out in Chapter XI-2 of the Safety of Life at Sea Convention (SOLAS) 1974 (as amended) to take effect on 1 July 2004.

 

“Joinder Agreement” shall have the meaning provided in the definition of “Collateral and Guaranty Requirements”.

 

“Leaseholds” of any Person shall mean all the right, title and interest of such Person as lessee or licensee in, to and under leases or licenses of land, improvements and/or fixtures.

 

“Legal Requirement” shall mean, as to any Person, any law, treaty, convention, statute, ordinance, decree, award, requirement, order, writ, judgment, injunction, rule, regulation (or official interpretation of any of the foregoing) of, and the terms of any license or permit issued by, any Governmental Authority which is binding on such Person.

 

“Lender” shall mean each financial institution with Commitments and/or with outstanding Loans and listed on Schedule I hereto, as well as any Person which becomes a “Lender” hereunder pursuant to Section 11.04(b).

 

“Lender Creditors” shall mean the Lenders holding from time to time outstanding Loans and/or Commitments, the Administrative Agent and the Security Agent, each in their respective capacities.

 

“Lender Default” shall mean, as to any Lender, (a) the wrongful refusal (which has not been retracted) of such Lender or the failure of such Lender (which has not been cured) to make available its portion of any Borrowing when required to do so in accordance with the terms of this Agreement unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, (b) such Lender having been deemed insolvent or having become the subject of a bankruptcy or insolvency proceeding or a takeover by a regulatory authority under any Debtor Relief Law or had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, (c) such Lender has become the subject of a Bail-In Action or (d) such Lender having notified the Administrative Agent and/or any Obligor (x) that it does not intend to comply with its obligations under Section 2.01(a) in circumstances where such non-compliance would constitute a breach of such Lender’s obligations under the respective Section (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied) or (y) of the events described in preceding clauses (b) or (c); provided that, for purposes of (and only for purposes of) Section 2.11, the term “Lender Default” shall also include, as to any Lender, (i) any Affiliate of such Lender that has “control” (within the meaning provided in the definition of “Affiliate”) of such Lender having been deemed insolvent or having become the subject of a bankruptcy or insolvency proceeding or a takeover by a regulatory authority under any Debtor Relief Law, (ii) any previously cured “Lender Default” of such Lender under this Agreement, unless such Lender Default has ceased to exist for a period of at least 90 consecutive days, (iii) any default by such Lender with respect to its obligations under any other credit facility to which it is a party and which the Administrative Agent believes in good faith has occurred and is continuing and (iv) the failure of such Lender to make available its portion of any Borrowing within one (1) Business Day of the date (x) the Administrative Agent (in its capacity as a Lender) or (y) Lenders constituting the Required Lenders has or have, as applicable, funded its or their portion thereof.

 

“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, priority or other security interest of any

 

kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing or similar statement or notice validly filed under the UCC or any other similar recording or notice statute, and any lease having substantially the same effect as any of the foregoing).

 

“Loan” shall have the meaning provided in Section 2.01(a).

 

“Major Casualty” shall mean, in relation to a Collateral Vessel, any casualty to that Collateral Vessel in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $1,500,000 or the equivalent in any other currency.

 

“Mandated Lead Arrangers” shall have the meaning provided in the first paragraph of this Agreement.

 

“Margin Regulations” shall mean Regulations T, U and X issued by the Board of Governors of the United States Federal Reserve System and any successor regulations thereto, as in effect from time to time.

 

“Margin Stock” shall have the meaning provided in Regulation U.

 

“Market Disruption Event” shall mean either of the following events:

 

(a)           if, at or about noon on the Interest Determination Date for the relevant Interest Period, the Screen Rate is not available and none or only one of the Reference Banks supplies a rate to the Administrative Agent to determine the Eurodollar Rate for the relevant Interest Period; or

 

(b)           before close of business in New York on the Interest Determination Date for the relevant Interest Period, the Administrative Agent receives notice from a Lender or Lenders whose outstanding Loans exceed 50% of the aggregate Loans outstanding at such time that (i) the cost to such Lenders of obtaining matching deposits in the London interbank Eurodollar market for the relevant Interest Period would be in excess of the Eurodollar Rate for such Interest Period or (ii) such Lenders are unable to obtain funding in the London interbank Eurodollar market.

 

“Material Adverse Effect” shall mean any event, change or condition that, individually or taken as a whole has had or could reasonably be expected to have a material adverse effect (w) on the rights or remedies of the Lender Creditors, (x) on the ability of the Borrower or any Subsidiary Guarantor, or the Borrower and its Subsidiaries taken as a whole, to perform its or their obligations to the Lender Creditors, (y) with respect to the Transaction or (z) on the property, assets, operations, liabilities, condition (financial or otherwise), or prospects of the Borrower or any Subsidiary Guarantor, or the Borrower and its Subsidiaries taken as a whole.

 

“Materiality Amount” shall mean $7,500,000.

 

“Maturity Date” shall mean the fifth anniversary of the Closing Date.

 

“Money Laundering” shall have the meaning given to it in Article 1 of Directive 2005/60/EC of the European Parliament and of the Council of the European Union and the Directive (EU) 2015/849 of the European Parliament and of the Council of the European Union and shall include any analogous definition provided in any anti-money laundering laws and regulations, including the PATRIOT Act enacted by any Sanctions Authority or any other relevant Governmental Authority.

 

“Moody’s” shall mean Moody’s Investors Service, Inc. and its successors.

 

“Mortgagee’s Insurances” shall mean all policies and contracts of mortgagees interest insurance, mortgagees interest insurance additional perils (pollution) insurance and any other insurance from time to time taken out by the Security Agent in relation to a Collateral Vessel.

 

“Multiemployer Plan” shall mean an “employee pension benefit plan” (within the meaning of Section 3(2) of ERISA) which is a “multiemployer plan” (within the meaning of Section 4001(a)(3) of ERISA) and which is currently contributed to by (or to which there is a current obligation to contribute of) the Borrower or a Subsidiary of the Borrower or any ERISA Affiliate (other than any Person who is considered an ERISA Affiliate solely pursuant to subsection (m) or (o) of Section 414 of the Code), and any such “multiemployer plan” (within the meaning of Section 4001(a)(3) of ERISA) to which the Borrower or a Subsidiary of the Borrower or any ERISA Affiliate (other than any Person who is considered an ERISA Affiliate solely pursuant to subsection (m) or (o) of Section 414 of the Code) contributed to or had an obligation to contribute to such “multiemployer plan” (within the meaning of Section 4001(a)(3) of ERISA) during the preceding five-year period.

 

“Net Worth” shall mean, as to any Person, the sum of its capital stock, capital in excess of par or stated value of shares of its capital stock, retained earnings and any other account which, in accordance with GAAP, constitutes stockholders’ equity, but excluding treasury stock.

 

“Non-Consenting Lender” shall have the meaning provided in Section 11.13(b).

 

“Non-Defaulting Lender” shall mean and include each Lender other than a Defaulting Lender.

 

“Note” shall have the meaning provided in Section 2.04(a).

 

“Notice of Borrowing” shall have the meaning provided in Section 2.02.

 

“Notice Office” shall mean the office of the Administrative Agent located at 12 Place des Etats-Unis, 92120  Montrouge, France, or such other office as the Administrative Agent may hereafter designate in writing as such to the other parties hereto.

 

“Obligations” shall mean the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all amounts owing to the Administrative Agent, the Security Agent or any Lender pursuant to the terms  of this Agreement or any other Credit Document, including (x) the principal of, premium, if any, and interest on the Notes issued by, and the Loans made to, the Borrower under this Agreement and (y) all other obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code or similar operation of any other Debtor Relief Law, would become due), liabilities and indebtedness owing by the Borrower to the Secured Creditors (in the capacities referred to in the definition of Secured Creditors) under this Agreement and each other Credit Document to which the Borrower is a party (including, without limitation, indemnities, fees and interest thereon (including any interest accruing after the commencement of any bankruptcy, insolvency, receivership or similar proceeding at the rate provided for in this Agreement, whether or not such interest is an allowed claim in any such proceeding)), whether now existing or hereafter incurred under, arising out of or in connection with this Agreement and any such other Credit Document and the due performance and compliance by the Borrower with all of the terms, conditions and agreements contained in all such Credit Documents.  Notwithstanding anything to the contrary contained herein or in any other Credit Document, in no event will the Obligations include any Excluded Swap Obligations.

 

“Obligors” shall mean the Borrower and each Subsidiary Guarantor and “Obligor” shall mean any one of them.

 

“OPA” shall mean the Oil Pollution Act of 1990, as amended, 33 U.S.C. § 2701 et seq., 46 U.S.C. §3703(a) et seq.

 

“Organizational Documents” with respect to any Obligor shall mean the memorandum of association or certificate of incorporation, as the case may be, certificate of formation (including, without limitation, by the filing or modification of any certificate of designation), by-laws, limited liability company agreement or partnership agreement (or equivalent organizational documents) of such Obligor.

 

“Other Connection Taxes” shall mean, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising solely from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Credit Document, or sold or assigned an interest in any Loan or Credit Document).

 

“Other Creditors” shall mean CACIB and any other Lender or any affiliate thereof and their successors and assigns, if any (even if such Lender or affiliate subsequently ceases to be a Lender or affiliate of a Lender under this Agreement for any reason), with which the Borrower enters into any Secured Hedging Agreements from time to time.

 

“Other Obligations” shall mean the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all amounts owing to the Other Creditors (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code or similar operation of any other Debtor Relief Law, would become due), liabilities and indebtedness owing by the Borrower to the Other Creditors (in the capacities referred to in the definition of Other Creditors) under any Secured Hedging Agreement, whether such Secured Hedging Agreement is now in existence or hereafter arising and the due performance and compliance by the Borrower with all of the terms, conditions and agreements contained in therein.  Notwithstanding anything to the contrary contained herein or in any other Credit Document, in no event will the Other Obligations include any Excluded Swap Obligations.

 

“Other Taxes” shall have the meaning provided in Section 4.04(b).

 

“Participant Register” shall have the meaning provided in Section 11.04(a).

 

“PATRIOT Act” shall have the meaning provided in Section 11.21.

 

“Payment Date” shall mean the last Business Day of each March, June, September and December occurring after the Closing Date and commencing with the last Business Day of December 31, 2018 and (ii) the Maturity Date.

 

“Payment Office” shall mean the office of the Administrative Agent located at 12 Place des Etats-Unis, 92120  Montrouge, France, or such other office as the Administrative Agent may hereafter designate in writing as such to the other parties hereto.

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto.

 

“Permitted Holders” shall mean Apollo Global Management LLC, Centerbridge Partners L.P., and Strategic Value Partners, LLC; their respective Affiliates; and their respective funds, managed accounts, and related entities managed by any of them or their respective Affiliates, or Wholly-Owned subsidiaries of the foregoing; but not including, however, any of their operating portfolio companies.

 

“Permitted Liens” shall have the meaning provided in Section 8.01.

 

“Person” shall mean any individual, partnership, joint venture, firm, corporation, association, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof.

 

“Plan” shall mean any “employee pension benefit plan” as defined in Section 3(2) of ERISA, which is currently maintained or contributed to by (or to which there is a current obligation to contribute of) the Borrower or a Subsidiary of the Borrower or any ERISA Affiliate and which is subject to ERISA.

 

“Pledge Agreement” shall mean the pledge agreement in connection with the Equity Interests of each Subsidiary Guarantor substantially in the form of Exhibit E to be executed by the Borrower and each Subsidiary Guarantor, as applicable.

 

“Pledge Agreement Collateral” shall mean all “Collateral” as defined in the Pledge Agreement.

 

“Pledged Charter” shall have the meaning provided in the definition of “Collateral and Guaranty Requirements”.

 

“Pool Manager” shall mean Clipper Group (Management) Ltd. – Clipper Logger Pool, Clipper Bulk A/S – Clipper Sapphire Pool, AS Klaveness Chartering – Bulkhandling Handymax AS, Lauritzen Bulkers, Navig8 Bulk Pool Inc., Baumarine AS, Oslo and any other internationally reputable pool managers (in the reasonable opinion of the Administrative Agent).

 

“Preferred Equity Interest” shall mean, as applied to the Equity Interests of any Person, Equity Interests of such Person (other than common Equity Interests of such Person) of any class or classes (however designed) that ranks prior, as to the payment of dividends or as to the distribu-tion of assets upon any voluntary or involuntary liquidation, dissolution or winding up of such Person, to shares of Equity Interests of any other class of such Person, and shall include any Disqualified Stock.

 

“Pro Rata Share” shall have the definition provided in Section 4.05(b).

