Exhibit 10.1

 

EXECUTION VERSION

 

$ 581,000,000

 

CREDIT AGREEMENT

 

among

 

GENER8 MARITIME, INC.,

as Parent,

 

GENER8 MARITIME SUBSIDIARY II INC.,
as Borrower,

 

VARIOUS LENDERS

 

and

 

NORDEA BANK FINLAND PLC, NEW YORK BRANCH,

 

as Facility Agent and Collateral Agent

 

NORDEA BANK FINLAND PLC, NEW YORK BRANCH and CITIBANK, N.A.

 

as Joint Global Coordinators

 

 

Dated as of September 3, 2015

 

 

CITIBANK, N.A., DNB MARKETS, INC., DVB BANK SE, NIBC BANK N.V.,

 

NORDEA BANK FINLAND PLC, NEW YORK BRANCH, and

 

SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)

 

 

as Mandated Lead Arrangers and Book Runners

 

 

TABLE OF CONTENTS

 

		Page
Section 1.	Definitions and Accounting Terms	2
1.01	Defined Terms	2
1.02	Other Definitional Provisions	34
1.03	Rounding	35
Section 2.	Amount and Terms of Credit Facility	35
2.01	The Loans	35
2.02	Notice of Borrowing	35
2.03	Disbursement of Funds	36
2.04	Notes	36
2.05	Pro Rata Borrowings	37
2.06	Interest	37
2.07	Interest Periods	38
2.08	Increased Costs, Illegality, Market Disruption Event, etc.	40
2.09	Compensation	41
2.10	Change of Lending Office	42
2.11	Replacement of Lenders	42
Section 3.	Fees; Reduction of Commitments	43
3.01	Fees	43
3.02	Mandatory Reduction of Commitments	43
Section 4.	Prepayments; Payments; Taxes	43
4.01	Voluntary Prepayments	43
4.02	Mandatory Repayments	44
4.03	Method and Place of Payment	46
4.04	Net Payments; Taxes	46
4.05	Application of Proceeds	49
Section 5.	Conditions to Closing Date	50
5.01	Conditions Precedent to the Closing Date	50
Section 6.	Representations and Warranties	53
6.01	Corporate/Limited Liability Company/Limited Partnership Status	53
6.02	Corporate Power and Authority; Legal Validity and Enforceability	53
6.03	No Violation	53
6.04	Governmental Approvals	54
6.05	Financial Statements; Financial Condition; Undisclosed Liabilities	54
6.06	Litigation	55
6.07	True and Complete Disclosure	55
6.08	Use of Proceeds; Margin Regulations	55

 

ii

 

6.09	Tax Returns and Payments	56
6.10	Compliance with ERISA	56
6.11	Subsidiaries	58
6.12	Compliance with Statutes, etc.	58
6.13	Investment Company Act	59
6.14	Anti-Money Laundering; Anti-Corruption	59
6.15	Sanctions Laws	59
6.16	Pollution and Other Regulations	60
6.17	Labor Relations	61
6.18	Patents, Licenses, Franchises and Formulas	61
6.19	Indebtedness	61
6.20	Insurance	61
6.21	Concerning the Collateral Vessels	61
6.22	Citizenship	62
6.23	Collateral Vessel Classification; Flag	62
6.24	No Immunity	62
6.25	Fees and Enforcement	62
6.26	Form of Documentation	62
6.27	Solvency	63
Section 7.	Affirmative Covenants	63
7.01	Information Covenants	63
7.02	Books, Records and Inspections	66
7.03	Maintenance of Property; Insurance	67
7.04	Corporate Franchises	67
7.05	Compliance with Statutes, etc.	67
7.06	Compliance with Environmental Laws	67
7.07	ERISA	68
7.08	End of Fiscal Years; Fiscal Quarters	70
7.09	Performance of Obligations	70
7.10	Payment of Taxes	70
7.11	Post-Closing Obligations; Further Assurances	70
7.12	Deposit of Earnings; Minimum Liquidity Account	71
7.13	Ownership of Subsidiaries	72
7.14	Flag of Collateral Vessels; Citizenship; Collateral Vessel Classifications	72
7.15	Use of Proceeds	74
7.16	Charter Contracts	74
7.17	Separate Existence	74
7.18	Sanctions	75
7.19	Maintenance of Listing	75
Section 8.	Negative Covenants	75
8.01	Liens	75
8.02	Consolidation, Merger, etc.	76
8.03	Disposal, Sale of Collateral, etc.	77
8.04	Dividends	78

 

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8.05	Indebtedness	80
8.06	Transactions with Affiliates	81
8.07	Financial Covenants	82
8.08	Limitation on Modifications of Certificate of Incorporation, By-Laws and Certain Other Agreements; etc.	82
8.09	Limitation on Certain Restrictions on Subsidiaries	83
8.10	Limitation on Issuance of Equity Interests	83
8.11	Business	83
8.12	Jurisdiction of Employment	84
8.13	Chartering Arrangements	84
8.14	Special Provisions Relating to the BlueMountain Indebtedness	84
Section 9.	Events of Default	85
9.01	Payments	85
9.02	Representations, etc.	85
9.03	Covenants	85
9.04	Default Under Other Agreements	85
9.05	Bankruptcy, etc.	85
9.06	ERISA	86
9.07	Security Documents	87
9.08	Guaranties	87
9.09	Judgments	87
9.10	Change of Control	87
Section 10.	Agency and Security Trustee Provisions	88
10.01	Appointment	88
10.02	Nature of Duties	88
10.03	Lack of Reliance on the Agents	89
10.04	Certain Rights of the Agents	89
10.05	Reliance	89
10.06	Indemnification	90
10.07	The Facility Agent in its Individual Capacity	90
10.08	Holders	90
10.09	Resignation by the Facility Agent	90
10.10	The Mandated Lead Arrangers	91
10.11	Collateral Matters	91
10.12	Delivery of Information	94
Section 11.	Miscellaneous	94
11.01	Payment of Expenses, etc.	94
11.02	Right of Setoff	95
11.03	Notices	95
11.04	Benefit of Agreement; Assignments; Participations	96
11.05	No Waiver; Remedies Cumulative	98
11.06	Payments Pro Rata	99
11.07	Calculations; Computations	99

 

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11.08	Agreement Binding	99
11.09	GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL	100
11.10	Counterparts	101
11.11	Effective Date; Closing Date	101
11.12	Headings Descriptive	101
11.13	Amendment or Waiver; etc.	101
11.14	Survival	103
11.15	Domicile of Loans	103
11.16	Confidentiality	104
11.17	Register	104
11.18	Judgment Currency	105
11.19	Language	105
11.20	Waiver of Immunity	105
11.21	USA PATRIOT Act Notice	106
11.22	Severability	106
Section 12.	Parent Guaranty	106
12.01	Guaranty	106
12.02	Bankruptcy	107
12.03	Nature of Liability	107
12.04	Independent Obligation	107
12.05	Authorization	107
12.06	Reliance	108
12.07	Subordination	108
12.08	Waiver	109
12.09	Judgment Shortfall	110

 

 

 

v

 

 

vi

 

THIS CREDIT AGREEMENT, dated as of September 3, 2015, among GENER8 MARITIME, INC., a Marshall Islands corporation (the “ Parent ”), GENER8 MARITIME SUBSIDIARY II INC., a Marshall Islands corporation (the “ Borrower ”), the Lenders party hereto from time to time, and NORDEA BANK FINLAND PLC, NEW YORK BRANCH (“ Nordea ”), as Facility Agent (in such capacity, the “ Facility Agent ”) and as Collateral Agent under the Security Documents (in such capacity, the “ Collateral Agent ”).  All capitalized terms used herein and defined in Section 1 are used herein as therein defined.