 

“Qualified Preferred Stock” shall mean any Preferred Equity Interest other than Disqualified Stock.

 

“Quarterly Pricing Certificate” shall have the meaning set forth in the definition of “Applicable Margin”.

 

“Recipient” shall mean (a) any Agent and (b) any Lender.

 

“Real Property” of any Person shall mean all the right, title and interest of such Person in and to land, improvements and fixtures, including Leaseholds.

 

“Reference Banks” shall mean, at any time, each Lender which agrees to act as a Reference Bank.

 

“Register” shall have the meaning provided in Section 11.17.

 

“Regulation D” shall mean Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof establishing reserve requirements.

 

“Regulation T” shall mean Regulation T of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.

 

“Regulation U” shall mean Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.

 

“Regulation X” shall mean Regulation X of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.

 

“Release” shall mean any releasing or threatening to release, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing or migration into, on or about the environment or any structure. “Released” shall have a corresponding meaning.

 

“Relevant Vessel” shall have the meaning provided in Section 2.01(b).

 

“Replaced Lender” shall have the meaning provided in Section 2.11.

 

“Replacement Lender” shall have the meaning provided in Section 2.11.

 

“Replacement Vessel” shall mean a vessel replacing one or more Collateral Vessels in accordance with the requirements set forth pursuant to Section 4.02(b). Such Replacement Vessel must be (i) a dry bulk vessel, (ii) between 55,000 dwt and 210,000 dwt, (iii) of an age not in excess of the age of the Collateral Vessel it is replacing when it becomes a Collateral Vessel, (iv) classed with an Acceptable Classification Society, (v) registered under the flag of an Acceptable Flag Jurisdiction, (vi) built at a reputable yard and (vii) owned by a Subsidiary Guarantor.

 

“Reportable Event” shall mean an event described in Section 4043(c) of ERISA with respect to a Plan (other than any Plan maintained by a Person who is considered an ERISA Affiliate solely pursuant to subsection (m) or (o) of Section 414 of the Code or any Multiemployer Plan) that is subject to Title IV of ERISA other than those events as to which the 30-day notice period referred to in Section 4043 is waived.

 

“Representative” shall have the definition provided in Section 4.05(e).

 

“Required Insurance” shall mean insurance as set forth on Schedule IV-A hereto.

 

“Required Lenders” shall mean, at any time, Non-Defaulting Lenders the sum of whose outstanding principal amount of the Loans and Commitments at such time represents in excess of 66 2/3% of the sum of all outstanding principal amount of the Loans and available Commitments of Non-Defaulting Lenders.

 

“Restricted Cash and Cash Equivalents” shall mean all cash and Cash Equivalents of the Borrower and its Subsidiaries other than Unrestricted Cash and Cash Equivalents.

 

“Restricted Party” shall mean a Person (a) that is listed on any Sanctions List (whether designated by name or by reason of being included in a class of person); (b) that is domiciled, registered as located or having its main place of business in, or is incorporated under the laws of, a Sanctioned Country; (c) that is subject to restrictions under Sanctions Laws for being  directly or indirectly owned 50% or more by or otherwise controlled by a Person referred to in clauses (a) and/or (b) above; or (d) with which any Lender is prohibited from dealing or otherwise engaging in a transaction with by any Sanctions Laws.

 

“Returns” shall have the meaning provided in Section 6.11(b).

 

“S&P” shall mean S&P Global Inc., and its successors.

 

“Sanctions Authority” shall mean (a) the United Nations, the European Union, the member states of the European Union, the Kingdom of Norway, the United States of America and any

 

authority acting on behalf of any of them in connection with Sanctions Laws, including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”), the U.S. Department of State and Her Majesty’s Treasury of the United Kingdom and (b) otherwise, any other jurisdiction where an Obligor or is organized or whose law is applicable to an Obligor.

 

“Sanctions Laws” shall mean all economic or financial sanctions laws and/or regulations, trade embargoes, freezing provisions, prohibitions, restructure measures, decisions, executive orders or notices from regulators implemented, adapted, imposed, administered, enacted and/or enforced by any Sanctions Authority.

 

“Sanctions List” shall mean any list of prohibited persons, vessels or entities published in connection with Sanctions Laws by or on behalf of any Sanctions Authority that has the effect of prohibiting transactions with such persons, including the Specially Designated Nationals and Blocked Persons List and other prohibited party lists maintained by OFAC or any list of Persons issued by OFAC, including the Executive Order, at its official website or any replacement website or other replacement official publication

 

“Sanctioned Country” shall mean, at any time, a country, region or territory which is itself, or whose government is, the subject or target of any comprehensive country-wide, region-wide or territory-wide Sanctions Laws.

 

“Scheduled Repayment” shall mean (i) for each Payment Date until the Maturity Date, an amount equal to 100% of the Amortization Amount and (ii) on the Maturity Date, an amount equal to the remaining outstanding amount of Loans as of such date, in each case, as set forth on Schedule X. The Administrative Agent shall, at the request of the Borrower following the substitution of a Collateral Vessel with a Replacement Vessel pursuant to Section 4.02(b), issue a recalculated Schedule X in accordance with the provisions set forth in the definition of “Amortization Amount”.

 

“Screen Rate” shall have the meaning provided in the definition of Eurodollar Rate.

 

“Secured Creditors” shall mean collectively the Other Creditors together with the Lender Creditors.

 

“Secured Hedging Agreement” shall mean any Hedging Agreement entered into with an Other Creditor and coordinated by CACIB or any of its Affiliates, as swap coordinator, meant to hedge interest rate or currency fluctuations under this Agreement.

 

“Secured Obligations” shall mean (a) the Credit Document Obligations, (b) the Other Obligations, (c) any and all sums advanced by the Security Agent in order to preserve the Collateral or preserve its security interest in the Collateral, (d) in the event of any proceeding for the collection or enforcement of any indebtedness, obligations or liabilities of the Obligors referred to in clauses (a) and (b) above, after an Event of Default shall have occurred and be continuing, the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Security Agent of its rights hereunder, together with reasonable attorneys’ fees and court costs, and (e) all amounts paid by any Secured Creditor as to which such Secured Creditor has the right to reimbursement under the Security Documents.  In no event will the Secured Obligations include any Excluded Swap Obligations.

 

“Securities Act” shall mean the Securities Act of 1933, as amended.

 

“Security Agent” shall mean the Administrative Agent acting as mortgagee, security trustee or security agent for the Secured Creditors pursuant to the Security Documents.

 

“Security Documents” shall mean the Guaranty, the Pledge Agreement, the Assignment of Earnings, the Assignment of Charter, the Assignment of Insurances, each Collateral Vessel Mortgage, each Account Security Agreement, any Assignment of Hedging Agreements (if applicable) and, after the execution and delivery thereof, each additional security document executed pursuant to Section 7.11.

 

“Specified Currency” shall have the meaning provided in Section 11.18.

 

“Specified Requirements” shall mean the requirements set forth in clauses (i), (vi), (viii)(a), (viii)(b), (viii)(c), (viii)(d) and (viii)(i) of the definition of “Collateral and Guaranty Requirements.”

 

“Start Date” shall have the meaning set forth in the definition of “Applicable Margin”.

 

“Subsidiary” shall mean, as to any Person, (i) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person and/or one or more Subsidiaries of such Person and (ii) any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Subsidiaries of such Person has more than 50% of the Equity Interests at the time.

 

“Subsidiary Guarantor” shall mean each direct or indirect Wholly-Owned Subsidiary of the Borrower that owns, directly or indirectly, any Collateral Vessel, on a joint and several basis, each such Subsidiary to be party to the Guaranty or execute a counterpart thereof after the Closing Date.

 

“Swap Obligation” shall mean, with respect to any Obligor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

 

“Taxes” shall mean all present or future taxes, levies, imposts, duties, fees, assessments, deductions, withholdings or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

“Technical Manager” shall mean any of Anglo-Eastern Shipmanagement, Vships USA LLC and Wallem Ship Management Limited, or any Affiliates of the foregoing which provide such technical management services, or one or more other technical managers selected by the Borrower and reasonably acceptable to the Required Lenders.

 

“Technical Management Agreements” shall mean, collectively, all of the technical ship management agreements with respect to the relevant Collateral Vessels and entered into with the relevant Technical Manager, each as in effect on the date hereof and without giving effect to any amendments, restatements, supplements or other modifications thereto and any other technical ship management agreement entered into in substitution of any thereof and meeting the requirements of Section 8.12.

 

“Test Period” shall mean each period of four consecutive fiscal quarters, in each case taken as one accounting period.

 

“Total Capitalization” shall mean, at any time of determination for any Person, the sum of Total Indebtedness of such Person at such time and Consolidated Tangible Net Worth of such Person at such time.

 

“Total Commitments” shall mean, at any time, the sum of the Commitments of each of the Lenders at such time.

 

“Total Indebtedness” shall mean, as at any date of determination for any Person, the aggregate stated balance sheet amount of all Financial Indebtedness (but including in any event the then outstanding principal amount of the Loans) of such Person and its Subsidiaries on a consolidated basis as determined in accordance with GAAP.

 

“Total Net Leverage Ratio” shall mean, with respect to any Test Period, the ratio of (a) (i) Total Indebtedness of the Borrower and its Subsidiaries outstanding as of the last day of such Test Period minus (ii) all cash and Cash Equivalents of the Borrower and its Subsidiaries to (b) Consolidated EBITDA of the Borrower and its Subsidiaries for such Test Period.

 

“Transaction” shall mean, collectively, (a) each Collateral Vessel Acquisition, (b) the entering into of the Credit Documents and the incurrence of the Loans hereunder and (c) the payment of all fees and expenses in connection with the foregoing.

 

“Transferred Collateral Vessel” shall have the meaning provided in the definition of “Flag Jurisdiction Transfer” in this Section 1.01.

 

“UCC” shall mean the Uniform Commercial Code as from time to time in effect in the relevant jurisdiction.

 

“Unfunded Current Liability” of any Plan shall mean the amount, if any, as of the most recent valuation date for the applicable Plan, by which the present value of the Plan’s benefit liabilities determined in accordance with actuarial assumptions at such time consistent with those prescribed by Section 430 of the Code and Section 303 of ERISA, exceeds the fair market value of all plan assets allocable to such liabilities under Title IV of ERISA.

 

“United States” and “U.S.” shall each mean the United States of America.

 

“Unrestricted Cash and Cash Equivalents” shall mean, when referring to cash or Cash Equivalents of the Borrower or any of its Subsidiaries, that such cash or Cash Equivalents (i) does not appear (or would not be required to appear) as “restricted” on a consolidated balance sheet of the Borrower or of any such Subsidiary, (ii) are not subject to a Lien in favor of any Person (other than a Lien in connection with any Financial Indebtedness permitted hereunder) or (iii) are otherwise generally available for use by the Borrower or such Subsidiary.

 

“Unutilized Commitments” shall mean, at any time, the Total Commitments at such time less the aggregate outstanding principal amount of the Loans made at such time.

 

“Vessel Acquisition Documentation” shall mean the documentation entered into by any Obligor or Subsidiary of any Obligor in connection with the acquisition of a Collateral Vessel.

 

“Wholly-Owned Subsidiary” shall mean, as to any Person, (a) any corporation 100% of whose capital stock (other than director’s qualifying shares) is at the time directly or indirectly owned by such Person and/or one or more Wholly-Owned Subsidiaries of such Person and (b) any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Wholly-Owned Subsidiaries of such Person has directly or indirectly 100% of the Equity Interests at such time.

 

“Write-Down and Conversion Powers” shall mean, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

 

1.02         Other Definitional Provisions.  (a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Credit Documents or any certificate or other document made or delivered pursuant hereto or thereto.

 

(b)           As used herein and in the other Credit Documents, and any certificate or other document made or delivered pursuant hereto or thereto, (i) accounting terms not defined in Section 1.01 shall have the respective meanings given to them under GAAP, (ii) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (iii) the word “incur” shall be construed to mean incur, create, issue, assume, become liable in respect of or suffer to exist (and the words “incurred” and “incurrence” shall have correlative meanings), (iv) unless the context otherwise requires, the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, Equity Interests, securities, revenues, accounts, leasehold interests and contract rights, (v) the word “will” shall be construed to have the same meaning and effect as the word “shall” and (vi) unless the context otherwise requires, any reference herein (A) to any Person shall be construed to include such Person’s successors and assigns and (B) to the Borrower or any other Obligor shall be construed to include the Borrower or such Obligor as debtor and debtor-in-possession and any receiver or trustee for the Borrower or any other Obligor, as the case may be, in any insolvency or liquidation proceeding.

 

(c)           The words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.

 

(d)           The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

 

1.03         Rounding.  Any financial ratios required to be maintained by the Borrower pursuant to this Agreement (or required to be satisfied in order for a specific action to be permitted under this Agreement) shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding up if there is no nearest number).

 

SECTION 2            Amount and Terms of Credit Facilities

 

 

(b)           Notwithstanding the foregoing, in no event will the principal amount of the Loans made on a Borrowing Date in respect of a Collateral Vessel exceed the lesser of (i) the applicable amount set forth opposite the Collateral Vessel with respect to which Loans are made on such a Borrowing Date (such Collateral Vessel, the “Relevant Vessel”) under the heading “Maximum Loan

 

Amount” in Schedule VI hereto and (ii) 45.0% of the Appraised Value of the Relevant Vessel as determined in accordance with the Appraisals delivered in connection with the Collateral and Guaranty Requirements for such Relevant Vessel.

 

 

(a)           the aggregate principal amount of the Loans to be incurred pursuant to such Borrowing;

 

(b)           the calculations required to establish whether the Borrower is in compliance with Section 2.01(b) for the Relevant Vessel;

 

(c)           the date of such Borrowing (which shall be a Business Day);

 

(d)           the name of the Relevant Vessel being acquired on such date or which was previously acquired in connection with the Borrowing to be made on such date; and

 

(e)           the initial Interest Period to be applicable thereto in accordance with Section 2.07.

 

The Administrative Agent shall promptly (and in no event less than three (3) Business Days prior to the proposed Borrowing Date) give each Lender notice of such proposed Borrowing, of such Lender’s proportionate share thereof and of the other matters required by the immediately preceding sentence to be specified in each Notice of Borrowing.

 

 

from the date such corresponding amount was made available by the Administrative Agent to the Borrower until the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to (i) if recovered from such Lender, the overnight Federal Funds Rate and (ii) if recovered from the Borrower, the rate of interest applicable to the respective Borrowing, as determined pursuant to Section 2.06. If the full amount of the Loans is not borrowed on or prior to the Commitment Termination Date as a result of the non-consummation of one or more Collateral Vessel Acquisitions, the Administrative Agent shall return the remaining non-funded Loans received from each Lender pursuant to this Section 2.03 to such Lender within one Business Day after the Commitment Termination Date. For the avoidance of doubt, the Borrower shall be required to make payments pursuant to Sections 2.06 and 2.09 if one or more Borrowing Dates do not occur.

 

 

(b)           Each Note shall (i) be executed by the Borrower, (ii) be payable to such Lender or its registered assigns and be dated the applicable Borrowing Date, (iii) be in a stated principal amount equal to the outstanding amount of the Loans of such Lender and be payable in the outstanding principal amount of the Loans evidenced thereby, (iv) mature on the Maturity Date, (v) bear interest as provided in Section 2.06 in respect of the Loans evidenced thereby, (vi) be subject to voluntary prepayment as provided in Section 4.01, and mandatory repayment as provided in Section 4.02, and (vii) be entitled to the benefits of this Agreement and the other Credit Documents.

 

(c)           Each Lender will note on its internal records the amount of each Loan made by it and each payment in respect thereof and will, prior to any transfer of any of its Notes, endorse on the reverse side thereof the outstanding principal amount of the Loans evidenced thereby.  Failure to make any such notation or any error in any such notation or endorsement shall not affect the Borrower’s obligations in respect of such Loans.

 

(d)           Notwithstanding anything to the contrary contained above in this Section 2.04 or elsewhere in this Agreement, Notes shall be delivered only to Lenders that at any time specifically request the delivery of such Notes.  No failure of any Lender to request or obtain a Note evidencing its Loans to the Borrower shall affect or in any manner impair the obligations of the Borrower to pay the Loans (and all related Credit Document Obligations) incurred by the Borrower that would otherwise be evidenced thereby in accordance with the requirements of this Agreement, and shall not in any way affect the security or guaranties therefor provided pursuant to the Credit Documents.  Any Lender that does not have a Note evidencing its outstanding Loans shall in no event be required to make the notations on such Note otherwise described in preceding clause (b). At any time (including, without limitation, to replace any Note that has been destroyed or lost) when any Lender requests the delivery of a Note to evidence any of its Loans, the Borrower shall promptly execute and deliver to such Lender the requested Note in the appropriate amount or amounts to evidence such Loans; provided that, in the case of a substitute or replacement Note, the Borrower shall have received from such requesting Lender (i) an affidavit of loss or destruction and (ii) a customary lost/destroyed Note indemnity, in each case in form and substance reasonably acceptable to the Borrower and such requesting Lender, and duly executed by such requesting Lender.

 

 

understood that no Lender shall be responsible for any default by any other Lender of its obligation to make Loans or payments under Section 10.06 hereunder and that each Lender shall be obligated to make Loans provided to be made by it hereunder, regardless of the failure of any other Lender to make its Loans and payments hereunder.

 

 

(b)           If the Borrower fails to pay any amount payable by it under a Credit Document on its due date, interest shall accrue on the overdue amount (in the case of overdue interest to the extent permitted by law) from the due date up to the date of actual payment (both before and after judgment) at a rate which is, subject to paragraph (c) below, 2% plus the Interest Rate then applicable to a Loan. Any interest accruing under this Section 2.06(b) shall be immediately payable by the Borrower on demand by the Administrative Agent.

 

(c)           If any overdue amount consists of all or part of a Loan which became due on a day which was not the last day of an Interest Period relating to such Loan:

 

(i)            the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to that Loan; and

 

(ii)           the rate of interest applying to the overdue amount during that first Interest Period shall be 2% plus the Interest Rate which would have applied if the overdue amount had not become due.

 

Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.

 

(d)           Accrued and unpaid interest shall be payable (i) in arrears on the last day of each Interest Period applicable thereto and, in the case of an Interest Period in excess of three (3) months, on each date occurring at three (3) month intervals after the first day of such Interest Period, and (ii) on any repayment or prepayment (on the amount repaid or prepaid), at maturity (whether by acceleration or otherwise) and, after such maturity, on demand.

 

(e)           Upon each Interest Determination Date, the Administrative Agent shall determine the Eurodollar Rate for each Interest Period applicable to the Loans made or to be made pursuant to the applicable Borrowing and shall promptly notify the Borrower and the respective Lenders thereof.  Each such determination shall, absent manifest error, be final and conclusive and binding on all parties hereto.

 

 

(i)            all Loans comprising a Borrowing shall at all times have the same Interest Period;

 

(ii)           subject to clause (iii) below, each Interest Period for a Loan after the initial Interest Period with respect thereto shall commence on the day on which the immediately preceding Interest Period applicable thereto expires;

 

(iii)          if any Interest Period relating to a Loan begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period, such Interest Period shall end on the last Business Day of such calendar month;

 

(iv)         if any Interest Period would otherwise expire on a day which is not a Business Day, such Interest Period shall expire on the first succeeding Business Day; provided, however, that if any Interest Period for a Loan would otherwise expire on a day which is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the immediately preceding Business Day;

 

(v)           no Interest Period in respect of any Borrowing of Loans shall be selected which extends beyond the Maturity Date;

 

(vi)          any Interest Period commencing less than one month prior to the Maturity Date shall end on the Maturity Date;

 

(vii)         if an Event of Default has occurred and is continuing, unless the Required Lenders otherwise agree, the Interest Period shall be three (3) months; and

 

(viii)       no Interest Period shall be selected which extends beyond any date upon which a Scheduled Repayment will be required to be made under Section 4.02(a) if the aggregate principal amount of the Loans which have Interest Periods which will expire after such date will be in excess of the aggregate principal amount of the Loans then outstanding less the aggregate amount of such repayment.

 

If upon the expiration of any Interest Period applicable to a Borrowing of Loans, the Borrower has failed to elect a new Interest Period to be applicable to the Loan as provided above, the Borrower shall be deemed to have elected a three (3) month Interest Period to be applicable to the Loan effective as of the expiration date of such current Interest Period

 

 

(i)            at any time, that such Lender shall incur increased costs or reductions in the amounts received or receivable hereunder with respect to any Loan because of, without duplication, the introduction of or effectiveness of any Change in Law since the Closing Date in any applicable law or governmental rule, regulation, order, guideline, directive or request (whether or not having the force of law) concerning capital adequacy or otherwise or in the interpretation or administration thereof and including the introduction of any new law or governmental rule, regulation, order, guideline or request, such as, for example, but not limited to: (A) a change in the basis of taxation of payment to any Lender of the principal of or interest on such Loan or any other amounts payable hereunder (except for changes in the rate of Tax on, or determined by reference to, the net income or net profits of such Lender pursuant to the laws of

 

the jurisdiction in which such Lender or the entity controlling such Lender is organized or in which the principal office of such Lender or the entity controlling such Lender or such Lender’s applicable lending office is located or any subdivision thereof or therein), but without duplication of any amounts payable in respect of Taxes pursuant to Section 4.04, (B) a change in official reserve requirements but, in all events, excluding reserves required under Regulation D to the extent included in the computation of the Eurodollar Rate or (C) a change that will have the effect of increasing the amount of capital adequacy required or requested to be maintained by such Lender, or any corporation controlling such Lender, based on the existence of such Lender’s Commitments hereunder or its obligations hereunder; or

 

(ii)           at any time, that the making or continuance of any Loan has been made unlawful by any law or governmental rule, regulation or order;

 

then, and in any such event, such Lender shall promptly give notice (by telephone confirmed in writing) to the Borrower and, in the case of clause (ii) above, to the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each of the Lenders).  Thereafter (x) in the case of clause (i) above, the Borrower agrees (to the extent applicable), to pay to such Lender, upon its written demand therefor, such additional amounts as shall be required to compensate such Lender or such other corporation for the increased costs or reductions to such Lender or such other corporation and (y) in the case of clause (ii) above, the Borrower shall take one of the actions specified in Section 2.08(b) as promptly as possible and, in any event, within the time period required by law.  In determining such additional amounts, each Lender will act reasonably and in good faith and will use averaging and attribution methods which are reasonable; provided that such Lender’s determination of compensation owing under this Section 2.08(a) shall, absent manifest error (but subject to Section 2.10 (to the extent applicable)), be final and conclusive and binding on all the parties hereto.  Each Lender, upon determining that any additional amounts will be payable pursuant to this Section 2.08(a), will give prompt written notice thereof to the Borrower, which notice shall show in reasonable detail the basis for the calculation of such additional amounts; provided that, subject to the provisions of Section 2.10(b), the failure to give such notice shall not relieve the Borrower from its obligations hereunder.

 

(b)           At any time that any Loan is affected by the circumstances described in Section 2.08(a)(i), the Borrower may, and in the case of a Loan affected by the circumstances described in Section 2.08(a)(ii), the Borrower shall, either (x) if the affected Loan is then being made initially, cancel the respective Borrowing by giving the Administrative Agent telephonic notice (confirmed in writing) on the same date or the next Business Day that the Borrower was notified by the affected Lender or the Administrative Agent pursuant to Section 2.08(a)(i) or (ii) or (y) if the affected Loan is then outstanding, upon at least three (3) Business Days’ written notice to the Administrative Agent, in the case of any Loan, repay all outstanding Borrowings (within the time period required by the applicable law or governmental rule, governmental regulation or governmental order) which include such affected Loans in full in accordance with the applicable requirements of Section 4.02; provided that if more than one Lender is affected at any time in the same manner and to the same extent, then all affected Lenders must be treated the same pursuant to this Section 2.08(b).

 

(c)           If a Market Disruption Event occurs in relation to a Loan for any Interest Period, then the rate of interest on each Lender’s share of such Loan for the relevant Interest Period shall be the rate per annum which is the sum of:

 

(i)            the Applicable Margin; and

 

(ii)           the rate determined by each Lender and notified to the Administrative Agent, which expresses the actual cost to each such Lender of funding its participation in such Loan for a period equivalent to such Interest Period from whatever source it may reasonably select.

 

(d)           If a Market Disruption Event occurs and the Administrative Agent or the Borrower so require, the Administrative Agent and the Borrower shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest. Any alternative basis agreed pursuant to the immediately preceding sentence shall, with the prior consent of all the Lenders and the Borrower, be binding on all parties. If no agreement is reached pursuant to this clause (d), the rate provided for in clause (c) above shall apply for the entire Interest Period.

 

(e)           If any Reference Bank ceases to be a Lender under this Agreement, (x) it shall cease to be a Reference Bank and (y) the Administrative Agent shall, with the approval (which shall not be unreasonably withheld) of the Borrower, nominate as soon as reasonably practicable another Lender to be a Reference Bank in place of such Reference Bank.