 

W I T N E S S E T H :

 

WHEREAS, the Parent, Gener8 Maritime Subsidiary IV Inc. (f/k/a General Maritime Subsidiary II Corporation), a Marshall Islands Corporation (“ GMSC IV ”), the Borrower, Gener8 Maritime Subsidiary III Ltd. (f/k/a Arlington Tankers Ltd.), a Bermuda corporation, as a Guarantor (“ GMSC III ”), the lenders party thereto and Nordea, as administrative agent and collateral agent, are party to a Second Amended and Restated Credit Agreement, dated as of May 17, 2012 (as amended, modified and/or supplemented from time to time, the “ $273M Credit Agreement ”);

 

WHEREAS, the Parent, the Borrower, GMSC IV, GMSC III, the lenders party thereto and Nordea, as administrative agent and collateral agent, are party to a Second Amended and Restated Credit Agreement, dated as of May 17, 2012 (as amended, modified and/or supplemented from time to time, the “ $508M Credit Agreement ” and together with the $273M Credit Agreement, the “ Existing Credit Agreements ”);

 

WHEREAS, pursuant to an Agreement and Plan of Merger (the “ Merger Agreement ”), dated as of February 24, 2015 by and among the Parent, Gener8 Maritime Acquisition, Inc., Navig8 Crude Tankers, Inc. and Shareholder Representative Services LLC and OCM Marine Holdings TP, L.P., as the equityholders’ representatives, Gener8 Maritime Acquisition, Inc. merged with and into Navig8 Crude Tankers, Inc. with the Parent as the surviving entity (such transaction, the “ Merger ”);

 

WHEREAS, on July 17, 2015, the Parent consummated an initial public offering of its common stock pursuant to which it has received net cash proceeds of approximately $215,000,000 (including net cash proceeds received as a result of the exercise of underwriter’s over allotment option);

 

WHEREAS, the Borrower wishes to repay in full all amounts outstanding and terminate all commitments (the “ Refinancing ”) under the Existing Credit Agreements; and

 

WHEREAS, in order to effect the Refinancing and to pay the fees and expenses incurred in connection therewith, the Lenders are willing to make available to the Borrower, the Credit Facility.

 

NOW, THEREFORE, the parties hereto agree as follows:

 

 

Section 1.                                            Definitions and Accounting Terms .

 

1.01                         Defined Terms .  As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

 

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

 

“ Acceptable Flag Jurisdiction ” shall have the meaning provided in Section 7.14.

 

“ Acceptable Pool Manager ” shall mean (i) VL8 Pool Inc., (ii) V8 Pool Inc., (iii) Unique Tankers LLC, (iv) any Affiliate of the Parent ( provided that the requirements of Section 8.06 shall be satisfied with respect thereto) and (v) any other reputable pool manager ( provided that the Parent shall give the Facility Agent at least 30 days’ prior written notice of the inclusion of any Collateral Vessel in such a pool).

 

“ Additional Collateral ” shall mean additional Collateral reasonably satisfactory to the Required Lenders posted in favor of the Collateral 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) shall be satisfactory), pursuant to security documentation in form and substance reasonably satisfactory to the Collateral Agent, in an aggregate amount at least sufficient to cure such non-compliance.

 

“ 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 Parent shall include any Person that directly or indirectly owns more than 5% of any class of the capital stock of the Parent and any officer or director of the Parent 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, neither the Facility Agent, nor the Collateral Agent, nor the Mandated Lead Arrangers nor any Lender (or any of their respective affiliates) shall be deemed to constitute an Affiliate of the Parent or its Subsidiaries in connection with the Credit Documents or its dealings or arrangements relating thereto.

 

“ Agents ” shall mean, collectively, the Facility Agent, the Collateral Agent and each Mandated Lead Arranger.

 

“ Aggregate Collateral Vessel Value ” shall have the meaning provided in Section 8.07(d).

 

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

 

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“ Applicable Margin ” shall mean 3.75%.

 

“ Appraisal ” shall mean, with respect to a Collateral Vessel, a written appraisal provided by an Approved Appraiser in favor of the Facility Agent for the purposes of determining the Fair Market Value.

 

“ Approved Appraiser ” shall mean H. Clarksons & Company Ltd., Fearnleys AS, Lorentzen & Stemoco, Arrow Sale & Purchase Ltd., Simpson Spence & Young or any other independent appraisal firm acceptable to the Facility Agent (acting on the instructions of the Required Lenders) .

 

“ Approved Technical Manager ” shall mean, with respect to a Collateral Vessel, the technical managers set forth under the heading “Technical Manager” on Schedule III, or any other reputable company experienced in technical and commercial ship management selected by the Borrower and reasonably acceptable to the Required Lenders.

 

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

 

“ Available Commitment ” shall have the meaning provided in Section 2.01(b).

 

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

 

“ Bankruptcy Proceeding ” shall have the meaning provided in Section 10.11(e).

 

“ Bermuda Share Charge ” shall have the meaning provided in the definition of “Collateral and Guaranty Requirements”.

 

“ BlueMountain Indebtedness ” shall mean unsecured Indebtedness incurred by the Parent, pursuant to that certain note and guarantee agreement, dated as of March 28, 2014, among Parent, as borrower and Blue Mountain Capital Management, LLC and certain of its affiliates, as purchasers (as amended by the Closing Date BlueMountain Amendment and as further amended, restated, replaced or modified from time to time provided that after giving effect to any such amendment, restatement, replacement or modification (including in respect of any Permitted BlueMountain Refinancing Indebtedness) the BlueMountain Indebtedness Requirements shall be satisfied), in an initial aggregate principal amount not to exceed $131,600,000, as such amount may be (i) increased to include the amount of interest accrued after March 28, 2014 and capitalized or paid in kind in accordance with the terms thereof and other amounts payable in connection therewith and/or (ii) decreased pursuant to principal prepayments thereof permitted pursuant to Section 8.04.

 

“ BlueMountain Indebtedness Requirements ” shall mean with respect to the BlueMountain Indebtedness or any amendment, restatement, replacement or other modification thereof that (i) such Indebtedness shall mature no earlier than March 28, 2020 and shall not require any scheduled amortization, mandatory redemption or prepayment prior to such date (other than any prepayment required (a) from the net cash proceeds from the disposition of any Equity Interests of Gener8 Maritime Subsidiary V Inc., or any assets of Gener8 Maritime Subsidiary V Inc. and/or its Subsidiaries and/or (b) upon a change of control (as defined in the

 

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documentation governing such Indebtedness) or acceleration of such Indebtedness following an event of default thereunder), (ii) such Indebtedness shall not be secured or guaranteed by any Subsidiary of the Parent other than Gener8 Maritime Subsidiary V Inc., (iii) such Indebtedness shall permit the Parent at its option to make all interest payments thereunder in kind or in cash and (iv) to the extent that the documentation governing the Indebtedness contains any financial maintenance covenant (other than a collateral maintenance test) applicable to the Parent that is more favorable to the lenders or providers thereunder than to the Lenders, this Agreement shall automatically be amended to include such more favorable financial maintenance covenant (including any definitions used therein) without any further action or consent of the Borrower and the Facility Agent shall be permitted to amend this Agreement to reflect such financial maintenance covenant (it being understood and agreed that the Borrower shall be deemed to have consented to such amendment and authorized the Facility Agent to effect such amendment on its behalf).