 

(f)            The Administrative Agent may not disclose to any Lender any details of the rate notified to the Administrative Agent by any other Lender acting as a Reference Bank for the purposes of Section 2.08(c) or (d).

 

2.09 Compensation.  The Borrower agrees to compensate each Lender, upon its written request (which request shall set forth in reasonable detail the basis for requesting and the calculation of such compensation; provided that no Lender shall be required to disclose any information that would be confidential or price sensitive), for all reasonable and documented losses, expenses and liabilities (including, without limitation, any such loss, expense or liability incurred by reason of the liquidation or reemployment of deposits or other funds required by such Lender to fund its share of the Loans but excluding any loss of anticipated profits) which such Lender may sustain in respect of the Loans made to the Borrower: (i) if for any reason (other than a default by such Lender or the Administrative Agent) a Borrowing of Loans does not occur on a date specified therefor in a Notice of Borrowing (whether or not withdrawn by the Borrower or deemed withdrawn pursuant to Section 2.08(a)); (ii) if any prepayment or repayment (including any prepayment or repayment made pursuant to Section 2.08(a), Section 4.01 or Section 4.02 or as a result of an acceleration of the Loans pursuant to Section 9) of any of its share of the Loans, or assignment of its portion of the Loans pursuant to Section 2.11, occurs on a date which is not the last day of an Interest Period with respect thereto; (iii) if any prepayment of any of its share of the Loans is not made on any date specified in a notice of prepayment given by the Borrower; or (iv) as a consequence of any other Default or Event of Default arising as a result of the Borrower’s failure to repay the Loans or make payment on any Note held by such Lender when required by the terms of this Agreement.

 

 

(b)           Failure or delay on the part of any Lender to demand compensation pursuant to Sections 2.08, 2.10 or 4.04 of this Agreement shall not constitute a waiver of such Lender’s right to

 

demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs incurred or reductions suffered more than 180 days prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions, and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof). This Section 2.10(b) shall have no applicability to any Section of this Agreement other than said Sections 2.08, 2.09 and 4.04.

 

 

(i)            at the time of any replacement pursuant to this Section 2.11, the Replacement Lender shall enter into one or more Assignment and Assumption Agreements pursuant to Section 11.04(b) (and with all fees payable pursuant to said Section 11.04(b) to be paid by the Replacement Lender) pursuant to which the Replacement Lender shall acquire all of the Commitments and outstanding amount of the Loans of the Replaced Lender and, in connection therewith, shall pay to the Replaced Lender in respect thereof an amount equal to the sum (without duplication) of (x) an amount equal to the amount of principal of, and all accrued interest on, the outstanding Loans of the Replaced Lender and (y) an amount equal to all accrued, but unpaid, Commitment Commission owing to the Replaced Lender pursuant to Section 3.01;

 

(ii)           such assignment does not conflict with applicable law; and

 

(iii)          all obligations of the Borrower due and owing to the Replaced Lender at such time (other than those specifically described in clause (i) above in respect of which the assignment purchase price has been, or is concurrently being, paid) shall be paid in full to such Replaced Lender concurrently with such replacement.

 

Upon receipt by the Replaced Lender of all amounts required to be paid to it pursuant to this Section 2.11, the Administrative Agent shall be entitled (but not obligated) and is authorized (which authorization (x) is coupled with an interest and (y) shall only arise to the extent the Replaced Lender has not executed the Assignment and Assumption Agreement within 10 Business Days after written request therefor) to execute an Assignment and Assumption Agreement on behalf of such Replaced Lender, and any such Assignment and Assumption Agreement so executed by the Administrative Agent and the Replacement Lender shall be effective for purposes of this Section 2.11 and Section 11.04.  Upon the execution of the respective Assignment and Assumption Agreement, the payment of amounts referred to in clauses (i) and (ii) above and, if so requested by the Replacement Lender, delivery to (i) the Replacement Lender of the appropriate Note or Notes executed by the Borrower, the Replacement Lender shall become a Lender hereunder and the Replaced Lender shall cease to constitute a Lender hereunder, except with respect to indemnification provisions under this Agreement (including, without limitation, Sections 2.08, 2.09, 4.04, 11.01 and 11.06), which shall survive as to such Replaced Lender.

 

SECTION 3            Commitment Commission; Fees; Reductions of Commitment.

 

 

(b)           The Borrower shall pay (i) the fees set forth in the Fee Letters and (ii) to the Administrative Agent, for the Administrative Agent’s own account, such other fees as have been agreed to in writing by the Borrower and the Administrative Agent (the fees set forth in this Section 3.01(b), collectively, the “Fees”).

 

 

(a)           Upon at least three Business Days’ prior written notice to the Administrative Agent at its Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders), the Borrower shall have the right, at any time or from time to time, without premium or penalty, to terminate or reduce the Total Commitments, in whole or in part prior to the Commitment Termination Date, in integral multiples of $500,000 in the case of partial reductions to the Total Commitments; provided that, in each case, such reduction shall apply proportionately to permanently reduce the Commitment, as applicable, of each Lender.

 

(b)           In the event of certain refusals by a Lender as provided in Section 11.13(b) to consent to certain proposed changes, waivers, discharges or terminations with respect to this Agreement which have been approved by the Required Lenders, the Borrower may, subject to the requirements of said Section 11.13(b) and upon five Business Days’ written notice to the Administrative Agent at its Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders), terminate all of the Commitments (if any) of such Lender so long as all Loans, together with accrued and unpaid interest, Commitment Commission and all other amounts, owing to such Lender are repaid concurrently with the effectiveness of such termination (at which time Schedule I hereto shall be deemed modified to reflect such changed amounts), and at such time such Lender shall no longer constitute a “Lender” for purposes of this Agreement, except with respect to indemnification provisions under this Agreement (including, without limitation, Sections 2.09, 2.10, 4.04, 11.01, 11.17 and 11.18), which shall survive as to such repaid Lender.

 

 

(a)          The Total Commitments (and the Commitments of each Lender) shall terminate in their entirety on the earlier of (i) the last Borrowing Date after giving effect to a Borrowing of Loans on such date which results in the Total Commitments being fully utilized and (ii) the Commitment Termination Date.

 

(b)           In addition to any other mandatory commitment reductions pursuant to this Section 3.03, on each Borrowing Date, the Total Commitments (and the Commitments of each Lender) shall be permanently reduced by the aggregate principal amount of the Loans made on such Borrowing Date.

 

(c)           Each reduction to, or termination of, the Total Commitments pursuant to this Section 3.03 shall be applied to proportionately reduce or terminate the Commitments of each Lender with such Commitments.

 

 

 

(i)            the Borrower shall give the Administrative Agent, prior to 10:00 A.M. (New York time) at its Notice Office, at least three (3) Business Days’ prior written notice (or telephonic notice promptly confirmed in writing) of its intent to prepay the Loans, which notice shall specify the amount of such prepayment and the specific Borrowing or Borrowings pursuant to which such Loans were made, which notice the Administrative Agent shall promptly transmit to each of the Lenders;

 

(ii) each partial prepayment of the Loans pursuant to this Section 4.01 shall be in an aggregate principal amount of at least $1,000,000 (or such lesser amount as is acceptable to the Administrative Agent in any given case) or integral multiples of $1,000,000;

 

(iii) at the time of any prepayment of the Loans pursuant to this Section 4.01 which occurs on any date other than the last day of the Interest Period applicable thereto, the Borrower shall pay the amounts required pursuant to Section 2.09;

 

(iv) except as expressly provided in clause (v) below, each prepayment pursuant to this Section 4.01 in respect of any Loans made pursuant to a Borrowing shall be applied to reduce future Scheduled Repayments for each Payment Date (including the final installment amount due on the Maturity Date) in accordance with the remaining outstanding principal amounts of such installments in direct order of maturity; and

 

(v) in the event of a refusal by a Lender to consent to certain proposed changes, waivers, discharges or terminations with respect to this Agreement which have been approved by the Required Lenders as (and to the extent) provided in Section 11.13(b), the Borrower may, upon five (5) Business Days’ prior written notice to the Administrative Agent at the Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders) repay all Loans, together with accrued and unpaid interest, Fees, and other amounts owing to such Lender in accordance with, and subject to the requirements of, said Section 11.13(b) so long as (I) all Commitments of such Lender are terminated concurrently with such repayment pursuant to Section 4.02(f) (at which time Schedule I hereto shall be deemed modified to reflect the changed Commitments) and (II) the consents, if any, required under Section 11.13(b) in connection with the repayment pursuant to this clause (a) have been obtained except that to the extent such Lender has been replaced by a Replacement Lender, the Total Commitments shall not be reduced.

 

(b)           Loans prepaid pursuant to this Section 4.01 may not be reborrowed.

 

 

(a)           In addition to any other mandatory repayments pursuant to this Section 4.02, the Borrower shall be required to repay the Loans on each Payment Date (including for the avoidance of doubt, the Maturity Date) in an amount equal to the Scheduled Repayment for such Payment Date, as set

 

 

(b)           (i) In addition to any other mandatory repayments required pursuant to this Section 4.02, but without duplication, on (x) the date of any Collateral Disposition (other than a Collateral Disposition constituting an Event of Loss) involving a Collateral Vessel (other than any Additional Vessels) and (y) the earlier of (I) the date which is 120 days following any Collateral Disposition constituting an Event of Loss involving a Collateral Vessel (other than an Additional Vessel) and (II) the date of receipt by the Borrower, any of its Subsidiaries or the Administrative Agent of the insurance proceeds relating to such Event of Loss (the date described in (y) above, the “Collateral Disposition Prepayment Date”), the Borrower shall repay the Loan in an amount equal to the Collateral Disposition Prepayment Amount.

 

(ii)           Notwithstanding anything to the contrary set forth in clause (b)(i), above, no repayment pursuant to Section 4.02(b)(i)(y) will be required to be made if all of the following conditions are met:

 

(1)           the Collateral Disposition Prepayment Amount shall have been deposited as cash collateral with the Security Agent on the Collateral Disposition Prepayment Date in an account at the Administrative Agent (each such account a “Cash Collateral Account”) pursuant to an account pledge agreement on substantially the same terms as those set forth in the Account Security Agreements, but pursuant to which only the Administrative Agent is entitled to give instructions on such Cash Collateral Account;

 

(2)           within 120 days after the Collateral Disposition Prepayment Date (such 120-day period, the “Reinvestment Period”), one or more Replacement Vessels meeting the requirements of the definition thereof have become Collateral Vessel(s) under this Agreement and all Collateral and Guaranty Requirements in connection with any such Replacement Vessel and the Subsidiary of the Borrower which owns such Replacement Vessel have been satisfied;

 

(3)           the Appraised Value of the Replacement Vessel(s) shall be equal to or higher than the Appraised Value of the Collateral Vessel(s) which is (or are) the subject of the Collateral Disposition; and

 

(4)           the Borrower is in pro forma compliance with the Collateral Maintenance Test after giving effect to any Replacement Vessel becoming a Collateral Vessel.

 

(iii)          In connection with any Replacement Vessel becoming a Collateral Vessel as described in Section 4.02(b)(ii)(2) above, the Borrower shall be entitled to use the funds on deposit in the Cash Collateral Account to purchase such Replacement Vessel or to reimburse itself for (or refinance any indebtedness relating to) any previously acquired Replacement Vessel.  The funds will be released to the Borrower (1) in an amount equal to the lesser of (x) the amount then on deposit in the Cash Collateral Account and (y) the Appraised Value of such Replacement Vessel multiplied by the ratio of the Aggregate Appraised Value of the Collateral Vessels immediately prior to the Collateral Disposition to the outstanding Loan as of the Collateral Disposition Prepayment Date as reduced by any repayments of the Loan that have occurred after such Collateral Disposition Prepayment Date, (2) no earlier than the date on which such Replacement Vessel is to become a Collateral Vessel and all Collateral and Guaranty Requirements in connection with any such Replacement Vessel and the Subsidiary of the Borrower which owns such Replacement Vessel are to be satisfied and (3) otherwise pursuant to a mechanic reasonably acceptable to the Administrative Agent.

 

(iv)          If all or any portion of such Collateral Disposition Prepayment Amount is not released to the Borrower pursuant to clause (iii) above within the Reinvestment Period, the amount in the Cash Collateral Account shall be applied on the first Business Day following the Reinvestment Period as a mandatory prepayment pursuant to this Section 4.02(b).

 

(v)          Schedule X shall be amended by the Administrative Agent as of the last day of the Reinvestment Period to reflect a recalculated Amortization Amount based on the outstanding Loan as of such date and Collateral Vessels owned by the Obligors as of such date.

 

(vi)         For the avoidance of doubt, and without duplication of any repayment pursuant to Section 4.02(c), on any date on which the Borrower is required to make a repayment in connection with an Collateral Disposition under this clause (b), if after giving effect to such repayment the Borrower is or would not be in pro forma compliance with the Financial Covenant set forth in Section 8.07(b) (based on the most recent Appraisals delivered to the Administrative Agent under Section 5.02(e) or 7.01(d)), the Borrower shall be required to post Additional Collateral or make an additional repayment in an amount sufficient to cure such non-compliance in accordance with the provisions of Section 8.07(d).

 

(c)           In addition to any other mandatory repayments required pursuant to this Section 4.02, upon the occurrence of an Event of Default resulting from a failure by the Borrower to provide Additional Collateral or a repayment of the Loans to cure a breach of Section 8.07(d), the Borrower shall be required to immediately repay the Loans in an amount sufficient to comply with Section 8.07(d); provided that it is understood and agreed that the requirement to repay Loans under this Section 4.02(c) shall not be deemed to be a waiver of any other right or remedy that any Secured Creditor may have as a result of an Event of Default resulting from a breach of Section 8.07(d).

 

 

(d)           If, in any applicable jurisdiction, it becomes impossible or unlawful for any Lender or its affiliates to perform any of its obligations as contemplated in relation to the Credit Facility or to fund or maintain its participation in any Loans, such Lender’s Unutilized Commitments shall be immediately reduced and cancelled and the Loans attributable to such Lender shall be immediately due and payable.

 

(e)           All repayments of Loans pursuant to Sections 4.01 and 4.02 (other than 4.02(d)) shall be applied to the repayment of the portion of the Loans held by each Lender in accordance with its Pro Rata Share.

 

(f)           The amount of all repayments of the Loan pursuant to Sections 4.02(b) and 4.02(c) shall be applied to reduce the then remaining Scheduled Repayments (including the Scheduled Repayment due on the Maturity Date) on a pro rata basis:

 

(g)           With respect to each repayment of Loans under Section 4.01 or required by this Section 4.02, the Borrower may designate the specific Borrowing or Borrowings pursuant to which such Loans were made; provided that (i) each Borrowing of Loans with Interest Periods ending on such date of required repayment shall be paid in full prior to the payment of any other Borrowing of Loans and (ii) each repayment of any Loans comprising a Borrowing shall be applied pro rata among such Borrowing.  In the absence of a designation by the Borrower as described in the preceding sentence, the Administrative Agent shall, subject to the preceding provisions of this clause (g), make such designation in its sole reasonable discretion with a view, but no obligation, to minimize breakage costs owing pursuant to Section 2.09.

 

(h)           Notwithstanding anything to the contrary contained elsewhere in this Agreement, all of the outstanding Loans shall be repaid in full on the Maturity Date.

 

(i)            Repayments of Loans pursuant to Section 4.01 and this Section 4.02 may not be reborrowed.

 

 

 

(i)            the applicable Obligor shall be entitled to make such deduction or withholding;

 

(ii)           the applicable Obligor shall pay the full amount deducted or withheld to the relevant Governmental Authority; and

 

(iii)          in the case of any Indemnified Taxes, the applicable Obligor agrees to pay the full amount of such Indemnified Taxes and Other Taxes, and such additional amounts as may be necessary so that, after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section), the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

 

If any amounts are payable in respect of Indemnified Taxes pursuant to the preceding sentence, the Borrower agrees to reimburse each Lender, within 10 days after the written request of such Lender, for Taxes imposed on or measured by the net income of such Lender pursuant to the laws of the jurisdiction in which such Lender is organized or in which the principal office or applicable lending office of such Lender is located or under the laws of any political subdivision or Governmental Authority of any such jurisdiction in which such Lender is organized or in which the principal office or applicable lending office of such Lender is located and for any withholding of Taxes as such Lender shall determine are payable by, or withheld from, such Lender, in respect of such amounts so paid to or on behalf of such Lender pursuant to the preceding sentence and in respect of any amounts paid to or on behalf of such Lender pursuant to this sentence, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  The Borrower shall indemnify each Recipient, within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.  The Borrower will furnish to the Administrative Agent within 45 days after the date of payment of any Indemnified Taxes is due pursuant to applicable law certified copies of Tax receipts evidencing such payment by the Borrower.

 

(b)           Without duplicating the payments under clause (a) above, the Borrower agrees to timely pay to the relevant Governmental Authority any and all present or future stamp, court or documentary Taxes and any other excise (in the nature of a documentary or similar Tax), property, intangible, filing or mortgage recording Taxes or charges or similar levies imposed by any Governmental Authority which arise from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Note excluding (i) such amounts imposed in connection with an Assignment and Assumption Agreement, grant of a participation, transfer or assignment to or designation of a new applicable lending office or other office for receiving payments under any Note, except to the extent that any such change is requested in writing by the Borrower and (ii) the registration or presentation of a Note that is mandatorily required by law (all such non-excluded Taxes described in this Section 4.04(b) being referred to as “Other Taxes”).

 

(c)           Any Recipient that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Credit Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Recipient, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Recipient is subject to backup withholding or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation shall not be required if in the Recipient’s reasonable judgment such completion, execution or submission would subject such Recipient to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Recipient.

 

(d)           If the Administrative Agent or a Lender determines in its sole discretion that it has actually received or realized a refund of any Indemnified Taxes as to which it has been indemnified by an Obligor or with respect to which such Obligor has paid additional amounts pursuant to Section 4.04(a), it shall pay over such refund to such Obligor (but only to the extent of indemnity payments made, or additional amounts paid, by such Obligor under Section 4.04(a) with respect to the Indemnified Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender (including any Taxes imposed with respect to such refund) as is determined in the sole discretion of the Administrative Agent or Lender in good faith, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  In the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority, then such Obligor, upon the written request of the Administrative Agent or such Lender, agrees to repay within 30 days the amount paid over to such Obligor (without any penalties, interest or other charges other than any penalties, interest or charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender.  Nothing in this Section 4.04(d) shall require a Lender to disclose any confidential information (including, without limitation, its Tax returns or its calculations).

 

(e)           If a payment made to a Lender under any Note would be subject to withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code or an intergovernmental agreement) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative

 

Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause (e), if any applicable law requires the deduction or withholding of any Taxes from or in respect of any sum payable upon the Note, including any Taxes imposed under FATCA, the Administrative Agent shall be entitled to make deductions or withholding. Solely for purposes of this clause (e), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

(f)            Each Lender shall severally indemnify the Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 11.04(a) relating to the maintenance of a Participant Register and (iii) any Taxes excluded in Section 4.04(a) attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Note, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Note or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this clause (f).

 

(g)           Each party’s obligations under this Section 4.04 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Credit Document.

 

 

(i)            first, to the payment of all amounts owing the Security Agent of the type described in clauses (c) and (d) of the definition of “Secured Obligations”;

 

(ii)           second, to the extent proceeds remain after the application pursuant to the preceding clause (i), each Lender Creditor’s and Other Creditor’s Pro Rata Share of:

 

 

(y)           an amount equal to outstanding Other Obligations under Secured Hedging Agreements to which an Other Creditor is a party shall be paid to the Other Creditors as provided in Section 4.05(d) hereof, with each Other Creditor receiving an amount equal to outstanding Other Obligations, or, if the proceeds are insufficient to pay

 

in full all such Other Obligations, its Pro Rata Share of the amount remaining to be distributed;

 

(iii)          third, to the extent proceeds remain after the application pursuant to the preceding clauses (i) and (ii), inclusive, and following the termination of this Agreement, the Credit Documents and the Secured Hedging Agreements in accordance with their terms, to the relevant Obligor or to whomever may be lawfully entitled to receive such surplus.

 

(b)           For purposes of this Agreement, “Pro Rata Share” shall mean, when calculating a Secured Creditor’s portion of any distribution or amount, that amount (expressed as a percentage) equal to a fraction the numerator of which is the then unpaid amount of such Secured Creditor’s Credit Document Obligations or applicable Other Obligations, as the case may be, and the denominator of which is the then outstanding amount of all Credit Document Obligations or applicable Other Obligations, as the case may be.

 

(c)           When payments to Secured Creditors are based upon their respective Pro Rata Shares, the amounts received by such Secured Creditors hereunder shall be applied (for purposes of making determinations under this Section 4.05 only) (i) first, to their Credit Document Obligations, and (ii) second, to their Other Obligations under Secured Hedging Agreements.  If any payment to any Secured Creditor of its Pro Rata Share of any distribution would result in overpayment to such Secured Creditor, such excess amount shall instead be distributed in respect of the unpaid Credit Document Obligations or applicable Other Obligations, as the case may be, of the other Secured Creditors, with each Secured Creditor whose Credit Document Obligations or applicable Other Obligations, as the case may be, have not been paid in full to receive an amount equal to such excess amount multiplied by a fraction the numerator of which is the unpaid Credit Document Obligations or applicable Other Obligations, as the case may be, of such Secured Creditor and the denominator of which is the unpaid Credit Document Obligations or applicable Other Obligations, as the case may be, of all Secured Creditors entitled to such distribution.

 

(d)           All payments required to be made hereunder shall be made (x) if to the Lender Creditors, to the Administrative Agent under this Agreement for the account of the Lender Creditors and (y) if to the Other Creditors, to the trustee, paying agent or other similar representative (each a “Representative”) for the Other Creditors or, in the absence of such a Representative, directly to the Other Creditors.

 

(e)           For purposes of applying payments received in accordance with this Section 4.05, the Security Agent shall be entitled to rely upon (i) the Administrative Agent under this Agreement and (ii) the Representative for the Other Creditors or, in the absence of such a Representative, upon the Other Creditors for a determination (which the Administrative Agent, each Representative for any Other Creditors and the Secured Creditors agree (or shall agree) to provide upon request of the Security Agent) of the outstanding Credit Document Obligations and applicable Other Obligations owed to the Lender Creditors or the Other Creditors, as the case may be.  Unless it has received a notification in writing from the Borrower and the relevant Other Creditor designating the Secured Hedging Agreements of such Other Creditor as a “Secured Hedging Agreement” hereunder, the Security Agent, shall be entitled to assume that no Secured Hedging Agreements are in existence.

 

(f)            It is understood and agreed that each Obligor shall remain jointly and severally liable to the extent of any deficiency between the amount of the proceeds of the Collateral pledged and Liens granted by it under and pursuant to the Security Documents and the aggregate amount of the Secured Obligations of such Obligor.

 

SECTION 5            Conditions Precedent.

 

 

(a)           Credit Agreement; Fee Letters.  The Borrower, the Administrative Agent and each of the Lenders who are initially party hereto shall have signed a counterpart of (i) this Agreement and (ii) the Fee Letters (in each case, whether the same or different counterparts) and shall have delivered the same to the Administrative Agent and this Agreement and the Fee Letters shall be in full force and effect and consummated in accordance with the documentation and applicable laws.

 

(b)           PATRIOT Act; Beneficial Ownership Certification. (i) The Obligors shall have provided, or procured the supply of, the “know your customer” information required pursuant to the PATRIOT Act, to each of the Lenders and the Administrative Agent in connection with their respective internal compliance regulations thereunder or other information requested by any Lender or the Administrative Agent to satisfy related checks under all applicable laws and regulations pursuant to the transactions contemplated hereby, in each case to the extent requested by any Lender or the Administrative Agent not later than three (3) days prior to the Closing Date.

 

(ii)           The Borrower shall have delivered a Beneficial Ownership Certification to the Administrative Agent not later than three (3) days prior to the Closing Date

 

(c)           Security Documents. The Security Agent and each relevant Obligor shall have signed a counterpart of (i) the Guaranty, (ii) the Pledge Agreement and (iii) the Account Security Agreements such that the Lenders have a first-priority perfected security interest in the property purported to be covered thereby, with such exceptions as are reasonably acceptable to the Required Lenders.

 

(d)           Officer’s Certificates.  The Administrative Agent shall have received a certificate in form and substance reasonably acceptable to the Administrative Agent signed by an Authorized Officer of the Borrower and each Subsidiary Guarantor, with appropriate insertions, together with copies of the Organizational Documents of the Borrower and each Subsidiary Guarantor and the resolutions of the Borrower and each Subsidiary Guarantor referred to in such certificate authorizing the consummation of the Transaction and certifying that the conditions set forth in Sections 5.01(e), (f), (i), (j) and (k) are satisfied (to the extent that, in each case, such conditions are not required to be acceptable (reasonably or otherwise) to the Administrative Agent).