 

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

 

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

 

“ Business Day ” shall mean (i) for all purposes other than as covered by clause (ii) below, any day except Saturday, Sunday and any day which shall be in New York City a legal holiday or a day on which banking institutions are authorized or required by law or other government action to close and (ii) with respect to all notices and determinations in connection with, and payments of principal and interest on, Loans, any day which is a Business Day described in clause (i) above and which is also a day for trading by and between banks in U.S. dollar deposits in the London interbank market.

 

“ Capitalized Lease Obligations ” of any Person shall mean all rental obligations which, under GAAP, are or will be required to be capitalized on the books of such Person, in each case taken at the amount thereof accounted for as indebtedness in accordance with such principles.

 

“ 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 (x) capital, surplus and undivided profits aggregating in excess of $200,000,000 and (y) a long-term unsecured debt rating of at least “A” or the equivalent thereof from S&P or “A2” or the equivalent thereof from Moody’s 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 the acquisition by such Person, and (v) investments in money

 

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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 the same may be 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:

 

(a)                                  in respect of the Borrower, the occurrence of any act, event or circumstance that without prior written consent of the Lenders results in the Parent owning directly or indirectly less than 100% of the issued and outstanding Equity Interests in the Borrower; or

 

(b)                                  in respect of a Subsidiary Guarantor, the occurrence of any act, event or circumstance that without prior written consent of the Lenders results in the Parent owning directly or indirectly less than 100% of the issued and outstanding Equity Interests in that Subsidiary Guarantor, except in connection with any sale of a Subsidiary Guarantor permitted under Section 8.03(a); or

 

(c)                                   in respect of the Parent:

 

(i)                                      a “person” or “group” (within the meaning of Sections 13(d) and 14(d) of the Exchange Act), is or shall be the “beneficial owner” (as so defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act) or otherwise have obtained ownership or control, directly or indirectly, of 35% or more on a fully diluted basis of the voting and/or economic interest in the Parent’s Equity Interests; or

 

(ii)                                   the replacement of a majority of the directors on the board of directors of the Parent over a two-year period from the directors who constituted the board of directors of the Parent 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 Parent still in office who either were members of such board of directors at the

 

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beginning of such period or whose election as a member of such Board of Directors were previously so approved ; or

 

(iii)                                a “change of control” or similar event shall occur as provided in any outstanding Indebtedness which results in such outstanding Indebtedness becoming due and payable prior to its stated maturity (excluding Indebtedness with an aggregate principal amount of less than $20,000,000) of the Parent or any of its Subsidiaries (or the documentation governing the same).

 

“ Closing Date ” shall have the meaning provided in Section 5.01.

 

“ 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 and Insurance Collateral, all Collateral Vessels and all cash and Cash Equivalents at any time delivered as collateral thereunder or hereunder.

 

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

 

“ Collateral and Guaranty Requirements ” shall mean, with respect to a Collateral Vessel, the requirement that:

 

(a)                                  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 Facility Agent the Subsidiaries Guaranty, substantially in the form of Exhibit E (as modified, supplemented or amended from time to time, together with any Joinder Agreement, the “ Subsidiaries Guaranty ”), or a joinder thereto in form and substance satisfactory to the Facility Agent (each as modified, supplemented or amended from time to time, a “ Joinder Agreement ”) and the Subsidiaries Guaranty shall be in full force and effect;

 

(b)                                  (x) the Parent, the Borrower and each Subsidiary Guarantor shall have duly authorized, executed and delivered the Pledge Agreement substantially in the form of Exhibit F-1 (as modified, supplemented or amended from time to time, together with any Joinder Agreement, the “ Pledge Agreement ”) or Joinder Agreement and shall have (A) delivered to the Collateral Agent, as pledgee, all the Pledged Securities referred to therein with respect to the Equity Interests in each Subsidiary Guarantor organized in the Marshall Islands or Liberia, the Minimum Liquidity Account and all Concentration Accounts and (B) otherwise complied with all of the requirements set forth in the Pledge Agreement, (y) the Borrower shall have duly authorized, executed and delivered a Bermuda-law share charge substantially in the form of Exhibit F-2 (as modified, supplemented or amended from time to time, the “ Bermuda Share Charge ”) and shall

 

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have (A) delivered to the Collateral Agent, as pledgee, all the Charged Shares referred to therein with respect to the Equity Interests in each Subsidiary Guarantor organized under the laws of Bermuda and (B) otherwise complied with all of the requirements set forth in the Bermuda Share Charge, and (z) 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;

 

(c)                                   the Parent, the Borrower, each Guarantor, the Collateral Agent and Nordea (or such other deposit account bank as the Facility Agent may agree in its sole discretion), as depositary bank, shall have duly executed and delivered a control agreement substantially in the form attached to the Pledge Agreement, (or, in each case, such other form as may be reasonably acceptable to the Facility Agent), with respect to any Concentration Account or the Minimum Liquidity Account owned by the Parent, the Borrower or such Subsidiary Guarantor;

 

(d)                                  the Borrower and each Subsidiary Guarantor that owns a Collateral Vessel shall have duly authorized, executed and delivered a Global Assignment Agreement substantially in the form of Exhibit G (as modified, supplemented or amended from time to time, together with any Joinder Agreement, the “ Global Assignment Agreement ”) or Joinder Agreement, and shall use commercially reasonable efforts to provide appropriate notices and consents related thereto, together granting a security interest and lien on all of the Borrower’s and such Subsidiary Guarantor’s (i) present and future Earnings and Insurance Collateral on such Collateral Vessels, (ii) present and future rights and receivables under any time charter or similar contract of employment that has as of the date of such time charter or similar contract of employment a remaining term of 24 months or more (including any extension or renewal option) and (iii) present and future rights and receivables under each Acceptable Pooling Agreement (as defined in the Global Assignment Agreement) and Management Agreement (as defined in the Global Assignment;

 

(e)                                   each Credit Party party to an Interest Rate Protection Agreement of Other Hedging Agreement shall have duly authorized, executed and delivered an Assignment of Hedging Agreements substantially in the form of Exhibit H (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 Interest Rate Protection Agreement or Other Hedging Agreement;

 

(f)                                    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 Collateral Agent and/or the Lenders a legal, valid and enforceable first priority security interest, in and lien upon such Collateral Vessel;

 

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(g)                                   all filings, deliveries of instruments and other actions necessary or desirable in the reasonable opinion of the Collateral Agent to perfect and preserve the security interests described in clauses (b) through and including (f) above shall have been duly effected, including, without limitation, proper financing statements (Form UCC-1) or amendments thereto, as requested by the Facility Agent or Collateral 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 Collateral Agent shall have received evidence thereof in form and substance reasonably satisfactory to the Collateral Agent;

 

(h)                                  the Facility Agent shall have received each of the following:

 

(i)                                      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;

 

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

 

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

 

(iv)                               certified copies of all pooling agreements and agreements related to the technical and commercial management of each Collateral Vessel;

 

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

 

(vi)                               a report, in form and scope reasonably satisfactory to the Facility Agent, from a firm of independent marine insurance brokers reasonably acceptable to the Facility Agent (it being understood that AON, BankServe and Marsh are acceptable) with respect to the insurance maintained by the Credit Parties 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 Facility Agent, the Collateral 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;