 

(e)           Material Adverse Effect.  Since December 31, 2017, nothing shall have occurred (and neither the Administrative Agent nor any of the Lenders shall have become aware of any condition or circumstance not previously known to it or them) which the Administrative Agent or the Required Lenders shall determine has had, or could reasonably be expected to have, a Material Adverse Effect.

 

(f)            Litigation.  On and as of the Closing Date, no litigation by any entity (private or governmental) shall be pending or threatened with respect to any Obligor or any of its Subsidiaries which the Administrative Agent or the Required Lenders shall determine has had, or could reasonably be expected to have, a Material Adverse Effect..

 

(g)           Legal Opinions.  The Administrative Agent shall have received, on behalf of itself and the Lenders, the following legal opinions:

 

(i)            special New York counsel to the Borrower and the Obligors (which shall be Kramer Levin Naftalis & Frankel LLP or another New York law firm reasonably

 

acceptable to the Administrative Agent), an opinion addressed to the Administrative Agent and each of the Lenders and dated as of the Closing Date,

 

(ii)           special Republic of the Marshall Islands counsel to each of the Obligors (which shall be Reeder & Simpson, P.C. or another law firm qualified to render an opinion as to the Republic of the Marshall Islands law reasonably acceptable to the Administrative Agent), an opinion addressed to the Administrative Agent and each of the Lenders and dated as of the Closing Date, and

 

(iii)          special French counsel to the Administrative Agent and Security Agent (which shall be White & Case LLP or another law firm qualified to render an opinion as to French law reasonably acceptable to the Administrative Agent), an opinion addressed to the Administrative Agent, Security Agent and each of the Lenders with respect to the Account Security Agreements and dated as of the Closing Date.

 

in each case which shall be in form and substance reasonably acceptable to the Lenders;

 

(h)          Corporate Documentation.  The Administrative Agent shall have received copies of the Organizational Documents of each Subsidiary Guarantor. To the extent not previously delivered, the Administrative Agent shall have received (i) a certificate, dated the Closing Date and reasonably acceptable to the Administrative Agent, signed by an Authorized Officer of each Obligor with appropriate insertions, together with copies of the Organizational Documents of such Obligor and the resolutions of such Obligor referred to in such certificate authorizing the consummation of the Transaction and (ii) copies of governmental approvals (if any) and good standing certificates which the Administrative Agent may have reasonably requested in connection therewith.

 

(i)            Approvals.  On and as of the Closing Date, all necessary governmental (domestic and foreign) and third party approvals and/or consents in connection with the Transaction, the Loans, and the granting of Liens under the Credit Documents shall have been obtained and remain in effect, and all applicable waiting periods with respect thereto shall have expired without any action being taken by any competent authority which, in the reasonable judgment of the Administrative Agent, restrains, prevents or imposes materially adverse conditions upon the consummation of the Transaction, the making of the Loans and the performance by the Obligors of the Credit Documents to be entered into on the Closing Date. In addition, there shall not exist any judgment, order, injunction or other restraint issued or filed or a hearing seeking injunctive relief or other restraint pending or notified prohibiting or imposing materially adverse conditions upon the consummation of the Transaction, the making of the Loans or the performance by the Obligors of the Credit Documents.

 

(j)            No Default or Event of Default; Representations and Warranties. On and as of the Closing Date, (i) no Default or Event of Default has occurred and is continuing and (ii) all representations and warranties contained herein or in any other Credit Document shall be true and correct in all material respects (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date).

 

(k)           No Conflicts.  After giving effect to the consummation of the Transaction and the other transactions contemplated hereby, there shall be no conflict with, or default under any material agreement to which the Borrower or any Subsidiary Guarantor is a party.

 

(l)            Fees.  All fees and all other reasonable fees and documented out-of-pocket costs and expenses (including, without limitation, the reasonable legal fees and expenses of White & Case LLP

 

and other local counsel to the Administrative Agent) and other compensation due and payable on or prior to the Closing Date, in each case, payable to the Administrative Agent, the Security Agent, the Mandated Lead Arrangers and the Lenders in respect of the transactions contemplated by this Agreement to the extent reasonably invoiced at least two (2) Business Days prior to the Closing Date.

 

 

(a)           Closing Date.  On or prior to each Borrowing Date, (i) the Closing Date shall have occurred and (ii) there shall have been delivered to the Administrative Agent for the account of each of the Lenders that has requested same the appropriate Note executed by the Borrower in accordance with Section 2.04.

 

(b)           Delivery of Collateral Vessel. Each Collateral Vessel Owner shall have received or shall receive substantially simultaneously with funding of the Loans with respect to the relevant Collateral Vessel, title to the relevant Collateral Vessel, and such Collateral Vessel Owner shall at such time be the record and beneficial owner of such Collateral Vessel free and clear of all liens other than the Permitted Liens.

 

(c)            Borrowing Notice.  The Administrative Agent shall have received a Notice of Borrowing as required by Section 2.02.

 

(d)           Officer’s Certificate. The Administrative Agent shall have received a certificate from an Authorized Officer of the Borrower certifying that the conditions set forth in Sections 5.02(f), (h), (i), (j), (k), and (l) are satisfied (to the extent that, in each case, such conditions are not required to be acceptable (reasonably or otherwise) to the Administrative Agent).

 

(e)           Appraisals. The Administrative Agent shall have received Appraisals not older than sixty (60) days prior to each Borrowing Date from two Approved Appraisers in acceptable scope, form and substance, stating the then current fair market value of the relevant Collateral Vessel.

 

(f)            Collateral and Guaranty Requirements.  On or prior to each Borrowing Date, the Collateral and Guaranty Requirements with respect to each Collateral Vessel being financed on such Borrowing Date shall be satisfied or the Administrative Agent shall have waived such requirements (other than the Specified Requirements) and/or conditioned such waiver on the satisfaction of such requirements within a specified period of time.

 

(g)           Solvency Certificate.  The Borrower shall cause to be delivered to the Administrative Agent a solvency certificate from an Authorized Officer of the Borrower, substantially in the form of Exhibit L, which shall be addressed to the Administrative Agent and dated as of the applicable Borrowing Date, setting forth the conclusion that, after giving effect to the Transaction and the incurrence of all the financings contemplated hereby, each Obligor individually (after giving effect to rights of contribution and subrogation) and the Borrower and its Subsidiaries taken as a whole, are not insolvent and will not be rendered insolvent by the incurrence of such indebtedness, and will not be left with unreasonably small capital with which to engage in its business and will not have incurred debts beyond its ability to pay such debts as they become due.

 

(h)           Outstanding Indebtedness.  On each Borrowing Date, after giving effect to the consummation of the Transactions, the Borrower and its Subsidiaries shall have no outstanding Financial

 

Indebtedness or Contingent Obligations except for those arising under the Credit Documents and those set forth on Schedule VIII.

 

(i)            No Conflicts. On each Borrowing Date, after giving effect to the consummation of the Transaction, the making of the Loans and the performance by the Obligors of the Credit Documents, the financings incurred in connection therewith and the other transactions contemplated hereby, there shall be no conflict with, or default under any material agreement to which the Borrower or any Subsidiary Guarantor is a party as a result thereof.

 

(j)            Approvals. On each Borrowing Date, there shall not exist any judgment, order, injunction or other restraint issued or filed or a hearing seeking injunctive relief or other restraint pending or notified prohibiting or imposing materially adverse conditions upon the making of the Loans or the performance by the Obligors of the Credit Documents.

 

(k)           Representations and Warranties. Before and after giving effect to the Loans being incurred on each Borrowing Date, all representations and warranties contained herein or in any other Credit Document shall be true and correct in all material respects both before and after giving effect to such Loans with the same effect as though such representations and warranties had been made on the date of such Loans (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date).

 

(l)            No Default or Event of Default. No Default or Event of Default shall have occurred and be continuing, or would result from the Loans being incurred on each Borrowing Date.

 

Notwithstanding anything to the contrary in this Section 5.02, Loans on any Borrowing Date may be borrowed before the applicable conditions set forth above in Section 5.02 are met; provided that:

 

(i)             a Borrowing Date may not be more than five Business Days prior to the scheduled delivery date of the relevant Collateral Vessel; and

 

(ii)            on a Borrowing Date, the Administrative Agent shall (A) preposition the Loans with respect to such Borrowing Date at a bank or other financial institution (the “Seller’s Bank”) or other independent third party escrow agent (an “Escrow Agent”), in each case, satisfactory to the Administrative Agent, which funds shall be held at the Seller’s Bank (or, as the case may be, the Escrow Agent)  in the name and under the sole control of the Administrative Agent or an Affiliate thereof and (B) issue a SWIFT MT 199 or similar communication authorizing the release of such funds by the Seller’s Bank on the relevant delivery date in accordance with the release mechanism agreed between the Administrative Agent, the Borrower and the Seller’s Bank in such SWIFT MT 199 (or similar communication);

 

provided that if the delivery of the relevant Collateral Vessel does not occur within five Business Days after the scheduled delivery date, the funds held at the Seller’s Bank (or, as the case may be, the Escrow Agent)  shall be returned to the Administrative Agent for further distribution to the Lenders.

 

For the avoidance of doubt:

 

(A)          all interest and fees on the Loans shall accrue from the date such Loan is prepositioned at the Seller’s Bank;

 

(B)          the Administrative Agent and the Lenders suspend satisfaction of the conditions precedent set forth in clauses (viii)(b), (c), (d) and (h) of the definition of “Collateral and Guarantee

 

Requirements” solely for the time period on and between the relevant Borrowing Date and (I) the relevant delivery date with respect to clauses (viii)(b), (c) and (d) and (II) within 5 days of the relevant delivery date with respect to clause (viii)(h);

 

(C)          if the Collateral Vessel is not delivered within the time prescribed and the proceeds of the Loans are returned to the Administrative Agent for distribution to the Lenders, (i) the Borrower shall pay all accrued interest and fees in respect of such returned proceeds on the date such proceeds are returned to the Administrative Agent and (ii) the relevant available Commitments will be increased by an amount equal to the aggregate principal amount of the Loan proceeds so returned; and

 

(D)          if the Loans are converted into a currency other than Dollars for deposit with the Seller’s Bank and the relevant Collateral Vessel is not delivered within the time prescribed and the proceeds of the Loans are returned to the Administrative Agent for further distribution to the Lenders, the Borrower shall pay any and all fees, charges and expenses arising from such conversion into an alternative currency and any fees, charges, expenses and shortfalls arising from the conversion of such proceeds back into Dollars.

 

The acceptance of the benefits of each Loan shall constitute a representation and warranty by the Borrower to the Administrative Agent and each of the Lenders that all of the applicable conditions specified in this Section 5 and applicable to such Borrowing have been satisfied or waived as of that time.  All of the applicable Notes, certificates, legal opinions and other documents and papers referred to in Section 5 (including by reference to the Collateral and Guaranty Requirements), unless otherwise specified, shall be delivered to the Administrative Agent at the Notice Office for the account of each of the Lenders.

 

SECTION 6            Representations and Warranties.  In order to induce the Lenders to enter into this Agreement and to make the Loans, the Borrower makes the following representations and warranties, after giving effect to the Transaction, all of which shall survive the execution and delivery of this Agreement and the Notes and the making of the Loans, with the borrowing of each Loan on or after the Closing Date being deemed to constitute a representation and warranty that the matters specified in this Section 6 are true and correct in all material respects on and as of the Closing Date and on each Borrowing Date (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date):

 

 

 

 

 

(a)           Each Obligor has duly executed and delivered each of the Credit Documents to which it is party, and each of such Credit Documents constitutes the legal, valid and binding obligation of such Obligor enforceable against such Obligor in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law).

 

(b)           After the execution and delivery thereof and upon the taking of the actions mentioned in the immediately succeeding sentence, each of the Security Documents creates in favor of the Security Agent for the benefit of the Secured Creditors a legal, valid and enforceable fully perfected first priority security interest in and Lien on all right, title and interest of the Obligors party thereto in the Collateral described therein, subject only to Permitted Liens.  Subject to Sections 5.02(f) and 6.06, no filings or recordings are required in order to perfect the security interests created under any Security Document or to ensure the legality, validity, enforceability or admissibility in evidence of any Credit Document; except for filings or recordings which shall have been made on or prior to each Borrowing Date.

 

(c)           Each of the Credit Documents is or, when executed will be, in proper legal form under the laws of the Republic of the Marshall Islands and the applicable Acceptable Flag Jurisdiction for the enforcement thereof under such laws, subject only to such matters which may affect enforceability arising under the law of the State of New York.  To ensure the legality, validity, enforceability or admissibility in evidence of each such Credit Document in the Republic of the Marshall Islands and the applicable Acceptable Flag Jurisdiction, it is not necessary that any Credit Document or any other document be filed or recorded with any court or other authority in the applicable Acceptable Flag Jurisdiction, except as have been made, or will be made, on or prior to each Borrowing Date.