 

(i)                                      the Facility Agent shall have received from (a) special New York counsel to each of the Credit Parties (which shall be Kramer Levin Naftalis & Frankel LLP or other counsel to each of the Credit Parties qualified in such jurisdiction and reasonably satisfactory to the Facility Agent), an opinion addressed to the Facility Agent and each of

 

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the Lenders and dated as of the Closing Date covering the matters set forth in Exhibit C-1, (b) special Marshall Islands counsel to each of the Credit Parties (which shall be Reeder & Simpson P.C. or other counsel to each of the Credit Parties qualified in such jurisdiction and reasonably satisfactory to the Facility Agent), an opinion addressed to the Facility Agent and each of the Lenders and dated as of the Closing Date covering the matters set forth in Exhibit C-2, (c) special Liberian counsel to each of the Credit Parties (which shall be Norton Rose Fulbright or other counsel to each of the Credit Parties qualified in such jurisdiction and reasonably satisfactory to the Facility Agent), an opinion addressed to the Facility Agent and each of the Lenders and dated as of the Closing Date covering the matters set forth in Exhibit C-3, (d) special Bermuda counsel to each of the Credit Parties (which shall be Conyers Dill & Pearman Limited or other counsel to each of the Credit Parties qualified in such jurisdiction and reasonably satisfactory to the Facility Agent), an opinion addressed to the Facility Agent and each of the Lenders and dated as of the Closing Date covering the matters set forth in Exhibit C-4, and (e) counsel to each of the Credit Parties in the jurisdiction of the flag of the Collateral Vessel, an opinion addressed to the Facility Agent and each of the Lenders and dated as of the Closing Date covering such matters as shall be reasonably required by the Facility Agent, in each case which shall (x) be in form and substance reasonably acceptable to the Facility Agent and (y) cover the matters set forth in the relevant Exhibit, 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 Facility Agent may reasonably request;

 

(j)                                     (a) the Facility Agent shall have received a certificate, dated the Closing Date and reasonably acceptable to the Facility 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 Credit Party, and attested to by the Secretary or any Assistant Secretary (or, to the extent such Credit Party does not have a Secretary or Assistant Secretary, the analogous Person within such Credit Party) of such Credit Party, as the case may be, substantially in the form of Exhibit D, with appropriate insertions, together with copies of the Organizational Documents of such Credit Party and the resolutions of such Credit Party referred to in such certificate authorizing the consummation of the Transaction; and (b) the Facility Agent shall have received copies of governmental approvals, good standing certificates and bring-down telegrams or facsimiles, if any, which the Facility Agent may have reasonably requested in connection therewith, such documents and papers, where appropriate, to be certified by proper corporate or governmental authorities; and

 

(k)                                  the Parent shall have (x) duly authorized, executed and delivered to the Collateral 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 Borrower pursuant to documentation in form and substance reasonably satisfactory to the Facility Agent and (y) effected all filings, deliveries of instruments and other actions necessary or advisable in the reasonable opinion of the Facility Agent to perfect and preserve each security interest described in this clause (k) in each relevant jurisdiction, as the case may be (including, without limitation, the delivery of customary lien searches,

 

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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 Facility Agent.

 

“ Collateral Disposition ” shall mean (i) the sale, lease, transfer, bareboat charter or other disposition of Collateral by the Parent or any of its Subsidiaries to any Person other than to the Parent or any Subsidiary of the Parent in compliance with Section 8.03(c) or (ii) any Event of Loss of any Collateral Vessel; provided , however , that any charter of a Collateral Vessel shall not be considered a Collateral Disposition for purposes of Section 4.02 of this Agreement.

 

“ Collateral Vessel ” shall mean, at any time, each of the Vessels listed on Schedule III which is subject to a Collateral Vessel Mortgage at such time and with respect to which the other Collateral and Guaranty Requirements are satisfied at such time.

 

“ Collateral Vessel Mortgage ” shall mean, with respect to each Collateral Vessel, a first preferred mortgage and deed of covenants, if applicable, in substantially the form of Exhibit I-1, Exhibit I-2 or Exhibit I-3 or such other form as may be reasonably satisfactory to the Facility Agent along with any statutory mortgage (if applicable), as such mortgage (and deed of covenant, if applicable) 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 Collateral Agent, as security trustee and as mortgagee.

 

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

 

“ Commercial Manager ” shall mean (i) Navig8 Asia Pte. Ltd., a company organized under the laws of Singapore, (ii) VL8 Management Inc., a Marshall Islands corporation, (iii) any Affiliate of the Parent ( provided the requirements of Section 8.06 shall be satisfied with respect thereto) and (iv) any other reputable commercial manager ( provided that the Parent shall give the Facility Agent at least 30 days’ prior written notice of the entrance into a commercial management agreement with such manager).

 

“ Commitment ” shall mean, for each Lender, the amount set forth opposite such Lender’s name in Schedule I as the same may be (x) terminated pursuant to Sections 3.02 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 Letter ” shall mean collectively, (i) that certain commitment letter dated as of June 12, 2015 between the Parent and the Mandated Lead Arrangers and (ii) that certain joinder agreement dated as of July 27, 2015 supplemental thereto, each as amended.

 

“ 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.

 

“ Concentration Accounts ” shall mean, collectively the accounts listed as “Concentration Accounts” on Annex F to the Pledge Agreement (as updated from time to time).

 

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“ Consolidated Cash Interest Expense ” shall mean, for any period, (i) the total consolidated interest expense paid or payable in cash of the Parent and its Subsidiaries (including, without limitation, to the extent included under GAAP, all commission, discounts and other commitment fees and charges ( e.g. , fees with respect to letters of credit, Interest Rate Protection Agreements and Other Hedging Agreements) for such period (calculated without regard to any limitations on payment thereof), adjusted to exclude (to the extent same would otherwise be included in the calculation above in this clause (i)), the amortization of any deferred financing costs for such period and any interest expense actually “paid in kind” or accreted during such period, plus (ii) without duplication, that portion of Capitalized Lease Obligations of the Parent and its Subsidiaries on a consolidated basis representing the interest factor for such period, minus (iii) cash interest income.

 

“ Consolidated EBITDA ” shall mean, for any period, Consolidated Net Income for such period, adjusted by:

 

(a)                                  adding thereto the following to the extent deducted in calculating such Consolidated Net Income:

 

(i)                                      consolidated interest expense and amortization of debt discount and commissions and other fees and charges, including, without limitation, noncash interest payments, the interest component of capitalized lease obligations, net payments, if any, made (less net payments, if any, received), pursuant to Interest Rate Protection Agreements and Other Hedging Agreements, amortization or write off of deferred financing fees, debt issuance costs, commissions, fees and expenses and to the extent not reflected in consolidated interest, any losses on Interest Rate Protection Agreements and Other Hedging Agreements, associated with Indebtedness for such period (whether amortized or immediately expensed),

 

(ii)                                   consolidated income tax expense for such period, including, without limitation, penalties and interest related to such taxes or arising from any tax examinations and tax expense in respect of repatriated funds,

 

(iii)                                any gross transportation tax expense for such period,

 

(iv)                               all amounts attributable to depreciation, amortization and impairment charges, including, without limitation, amortization of intangible assets (including goodwill) and amortization of deferred financing fees or costs for such period,

 