 

(d)           None of the Obligors has a place of business in any jurisdiction which requires any of the Security Documents to be filed or registered in that jurisdiction to ensure the validity of the Security Documents to which it is a party unless all such filings and registrations have been made or will be made on or prior to each Borrowing Date.

 

 

 

(a)           No order, consent, approval, license, authorization or validation of, or filing, recording or registration with or exemption by, any Governmental Authority or public body, or any subdivision thereof, is required to authorize, or is required in connection with, (i) the execution, delivery and performance by any Obligor of any Credit Document to which it is a party or (ii) the legality, validity, binding effect or enforceability of any Credit Document to which it is a party, in each case, except (x) as

 

have been obtained or made or (y) filings or other requisite actions necessary to perfect or establish the priority of the Liens created under the Security Documents.

 

(b)           No fees or Taxes, including, without limitation, stamp, transaction, registration or similar Taxes, are required to be paid to ensure the legality, validity, or enforceability of this Agreement or any of the other Credit Documents other than recording and filing fees and/or Taxes which have been, or will be, paid as and to the extent due.  Under the laws of the Republic of the Marshall Islands, the choice of the laws of the State of New York as set forth in the Credit Documents which are stated to be governed by the laws of the State of New York is a valid choice of law, and the irrevocable submission by each Obligor to jurisdiction and consent to service of process and, where necessary, appointment by such Obligor of an agent for service of process, in each case as set forth in such Credit Documents, is legal, valid, binding and effective.

 

 

(a)           (i) The audited consolidated balance sheet of the Borrower and its Subsidiaries at December 31, 2017 and the related consolidated statements of income and cash flows and changes in shareholders’ equity of the Borrower and its Subsidiaries for the fiscal year ended on December 31, 2017 in each case furnished to the Lenders prior to the Closing Date, present fairly in all material respects the consolidated financial position of the Borrower and its Subsidiaries at the date of said financial statements and the results for the respective periods covered thereby and (ii) the unaudited consolidated balance sheet of the Borrower and its Subsidiaries at June 30, 2018 and the related consolidated statements of income and cash flows and changes in shareholders’ equity of the Borrower and its Subsidiaries for the three-month period ended on such date, furnished to the Lenders prior to the Closing Date, present fairly in all material respects the consolidated financial condition of the Borrower and its Subsidiaries at the date of said financial statements and the results for the period covered thereby, subject to normal year-end adjustments.  All such financial statements have been prepared in accordance with GAAP consistently applied except to the extent provided in the notes to said financial statements and subject, in the case of the unaudited financial statements, to normal year-end audit adjustments and the absence of footnotes.

 

(b)           All financial statements provided pursuant to Section 7.01(a) and Section 7.01(b) have been prepared in accordance with GAAP consistently applied except to the extent provided in the notes to said financial statements and subject, in the case of the unaudited financial statements, to normal year-end audit adjustments and the absence of footnotes.

 

(c)           Except as fully disclosed in the balance sheets delivered pursuant to Section 6.07(a) or (b), there were as of the date of delivery of such balance sheets no liabilities or obligations with respect to the Borrower or any of its Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether or not due) which, either individually or in the aggregate, would be materially adverse to the Borrower and its Subsidiaries taken as a whole.  As of the date of delivery of such balance sheets, none of the Obligors knows of any basis for the assertion against it of any liability or obligation of any nature that is not fairly disclosed (including, without limitation, as to the amount thereof) in the balance sheets delivered pursuant to Section 6.07(a) which, either individually or in the aggregate, could reasonably be expected to be materially adverse to the Borrower and its Subsidiaries taken as a whole.

 

 

 

(a)           All factual information (taken as a whole) furnished by or on behalf of the Obligors in writing to the Administrative Agent or any Lender (including, without limitation, all information contained in the Credit Documents to which any Obligor is a party and any financial statements referred to in Section 6.07(a)) for purposes of or in connection with this Agreement, the other Credit Documents or any transaction contemplated herein or therein is, and all other such factual information  (taken as a whole) hereafter furnished by or on behalf of any Obligor in writing to the Administrative Agent or any Lender will be, true and accurate in all material respects and did not fail to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time as such information was provided (or, if such information expressly relates to a specific date, as of such specific date).

 

(b)           The projections delivered to the Administrative Agent and the Lenders prior to the Closing Date have been prepared in good faith and are based on reasonable assumptions (it being understood that such financial projections are subject to uncertainties and contingencies, which may be beyond the control of the Borrower and that no assurances are given by the Borrower that the projections will be realized).

 

(c)           As of the Closing Date, the information contained in the Beneficial Ownership Certification is true and correct in all respects.

 

 

(a)           All proceeds of the Loans shall be used (i) to finance, in part, the acquisition costs of the Collateral Vessels, and/or (ii) to reimburse the Borrower and its Subsidiaries from time to time, in part, for the acquisition costs of the Collateral Vessels, and/or (iii) for payment of fees and expenses relating to the Transaction.

 

(b)           No part of the proceeds of any Loans will be used to buy or carry any Margin Stock or to extend credit for the purpose of buying or carrying any Margin Stock.  Neither the making of any Loan nor the use of the proceeds thereof will violate or be inconsistent with the Margin Regulations.

 

(c)           No proceeds of the Loans shall be used or made available directly or indirectly to fund, finance, or facilitate any activities, business or transaction of or with any Restricted Party, or in any Sanctioned Country, in violation of any Sanctions Laws, nor shall they otherwise be applied in a manner or for a purpose prohibited by Sanctions Laws or in any manner that could reasonably be expected to result in any Lender Creditor or any Obligor being in violation of Sanctions Laws.

 

(d)           No proceeds of the Loans shall be used, directly or, to the knowledge of any of the Borrower and its Subsidiaries after making due inquiry, indirectly, in furtherance of an offer, payment, promise to pay, or authorization of a payment or giving of money, or anything else of value, to a Foreign Official or any person in violation of the United States Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1 et seq. (“FCPA”), the UK Bribery Act 2010, and the anti-bribery and anti-corruption laws of those jurisdictions in which it does business (collectively, the “Anti-Corruption Laws”).

 

(e)           The Borrower is acting for its own account and the account of its Subsidiaries in connection with a borrowing of Loans, the performance and discharge of its obligations and liabilities under this Agreement or any of the other Credit Documents and the transactions and other arrangements effected or contemplated hereby or thereby and that the foregoing will not involve or lead to a contravention of any law, official requirement or other regulatory measure or procedure which has been implemented to combat Money Laundering.

 

 

(a)           All payments which an Obligor is liable to make under the Credit Documents to which it is a party can properly be made without deduction or withholding for or on account of any Tax payable under any law of any relevant jurisdiction applicable as of the Closing Date.

 

(b)           The Borrower and each of its Subsidiaries has timely filed with the appropriate Governmental Authorities (or obtained extensions with respect thereto) all U.S. federal income tax returns, statements, forms and reports for Taxes and all other material U.S. and non- U.S. tax returns, statements, forms and reports for Taxes required to be filed by or with respect to the income, properties or operations of the Borrower and/or any of its Subsidiaries (the “Returns”).  All such Returns accurately reflect in all material respects all liability for Taxes of the Borrower and its Subsidiaries as a whole for the periods covered thereby.  The Borrower and each of its Subsidiaries have at all times paid, or have provided adequate reserves (in accordance with GAAP) for the payment of, all Taxes payable by them.

 

(c)           There is no action, suit, proceeding, investigation, audit, or claim now pending or, to the best knowledge of the Borrower or any of its Subsidiaries, threatened by any authority regarding any Taxes relating to the Borrower or any of its Subsidiaries.

 

(d)           As of the Closing Date, neither the Borrower nor any of its Subsidiaries has entered into an agreement or waiver or been requested to enter into an agreement or waiver extending any statute of limitations relating to the payment or collection of material Taxes of the Borrower or any of its Subsidiaries, or is aware of any circumstances that would cause the taxable years or other taxable periods of the Borrower or any of its Subsidiaries not to be subject to the normally applicable statute of limitations.

 

 

(i)            each Plan (and each related trust, insurance contract or fund), other than any Multiemployer Plan and each trust related to the Multiemployer Plan, is in compliance with its terms and with all applicable laws, including without limitation ERISA and the Code;

 

(ii)           each Plan (and each related trust, if any), other than any Multiemployer Plan and any trust related to the Multiemployer Plan, which is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service, or still has a remaining period of time in which to apply for or receive such letter and to make any amendments necessary to obtain a favorable determination;

 

(iii)          no Reportable Event has occurred;

 

(iv)          to the knowledge of the Borrower, no Multiemployer Plan is insolvent or in critical status;

 

(v)           no Plan (other than a Multiemployer Plan) has an Unfunded Current Liability;

 

(vi)          each Plan (other than a Multiemployer Plan) which is subject to Section 412 of the Code or Section 302 of ERISA satisfies the minimum funding standard of such sections of the Code or ERISA, and no such Plan has applied for or received a waiver of the minimum funding standard or an extension of any amortization period, within the meaning of Section 412 of the Code or Section 303 of ERISA;

 

(vii)        all contributions required to be made by the Borrower or any of its Subsidiaries or ERISA Affiliates with respect to a Plan subject to Title IV of ERISA have been or will be timely made (except as disclosed on Schedule V hereto);

 

(viii)        neither the Borrower nor any of its Subsidiaries nor any ERISA Affiliate has any liability (including any indirect, contingent or secondary liability) to or on account of a Plan pursuant to Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4975 of the Code or reasonably expects to incur any such liability under any of the foregoing sections with respect to any Plan;

 

(ix)          neither the Borrower nor any of its Subsidiaries nor any ERISA Affiliate has received written notice from the PBGC or a plan administrator (in the case of a Multiemployer Plan) indicating that proceedings have been instituted by the PBGC to terminate or appoint a trustee to administer any Plan which is subject to Title IV of ERISA;

 

(x)           no action, suit, proceeding, hearing, audit or investigation with respect to the administration, operation or the investment of assets of any Plan, other than a Multiemployer Plan, (other than routine claims for benefits) is pending, or, to the best knowledge of the Borrower, expected or threatened;

 

(xi)          using actuarial assumptions and computation methods consistent with Part 1 of subtitle E of Title IV of ERISA, the Borrower and its Subsidiaries and ERISA Affiliates have not incurred any liabilities to any Plans which are Multiemployer Plans as a result of a complete withdrawal therefrom;

 

(xii)         no lien imposed under the Code or ERISA on the assets of the Borrower or any of its Subsidiaries or any ERISA Affiliate with respect to a Plan exists and no event has occurred which could reasonably be expected to give rise to any such lien on account of any Plan (other than a Multiemployer Plan); and

 

(xiii)        the Borrower and its Subsidiaries do not maintain or contribute to any employee welfare plan (as defined in Section 3(1) of ERISA and subject to ERISA) which provides post-employment health benefits to retired employees or other former employees (other than as required by Section 601 of ERISA or other similar and applicable law).

 

(b)           Except as would not reasonably be expected to have a Material Adverse Effect, individually or in the aggregate, (i) each Foreign Pension Plan has been maintained in compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities; (ii) all contributions required to be made with respect to a Foreign Pension Plan have been or will be timely made; (iii) neither the Borrower nor any of its Subsidiaries has incurred any obligation in connection with the termination of or withdrawal from any Foreign Pension Plan; and (iv) the present value of the accrued benefit liabilities (whether or not vested) under each Foreign Pension Plan, determined as of the end of the Borrower’s most recently ended fiscal year on the basis of reasonable actuarial assumptions, did not exceed the current value of the assets of such Foreign Pension Plan allocable to such benefit liabilities.

 

 

Liens.  No filings or recordings are required in order to perfect the security interests created under any Security Document except for filings or recordings to be made on or prior to the Closing Date pursuant to the Security Documents.

 

 

 

 

 

 

(b)           All licenses, permits, registrations or approvals required for the business of the Borrower and each of its Subsidiaries, as conducted as of the Closing Date, Fleet Vessels, Real Property, and any other facility or vessel owned, operated or occupied by the Borrower or any of its Subsidiaries under any Environmental Law have been secured and the Borrower and each of its Subsidiaries is in substantial compliance therewith, except for such failures to secure or comply as could not reasonably be expected to have a Material Adverse Effect.

 

(c)           Neither the Borrower nor any of its Subsidiaries is, to its knowledge, in any respect in noncompliance with, breach of or default under any applicable writ, order, judgment, injunction, or decree to which the Borrower or such Subsidiary is a party or which would affect the ability of the Borrower or such Subsidiary to operate any Fleet Vessel, Real Property or other facility or vessel and no event has occurred and is continuing which, with the passage of time or the giving of notice or both, would constitute noncompliance, breach of or default thereunder, except in each such case, such noncompliance, breaches or defaults as could not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.

 

(d)           There are no Environmental Claims pending or, to the knowledge of the Borrower, threatened against the Borrower or any of its Subsidiaries which, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

(e)           There are no facts, circumstances, conditions or occurrences on or relating to the past or present business of the Borrower and each of its Subsidiaries, any Fleet Vessel, Real Property or other facility or vessel currently or formerly owned, operated or occupied by the Borrower or any of its Subsidiaries that is reasonably likely (i) to form the basis of an Environmental Claim against the Borrower or any of its Subsidiaries, including relating to any Collateral Vessel, Real Property or other facility or vessel owned by the Borrower or any its Subsidiaries or (ii) to cause such Fleet Vessel, Real Property or other facility or vessel to be subject to any restrictions on its ownership, occupancy, use or transferability under any Environmental Law, except in each such case, such Environmental Claims or restrictions that individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect.

 

(f)           Hazardous Materials have not at any time prior to the Closing Date, been (i) generated, used, treated or stored on, or transported to or from, any Fleet Vessel, Real Property or other facility or vessel at any time owned, operated or occupied by the Borrower or any of the Subsidiary Guarantors or (ii) Released on or from any such Fleet Vessel, Real Property or other facility or vessel, except in each case for clauses (i) and (ii) above where such occurrence or event, either individually or in the aggregate, is reasonably likely to have a Material Adverse Effect.

 

 

 

 

 

reflect the insurance maintained for the Collateral Vessel(s) with respect to which Loans are made on such Borrowing Date.

 

 

 

 

 

(a)           To the extent applicable, each of the Borrower and its Subsidiaries is in compliance, in all material respects, with (i) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, (ii) all United States laws relating to terrorism or money laundering including the Executive Order, (iii) the PATRIOT Act and (iv) any analogous European Union or other applicable law, rule or regulation.

 

(b)           None of the Borrower and its Subsidiaries nor, after making due inquiry, any Affiliate of any of the Borrower and its Subsidiaries, is, or will be after consummation of the Transaction and application of the proceeds of the Loans, a Restricted Party.

 

(c)           The Borrower and its Subsidiaries do not, in violation of Sanctions Law, deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to Sanctions Law or engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Sanctions Law.

 

(d)           Each of the Borrower and its Subsidiaries and their respective directors, officers, employees or, to the knowledge of the Borrower and its Subsidiaries after making due inquiry, Affiliates, agents or representatives has been for the past five years and is in compliance in all material respects with Sanctions Laws and applicable Anti-Corruption Laws and anti-money laundering laws or regulations in any applicable jurisdiction.

 

(e)           None of the Borrower nor its Subsidiaries, nor their respective directors, officers, employees, or, to the knowledge of the Borrower and its Subsidiaries after making due inquiry, agents or representatives (i) is a Restricted Party, or is involved in any transaction through which it is likely to

 

become a Restricted Party; or (ii) is subject to or involved in any inquiry, claim, action, suit, proceeding or investigation against it with respect to Sanctions Laws by any Sanctions Authority.

 

(f)            Each of the Borrower and its Subsidiaries has implemented and maintains in effect policies and procedures with respect Anti-Corruption Laws, Sanctions Laws and anti-money laundering laws, which policies and procedures are designed to promote compliance with Sanctions Laws, Anti-Corruption Laws and anti-money laundering laws by it, its Subsidiaries and their respective directors, officers, employees and agents and such parties are required to comply therewith.

 

 

 

 

 

 

 

do not believe that they will incur, debts beyond their respective ability to pay such debts as such debts mature and (iii) each Obligor on a stand-alone basis and the Borrower and its Subsidiaries taken as a whole do not have unreasonably small working capital with which to continue their respective businesses.  For purposes of this Section 6.32(a), “debt” shall mean any liability on a claim, and “claim” shall mean (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured.  The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

(b)           Neither the Borrower nor any other Obligor has taken any corporate action nor have any other steps been taken or legal proceedings been started or (to its knowledge and belief) threatened against any of them for the winding-up, dissolution or for the appointment of a liquidator, administrator, receiver, administrative receiver, trustee or similar officer of any of them or any or all of their assets or revenues nor have any of them sought any other relief under any applicable insolvency or bankruptcy law.

 

 

SECTION 7            Affirmative Covenants.  The Borrower hereby covenants and agrees that on and after the Closing Date and until the Total Commitments, Loans and Notes (in each case together with interest thereon), Fees and all other Credit Document Obligations (other than indemnities described in Section 11.01(b) which are not then due and payable) incurred hereunder and thereunder, are paid in full:

 

 

(a)           Quarterly Financial Statements.  Commencing with the fiscal quarter ending September 30, 2018, within 45 days (or, if applicable, such shorter period as the Securities and Exchange Commission shall specify for the filing of quarterly reports on Form 10-Q if the Borrower is required to file such a quarterly report) after the end of each of the first three fiscal quarters of each fiscal year, (i) a consolidated balance sheet and related statements of operations and cash flows showing the financial position of the Borrower and its Subsidiaries as of the close of such fiscal quarter and the consolidated results of its operations during such fiscal quarter and the then-elapsed portion of the fiscal year and setting forth in comparative form the corresponding figures for the corresponding periods of the prior fiscal year, all of which shall be in reasonable detail and which consolidated balance sheet and related statements of operations and cash flows shall be certified by an Authorized Officer of the Borrower as fairly presenting, in all material respects, the financial position and results of operations of the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP (subject to normal year-end audit adjustments and the absence of footnotes) and (ii) management’s discussion and analysis of the important operational and financial developments during such fiscal quarters.

 

(b)           Annual Financial Statements.  Within 90 days (or, if applicable, such shorter period as the Securities and Exchange Commission shall specify for the filing of annual reports on Form

 

10-K if the Borrower is required to file such an annual report) after the end of each fiscal year, (i) a consolidated balance sheet and related statements of operations, cash flows and owners’ equity showing the financial position of the Borrower and its Subsidiaries as of the close of such fiscal year and the consolidated results of its operations during such fiscal year and setting forth in comparative form the corresponding figures for the prior fiscal year, which consolidated balance sheet and related statements of operations, cash flows and owners’ equity shall be audited by independent public accountants of recognized national standing and accompanied by an opinion of such accountants (which shall not be qualified in any material respect) to the effect that such consolidated financial statements fairly present, in all material respects, the financial position and results of operations of the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP and (ii) management’s discussion and analysis of the important operational and financial developments during such fiscal year.

 

(c)           Projections, etc.  As soon as available but not more than 45 days after the end of each calendar year, cash flow projections (including a balance sheet and statement of profit and loss and cash flow) of the Borrower and its Subsidiaries in reasonable detail for the calendar year in which such cash flow projections are actually delivered.

 

(d)           Appraisal Reports.  At the time of delivery of the certificates provided for in Section 7.01(e), and at any other time at the option of the Borrower or within 14 days of the written request of the Administrative Agent, Appraisals for each Collateral Vessel dated no more than 30 days prior to the delivery thereof  (it being understood, for avoidance of doubt,  that the Appraisals  required pursuant to Section 5.02(e) shall be dated no more than 60 days prior to delivery thereof) in form and substance reasonably acceptable to the Administrative Agent and from two Approved Appraisers stating the then current Appraised Value of each Collateral Vessel. All such Appraisals shall be conducted by, and made at the expense of, the Borrower (it being understood that the Administrative Agent may and, at the request of the Required Lenders, shall, upon notice to the Borrower, obtain such Appraisals and that the cost of all such Appraisals will be for the account of the Borrower); provided that, unless an Event of Default shall then be continuing, in no event shall the Borrower be required to pay for more than two Appraisals in excess of the quarterly Appraisals obtained pursuant to this Section 7.01(d) in any single fiscal year of the Borrower, with the cost of any such reports in excess thereof to be paid by the Lenders on a pro rata basis.

 

(e)           Officer’s Compliance Certificates.

 

(i)            At the time of the delivery of the financial statements provided for in Sections 7.01(a) and (b), a certificate of an Authorized Officer of the Borrower  substantially in the form of Exhibit I-1 (a “Compliance Certificate”) to the effect that no Default or Event of Default has occurred and is continuing or, if any Default or Event of Default has occurred and is continuing, specifying the nature and extent thereof (in reasonable detail), which certificate shall (x) set forth the calculations required to establish whether the Borrower is in compliance with the Financial Covenants at the end of the relevant fiscal quarter or year, as the case may be and (y) certify that there have been no changes to any of the representations or warranties set forth in each of the Security Documents since the Closing Date or, if later, since the date of the most recent certificate delivered pursuant to this Section 7.01(e), or if there have been any such changes, a list in reasonable detail of such changes and whether the Borrower and the other Obligors have otherwise taken all actions required to be taken by them pursuant to such Security Documents or any one of them.

 

(ii)          At the time of the delivery of the Compliance Certificate provided for in clause (i) above, a certificate of an Authorized Officer of the Borrower substantially in the form of Exhibit I-2 to the effect that no Default or Event of Default has occurred and is continuing or, if any Default or Event of Default has occurred and is continuing, specifying the nature and extent thereof (in reasonable detail),

 

which certificate shall set forth the calculations required to establish whether the Borrower is in compliance with the Financial Covenant set forth in Section 8.07(d).

 

(iii)          At the time of a Collateral Disposition in respect of any Collateral Vessel, a certificate of an Authorized Officer of the Borrower which certificate shall (x) certify on behalf of the Borrower the last Appraisals received pursuant to Section 7.01(d) determining the Aggregate Appraised Value of all Collateral Vessels, after giving effect to such disposition(s) and/or showing the individual Appraised Value of all Collateral Vessels owned by the Subsidiary Guarantors which have not been sold, transferred, lost or otherwise disposed of at such time, and (y) set forth the calculations required to establish whether the Borrower is in compliance with the provisions of Section 8.07(d) after giving effect to such disposition.

 

(f)            Notice of Default, Material Litigation, Event of Loss or Major Casualty.  Promptly, and in any event within three (3) Business Days after the Borrower obtains actual knowledge thereof, notice of (i) the occurrence of any event which constitutes a Default or Event of Default which notice shall specify the nature thereof, the period of existence thereof and what action the Borrower proposes to take with respect thereto, (ii) any material litigation or governmental investigation or proceeding pending or threatened against the Borrower or any of its Subsidiaries, (iii) any Event of Loss in respect of any Collateral Vessel, (iv) any Major Casualty in respect of any Collateral Vessel and (v) any material default under any charter relating to a Collateral Vessel.

 

(g)           Other Reports and Filings.  Promptly, (i) copies of all financial information, proxy materials and other information and reports, if any, which the Borrower or any of its Subsidiaries has filed with the Securities and Exchange Commission (or any successor thereto) and (ii) copies of all financial information and other information and reports, if any, which the Borrower or any of its Subsidiaries has delivered to holders of its Financial Indebtedness pursuant to the terms of the documentation governing such Financial Indebtedness (or any trustee, agent or other representative therefor).

 

(h)           Environmental Matters.  Promptly upon, and in any event within five (5) Business Days after, the Borrower obtains knowledge thereof, written notice of any of the following environmental matters occurring after the Closing Date, except to the extent that such environmental matters could not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect:

 

(i)            any Environmental Claim pending or threatened in writing against the Borrower or any of its Subsidiaries or any Collateral Vessel or property owned or operated or occupied by the Borrower or any of its Subsidiaries;

 

(ii)           any condition or occurrence on or arising from any Collateral Vessel or property owned or operated or occupied by the Borrower or any of its Subsidiaries or any other location that (A) results in noncompliance by the Borrower or such Subsidiary with any applicable Environmental Law or (B) could reasonably be expected to form the basis of an Environmental Claim against the Borrower or any of its Subsidiaries or relating to any such Collateral Vessel or property;

 

(iii)          any condition or occurrence on any Collateral Vessel or property owned or operated or occupied by the Borrower or any of its Subsidiaries that could reasonably be expected to cause such Collateral Vessel or property to be subject to any restrictions on the ownership, occupancy, use or transferability by the Borrower or any of its Subsidiaries of such Collateral Vessel or property under any Environmental Law; and

 

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[Signature page to Genco Credit Agreement – 2018]

 

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