(v)                                  any extraordinary losses, expenses or charges for such period, including, without limitation, accruals and payments for amounts payable under executive compensation agreements, severance costs, relocation costs, retention and completion bonuses and losses realized on disposition of property outside of the ordinary course of business and operating expenses directly attributable to the implementation of cost savings initiatives, and

 

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losses relating to activities constituting a business that is being terminated or discontinued,

 

(vi)                               any non-cash management retention or incentive program payments for such period, including any accelerated charges relating to option plans,

 

(vii)                            non-cash restricted stock compensation, including, without limitation, any restricted stock units,

 

(viii)                         any non-cash charges or losses, including, without limitation, non-cash compensation expenses for such period, adjustments to bad-debt reserves, losses recognized in respect of postretirement benefits as a result of the application of FASB ASC 715, losses on minority interests owned by any person, all losses from investments recorded using the equity method and the noncash impact of accounting changes or restatements less any extraordinary gains for such period,

 

(ix)                               any losses from the sales of any Vessels for such period,

 

(x)                                  all costs and expenses incurred in connection with any equity issuances permitted hereunder so long as, notwithstanding anything set forth herein to the contrary, the Net Cash Proceeds of such equity issuances are applied to the prepayment of the Loans and such prepayments are applied to reduce the Scheduled Repayment due on the Maturity Date,

 

(xi)                               non-recurring costs, charges, accruals, reserves and business optimization expense, including, without limitation, any severance and restructuring costs, integration costs related to acquisitions after the Closing Date, project start-up costs, transition costs, cost related to the opening, closure and/or consolidation of offices and facilities (including, without limitation, fees and expenses incurred in connection with the winding up of all of the Parent and its Subsidiaries’ activities and operations in Portugal), contract termination costs, systems establishment costs and excess pension charges,

 

(xii)                            all non-recurring fees, costs and expenses related to any litigation or settlements,

 

(xiii)                         any proceeds from business interruption insurance,

 

(xiv)                        any charges, losses, lost profits, expenses or write-offs to the extent indemnified or insured by a third party to the extent that coverage has not been denied and so long as such amounts are actually reimbursed to the Parent or any of its Subsidiaries within one year after the related amount is first added to Consolidated EBITDA pursuant to this clause (xiv),

 

(xv)                           cash expenses relating to earn outs and similar obligations, and

 

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(xvi)                        all costs and expenses incurred in connection with the Credit Documents and the ECA Credit Documents; and

 

(B) subtracting therefrom the following to the extent added in calculating such Consolidated Net Income: (i) any extraordinary gains for such period, (ii) any gains from the sales of any Vessels for such period and (iii) any gains realized on disposition of property not in the ordinary course.

 

Unless otherwise agreed to by the Facility Agent, f or purposes of this definition of “Consolidated EBITDA,” “non-recurring” means any expense, loss or gain as of any date that (x) did not occur in the ordinary course of the Parent or its Subsidiaries’ business; (y) is of a nature and type that has not occurred in the prior two years and is not reasonably expected to recur in the future; and (z) any fees, expenses or charges related to any equity offering, investment or Indebtedness or amendments thereto permitted by this Agreement, whether or not consummated.

 

“ Consolidated Leverage Ratio ” shall mean, at any date of determination, the ratio of Consolidated Net Indebtedness of the Parent and its Subsidiaries on such date to Consolidated Total Capitalization of the Parent and its Subsidiaries on such date.

 

“ Consolidated Net Income ” shall mean, for any period, the consolidated net after tax income of the Parent and its Subsidiaries for such period determined in accordance with GAAP; provided that for purposes of calculating Consolidated Net Income in connection with Section 8.04(b)(ii) (x) Consolidated Net Income shall be adjusted by adding thereto the non-cash charges set forth on Schedule X to the extent deducted in determining consolidated net after-tax income for such period and (y) any gain on the sale of assets which are designated by Parent as being included in the Excess Asset Sale Proceeds Amount shall be excluded.

 

“ Consolidated Net Indebtedness ” shall mean, with respect to any Person, as at any relevant date, (x) the aggregate outstanding principal amount of the Loans under this Agreement and the loans under the ECA Credit Agreements, plus (y) the aggregate outstanding principal amount of any other Indebtedness of the Parent or any of its Subsidiaries permitted pursuant to Section 8.05(g), less (z) an amount equal to the Unrestricted Cash and Cash Equivalents of the Parent and its Subsidiaries as at such date.

 

“ Consolidated Tangible Net Worth ” shall mean, at any time of determination for any Person, the Net Worth of such Person and its Subsidiaries at such time determined on a consolidated basis in accordance with GAAP minus goodwill.

 

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

 

“ Contingent Obligation ” shall mean, as to any Person, any obligation of such Person guaranteeing or intended to guarantee any Indebtedness (“ 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, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to

 

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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, (iii) 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 (iv) 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.

 

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

 

“ Credit Document Obligations ” shall mean, except to the extent consisting of obligations, liabilities or indebtedness with respect to Interest Rate Protection Agreements, the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, principal, premium, interest, fees and indemnities (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding)) (other than an Excluded Swap Obligation) of each Credit Party to the Lender Creditors (provided, in respect of the Lender Creditors which are Lenders, such aforementioned obligations, liabilities and indebtedness shall arise only for such Lenders (in such capacity) in respect of Loans and/or Commitments), whether now existing or here-after incurred under, arising out of, or in connection with this Agreement and the other Credit Documents to which such Credit Party is a party (including, in the case of each Credit Party that is a Subsidiary Guarantor, all such obligations, liabilities and indebtedness of such Credit Party under the Subsidiaries Guaranty) (other than Excluded Swap Obligations) and the due performance and compliance by such Credit Party with all of the terms, conditions and agreements contained in this Agreement and in such other Credit Documents.

 

“ Credit Facility ” shall mean the senior secured term loan facility in the aggregate principal amount of up to $581,000,000 provided under this Agreement.

 

“ Credit Party ” shall mean the Parent, the Borrower, each Subsidiary Guarantor, and any other Subsidiary of the Parent which at any time executes and delivers any Credit Document (other than solely an acknowledgment of a pledge of such Person’s equity).

 

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“ Debt Service Reserve Account ” shall mean any account, which account shall be blocked and reserved for payments of debt service under each ECA Credit 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.

 

“ Dividend ” shall mean, with respect to any Person, a dividend, distribution or return of any equity capital to its stockholders, partners or members, any other distribution, payment or delivery of property or cash to its stockholders, partners or members in their capacity as such (other than common stock, and the right to purchase any of such stock of such Person), the redemption, retirement, purchase or acquisition, 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 the setting aside of any funds for any of the foregoing purposes, or the granting of permission to 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 or any other Equity Interests of 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), including Stock Buy-Backs except for share repurchases resulting from the unwinding of any share sale requiring the repayment of any advances in connection with such sale as a result of any default on payment on the part of the ultimate purchaser of such shares.  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.  For the avoidance of doubt, (i) any non-cash anti-dilution adjustments under the warrants listed on Schedule VIII shall not constitute a Dividend and (ii) payments under the indemnification provisions of the Merger Agreement shall constitute a Dividend.

 

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

 

“ Earnings and Insurance Collateral ” shall mean all “Earnings Collateral” and “Insurance Collateral”, as the case may be, as defined in the Global Assignment Agreement.

 

“ ECA Agent ” shall mean each “Facility Agent”, “Security Agent”, “Joint Global Co-ordinator” under and as defined in each ECA Credit Agreement.

 

“ ECA Collateral Vessels ” shall mean the “Collateral Vessels” as defined in each ECA Credit Agreement.

 

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“ ECA Credit Agreements ” shall mean (i) a delayed-draw senior secured credit facility in the aggregate principal amount of up to $391,301,550 to be provided by The Export-Import Bank of China and the lenders party thereto (and guaranteed by a 95% comprehensive risk insurance from China Export and Credit Insurance Corporation) to the borrower and guaranteed by the Parent and the other guarantors party thereto and (ii) a delayed-draw senior secured credit facility (the “ K-Sure Facility ”) in the aggregate principal amount of up to $963,743,455 (which includes KEXIM Premium and K-Sure Premium) (each as defined in the K-Sure Facility) to be provided by The Export-Import Bank of Korea/Korean Eximbank, Korea Trade Insurance Corporation, the lenders party thereto and certain other ECA lenders to the borrower and guaranteed by the Parent and the other guarantors party thereto, in each case, upon the terms set forth in the Commitment Letter.

 

“ ECA Credit Documents ” shall mean the “Finance Documents” under and as defined in each ECA Credit Agreement.

 

“ ECP ” shall have the meaning assigned to such in the definition of Excluded Swap Obligation.

 

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

 

“ Eligible Transferee ” shall mean and include a commercial bank, insurance company, financial institution, fund 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 (i) none of the Borrower, the Guarantors nor any of their respective Affiliates shall be an Eligible Transferee at any time and (ii) no natural person shall be an Eligible Transferee.

 

“ Environmental Claims ” shall mean any and all administrative, regulatory or judicial actions, suits, demands, demand letters, directives, 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 requirements, 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 Parent or any of its Subsidiaries, relating to the environment or to Hazardous Materials, including, without limitation, CERCLA; OPA; the Federal Water Pollution

 

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Control 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 it regulates occupational exposure to Hazardous Materials); any applicable state, foreign, international or local 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.

 

“ Environmental Release ” shall mean any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing into the environment.

 

“ Equity Interests ” of a Person shall mean any and all shares, interests, rights to purchase, warrants, options, participations or offer 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 interest.

 

“ Equity Proceeds Amount ” shall mean, on any date, the amount of Net Cash Proceeds received by the Parent from the issuance of Equity Interests of the Parent after the Closing Date less the amount of Dividends paid by the Parent and any cash payments in respect of BlueMountain Indebtedness made pursuant to Section 8.04(d) prior to such date.

 

“ ERISA ” shall mean the U.S. Employee Retirement Income Security Act of 1974, as amended 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 Parent or a Subsidiary of the Parent would be deemed to be a “single employer” within the meaning of Section 414(b), (c), (m) or (o) of the Code.

 

“ Eurodollar Rate ” shall mean with respect to each Interest Period for a Loan, the 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 (or the successor thereto if the ICE Benchmark Administration is no longer making a London Interbank Offered Rate available)) (the “ Screen Rate ”); provided that if the Screen Rate shall be less than zero, such rate shall be deemed to be zero for the purpose 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 Facility 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

 

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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 if the Eurodollar Rate calculated in the immediately preceding proviso shall be less than zero, the Eurodollar Rate for such period will be deemed to be zero for 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 of the event giving rise to such damage; 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 effecting any such event.  Notwithstanding the foregoing, if such Collateral Vessel shall have been returned to the Borrower or any Subsidiary Guarantor following any event referred to in clause (y) above prior to the date upon which payment is required to be made under Section 4.02(b) hereof, no Event of Loss shall be deemed to have occurred by reason of such event.

 

“ Excess Asset Sale Proceeds Amount ” shall mean the amount of net cash proceeds received by the Parent and its Subsidiaries from the sale of any assets consummated on or after the Closing Date (after the payment of any Indebtedness required to be repaid as a consequence of the sale of such assets), which are designated by the Parent at any time after such sale to be included in the Excess Asset Sale Proceeds Amount; provided that the Parent may not make such a designation if a Restricted Payment has been made under Section 8.04(b) and such Restricted Payment would not have been permitted under such Section if such amount of gain from the sale of such assets had been excluded from Consolidated Net Income at the time such Restricted Payment was made.

 

“ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended.

 

“ Excluded Swap Obligation ” shall mean, with respect to any Credit Party, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Credit Party of, or the grant by such Credit Party 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 Credit Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder (each an “ECP”) at the time the Guaranty of such Credit Party 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

 

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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 the 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(e) and (d) any U.S. federal withholding Taxes imposed under FATCA.

 

“ Existing Credit Agreements ” shall have the meaning provided in the Recitals.

 

“ Existing Indebtedness ” shall have the meaning provided in Section 6.19.

 

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

 

“ Fair Market Value ” shall mean in relation to a Collateral Vessel or any other Vessel, at any date, the fair market value of that Collateral Vessel or Vessel shown by the arithmetic mean of the valuations contained in two Appraisals each:

 

(a)                                  as at a date not more than 14 Business Days previously;

 

(b)                                  prepared by Approved Appraisers which shall be selected by the Parent;

 

(c)                                   for and addressed to the Facility Agent (provided that if such valuations differ by more than 15% of the lower valuation, a third Appraisal shall be obtained from another Approved Appraiser selected by the Facility Agent and the Fair Market Value shall be the arithmetic mean of the valuations contained in the three Appraisals);

 

(d)                                  with or without physical inspection of that Collateral Vessel or vessel (as the Facility Agent may require); and

 

(e)                                   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 Fair Market Value in such Appraisal shall be deemed to be the median of such values.

 

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“ 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 to implement the foregoing or any legislation implementing the foregoing.

 

“ Federal Funds Rate ” shall mean, for any day, an interest 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 Facility Agent from three Federal funds brokers of recognized standing selected by the Facility Agent in its sole discretion.

 

“ Fee Letters ” shall mean (i) the arrangement fee letter, dated as of June 12, 2015, among the Mandated Lead Arrangers and the Parent, as amended along with the joinder agreement dated July 27, 2015 supplemental thereto, and (ii) any letter agreement between the Facility Agent and any Credit Party with respect to fees payable in connection with this Agreement.

 

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

 

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

 

“ 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 transfer:

 

(i)                                      On each Flag Jurisdiction Transfer Date, the Credit Party 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 Vessel ”) and such Collateral Vessel Mortgage shall be effective to create in favor of the Collateral Agent and/or the Lenders a legal, valid and enforceable first priority security interest, in and lien upon such Transferred Vessel, subject only to Permitted Liens.  All filings, deliveries of instruments and other actions necessary or desirable in the reasonable opinion of the Collateral Agent to perfect and preserve such security interests shall have been duly effected and the Collateral Agent shall have received evidence thereof in form and substance reasonably satisfactory to the Collateral Agent;

 

(ii)                                   On each Flag Jurisdiction Transfer Date, the Facility Agent shall have received from counsel to the Credit Parties consummating the relevant Flag Jurisdiction

 

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Transfer reasonably satisfactory to the Facility Agent practicing in those jurisdictions in which the Transferred Vessel is registered and/or the Credit Party owning such Transferred Vessel is organized, opinions which shall be addressed to the Facility 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 Facility 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 Facility Agent may reasonably request ;

 

(iii)                                On each Flag Jurisdiction Transfer Date:

 

(A)                                the Facility 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 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 Vessel transferred on such date, indicating no record liens other than Liens in favor of the Collateral Agent and/or the Lenders and Permitted Liens, and

 

(B)                                the Facility Agent shall have received a certificate reasonably satisfactory to the Facility Agent, from a firm of independent marine insurance brokers reasonably acceptable to the Facility Agent with respect to the insurance maintained by the Credit Party in respect of the Transferred Vessel transferred on such date 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 Collateral Agent as mortgagee and (ii) conform with the insurance requirements of the respective Collateral Vessel Mortgages;

 

(iv)                               On or prior to each Flag Jurisdiction Transfer Date, the Facility Agent shall have received a certificate, dated the Flag Jurisdiction Transfer Date, 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 the Credit Party commencing such Flag Jurisdiction Transfer, certifying that (A) all necessary governmental (domestic and foreign) and third party approvals and/or consents 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, (B) 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 (C) copies of resolutions approving the Flag Jurisdiction Transfer of such Credit Party and any other matters the Facility Agent may reasonably request;

 

(v)                                  On each Flag Jurisdiction Transfer Date, the Collateral and Guaranty Requirements, as applicable, for the Transferred Vessel shall have been satisfied; and

 

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(vi)                               On each Flag Jurisdiction Transfer Date, (a) no Event of Default has occurred and is continuing and (b) 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.

 

“ 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 Parent or any one or more of its Subsidiaries primarily for the benefit of employees of the Parent 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).

 

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

 

“ 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.

 

“ Guaranteed Creditors ” shall mean and include each of the Facility Agent, the Collateral Agent and the Lenders.

 

“ Guarantors ” shall mean the Parent and each Subsidiary Guarantor.

 

“ Guaranty ” shall mean, collectively, the Parent Guaranty and the Subsidiaries Guaranty.

 

“ Hazardous Materials ” shall mean: (a) any petroleum or petroleum products, radioactive materials, asbestos 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 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 Environmental Laws.

 

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“ Immaterial Subsidiary ” shall mean any Subsidiary or group of Subsidiaries of the Parent, the total assets of which account for less than 5.0% of consolidated total assets of the Parent and its Subsidiaries and 5% of Consolidated EBITDA of the Parent and its Subsidiaries; provided that in no event shall Immaterial Subsidiaries include any Credit Party.

 

“ Indebtedness ” shall mean, as to any Person, without duplication, (i) all indebtedness (including principal, interest, fees and charges) of such Person for borrowed money or for the deferred purchase price of property or services, (ii) the maximum amount available to be drawn under all letters of credit issued for the account of such Person and all unpaid drawings in respect of such letters of credit, (iii) all Indebtedness of the types described in clause (i), (ii), (iv), (v), (vi) or (vii) of this definition secured by any Lien on any property owned by such Person, whether or not such Indebtedness has been assumed by such Person (to the extent of the value of the respective property), (iv) the aggregate amount required to be capitalized under leases under which such Person is the lessee, (v) all obligations of such person to pay a specified purchase price for goods or services, whether or not delivered or accepted, i.e. , take-or-pay and similar obligations, (vi) all Contingent Obligations of such Person, and (vii) all obligations under any Interest Rate Protection Agreement or Other Hedging Agreement or under any similar type of agreement; provided that Indebtedness shall in any event not include trade payables and expenses accrued in the ordinary course of business.

 

“ 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 the Borrower under any Credit Document and (b) to the extent not otherwise described in (a), Other Taxes.

 

“ Intercompany Ship Delivery Agreement ” shall mean the Ship Delivery Agreement, to be entered into between Parent, Gener8 Maritime Subsidiary Inc., Gener8 Maritime Subsidiary VII Inc. and Gener8 Maritime Subsidiary VIII Inc.

 

“ 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 Expense Coverage Ratio ” shall mean, for any period, the ratio of (a) Consolidated EBITDA for such period to (b) Consolidated Cash Interest Expense for such period.

 

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

 

“ Interest Rate Protection 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 interest rate fluctuations under this Agreement.

 

“ 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.

 

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“ 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”.

 

“ Judgment Currency ” shall have the meaning provided in Section 12.09(a).

 

“ Judgment Currency Conversion Date ” shall have the meaning provided in Section 12.09(a).

 

“ 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 a Commitment 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 Facility Agent and the Collateral Agent, each in their respective capacities.

 

“ Lender Default ” shall mean, as to any Lender, (i) 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, (ii) such Lender having been deemed insolvent or having become the subject of a bankruptcy or insolvency proceeding or a takeover by a regulatory authority, or (iii) such Lender having notified the Facility Agent and/or any Credit Party (x) that it does not intend to comply with its obligations under Section 2.01 in circumstances where such non-compliance would constitute a breach of such Lender’s obligations under the respective Section or (y) of the events described in preceding clause (ii); 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 Facility Agent believes in good faith has occurred and is continuing, and (iv) the failure of such Lender to make

 

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available its portion of any Borrowing within one (1) Business Day of the date (x) the Facility 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 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).

 

“ Mandated Lead Arrangers ” shall mean Nordea, Citibank, N.A., DNB Markets, Inc., DVB Bank SE, NIBC Bank N.V. and Skandinaviska Enskilda Banken AB (publ), in their capacities as mandated lead arrangers and bookrunners in respect of the Credit Facility.

 

“ Margin Regulations ” shall mean the provisions of Regulations T, U and X of the Board of Governors of the Federal Reserve System.

 

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

 

“ Market Disruption Event ” shall mean either of the following events with respect to any Loans:

 

(i)                                        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 Facility Agent to determine the Eurodollar Rate for the relevant Interest Period; or

 

(ii)                                     before close of business in New York on the Interest Determination Date for the relevant Interest Period, the Facility Agent receives notice from a Lender or Lenders the sum of whose outstanding Loans in the aggregate exceed 50% of the Loans that (a) 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 (b) such Lenders are unable to obtain funding in the London interbank Eurodollar market.

 

“ Material Adverse Effect ” shall mean a material adverse effect on:

 

(a)        the business, property, assets, liabilities, condition (financial or otherwise) of any Credit Party and its Subsidiaries taken as a whole,

 

(b)        the validity or enforceability of, or the effectiveness or ranking of any Lien granted or intended to be granted pursuant to any of, the Credit Documents or the rights and remedies of the Facility Agent, the Collateral Agent or any Lender under any Credit Documents; or

 

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(c)        the ability of any Credit Party and its Subsidiaries, taken as a whole, to perform its or their obligations under any Credit Document.

 

“ Maturity Date ” shall mean September 3, 2020.

 

“ Merger ” shall have the meaning set forth in the recitals to this Agreement.

 

“ Merger Agreement ” shall have the meaning set forth in the recitals to this Agreement.

 

“ Minimum Borrowing Amount ” shall mean $1,000,000.

 

“ Minimum Liquidity Account ” shall mean the account listed as the “Minimum Liquidity Account” on Annex F to the Pledge Agreement (as updated from time to time).

 

“ Minimum Liquidity Amount ” shall mean an amount equal to the greater of: (a) $50,000,000 and (b) 5.0% of Total Indebtedness.

 

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

 

“ 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.

 

“ Navig8 Group ” shall mean Navig8 Ltd. and its affiliates.

 

“ Net Cash Proceeds ” shall mean, (x) with respect to any Collateral Disposition, the aggregate cash payments (including any cash received by way of deferred payment pursuant to a note receivable issued in connection with such Collateral Disposition, other than the portion of such deferred payment constituting interest, but only as and when received) received by the Parent or the Borrower or any of their respective Subsidiaries from such Collateral Disposition net of (i) reasonable transaction costs (including, without limitation, reasonable attorney’s fees) and sales commissions and (ii) the estimated marginal increase in income taxes and any stamp tax payable by the Parent, the Borrower or any of its Subsidiaries as a result of such Collateral Disposition and (y) with respect to the issuance of any Equity Interests, the aggregate cash proceeds received by the Parent from such equity issuance net of reasonable transaction costs related thereto (including, without limitation, reasonable attorney’s fees).

 

“ 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

 

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account which, in accordance with GAAP, constitutes stockholders’ equity, but excluding treasury stock and the effect of any impairment of intangible assets on and after the Closing Date.

 

“ 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 of Interest Period Election ” shall have the meaning provided in Section 2.07(a).

 

“ Notice Office ” shall mean the office of the Facility Agent located at 437 Madison Avenue, 21 st  Floor, New York, NY 10022, or such other office as the Facility Agent may hereafter designate in writing as such to the other parties hereto.

 

“ Obligation Currency ” shall have the meaning provided in Section 12.09(a).

 

“ Obligations ” shall mean the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of (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.

 

“ OFAC ” shall have the meaning provided in Section 6.15(b).

 

“ 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 Credit Party 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).

 

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“ Original Fair Market Value ” shall mean the Fair Market Value of the Collateral Vessels, as determined by reference to the Appraisals delivered pursuant to Section 5.01(o).

 

“ 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 any Lender or any affiliate thereof and their successors and assigns if any (even if such Lender subsequently ceases to be a Lender under this Agreement for any reason), with which the Parent, the Borrower or any Subsidiary Guarantor enters into any Interest Rate Protection Agreements or Other Hedging Agreements from time to time.

 

“ Other Obligations ” shall mean all obligations, liabilities and indebtedness (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Credit Party at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding, but excluding for the avoidance of doubt, any Excluded Swap Obligations) owing by any Credit Party to the Other Creditors under, or with respect to (including, in the case of any Subsidiary Guarantor, all such obligations (other than Excluded Swap Obligations), liabilities and indebtedness under the Subsidiaries Guaranty), any Interest Rate Protection Agreement or Other Hedging Agreement, whether such Interest Rate Protection Agreement or Other Hedging Agreement is entered into on the Closing Date or anytime thereafter, and the due performance and compliance by such Credit Party with all of the terms, conditions and agreements contained therein.

 

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

 

“ Other Hedging Agreement ” shall mean any foreign exchange contracts, currency swap agreements, commodity agreements or other similar agreements or arrangements designed to protect against the fluctuations in currency or commodity values.

 

“ Parent ” shall have the meaning set forth in the introductory paragraph hereto.

 

“ Parent Guaranty ” shall mean the guaranty of the Parent pursuant to Section 12.

 

“ 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.

 

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“ Payment Office ” shall mean the office of the Facility Agent located at 437 Madison Avenue, 21 st  Floor, New York, NY 10022, or such other office as the Facility 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 BlueMountain Refinancing Indebtedness ” shall mean any Indebtedness of Parent issued or given in exchange for, or the proceeds of which are used to, extend, refinance, renew, replace or refund the BlueMountain Indebtedness, so long as (a) such Indebtedness has a weighted average life to maturity greater than or equal to the weighted average life to maturity of the BlueMountain Indebtedness, (b) such extension, refinancing, renewal, replacement or refunding does not (i) increase the amount of the BlueMountain Indebtedness outstanding immediately prior to such extension, refinancing, renewal, replacement or refunding (it being understood and agreed that any premium due under the BlueMountain Indebtedness shall not constitute an increase in the amount of BlueMountain Indebtedess) or (ii) add guarantors, obligors or security from that which applied to the BlueMountain Indebtedness on the date hereof, and (c) such Indebtedness otherwise complies with the BlueMountain Indebtedness Requirements.

 

“ Permitted Encumbrance ” shall mean easements, rights-of-way, restrictions, encroachments, exceptions to title and other similar charges or encumbrances on any Collateral Vessel or any other property of the Parent or any of its Subsidiaries arising in the ordinary course of business which do not materially detract from the value of such Collateral Vessel or the property subject thereto.

 

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

 

“ Pledge Agreement Collateral ” shall mean all “Collateral” as defined in the Pledge Agreement and in the Bermuda Share Charge.

 

“ Pledged Securities ” shall mean “Securities” as defined in the Pledge Agreement and “Charged Share” as defined in the Bermuda Share Charge pledged (or required to be pledged) pursuant thereto.

 

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“ Projections ” shall mean the Parent’s forecasted consolidated and consolidating:  (a) balance sheets; (b) profit and loss statements; (c) cash flow statements and (d) capitalization statements, all prepared on a Subsidiary by Subsidiary basis and based upon good faith estimates and assumptions believed by the Parent to be reasonable at the time made, together with appropriate supporting details and a statement of underlying assumptions.

 

“ Qualified Preferred Stock ” shall mean any preferred stock so long as the terms of any such preferred stock (i) do not contain any mandatory put, redemption, repayment, sinking fund or other similar provision occurring prior to one year after the Maturity Date, (ii) do not require the cash payment of dividends and (iii) any other preferred stock that (x) satisfies clause (i) of this definition of Qualified Preferred Stock and (y) that is otherwise issuable or may be distributed pursuant to a shareholders’ rights plan of the Parent; provided , however , any Dividend or similar feature of such Qualified Preferred Stock shall only be declared and paid in accordance with Section 8.04.

 

“ 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.

 

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

 

“ Reference Banks ” shall mean, at any time, (i) if there are less than two Lenders at such time, each Lender and (ii) if there are three or more Lenders at such time, each Mandated Lead Arranger and one other Lender as shall be determined by the Facility Agent.

 

“ Refinancing ” shall have the meaning set forth in the Recitals.

 

“ 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.

 

“ Related Fund ” shall have the meaning provided in Section 11.04(b).

 

“ Remaining Shipyard Payments ” shall mean, as of any date, (i) the aggregate delivery cost of all vessels financed pursuant to the ECA Credit Agreements minus (ii) the aggregate amounts paid by the Parent or its subsidiaries prior to such date minus (iii) the

 

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aggregate principal amount of loans and unfunded commitments under the ECA Credit Agreements.  For the avoidance of doubt, if the Remaining Shipyard Payments are negative, the Remaining Shipyard Payments shall be deemed to be zero.

 

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

 

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

 

“ 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.

 

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

 

“ Required Lenders ” shall mean, at any time, prior to the repayment in full of the Loans, Non-Defaulting Lenders the sum of whose outstanding Loans at such time represents an amount greater than 66-2/3% of the sum of all outstanding Loans of Non-Defaulting Lenders.

 

“ Restricted Payment ” shall have the meaning provided in Section 8.04.

 

“ 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 country or territory which is subject to Sanctions Laws, which attach legal effect to being domiciled, registered as located in or having its main place of business in such country; (c) that is directly or indirectly owned or 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 6.09(b).

 

“ S&P ” shall mean Standard & Poor’s Rating Services, a division of the McGraw-Hill Companies Inc. and its successors.

 

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

 

“ Sanctions Authority ” shall mean 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 Consul of the U.S. Department of treasury, the U.S. Department of State and Her Majesty’s Treasury of the United Kingdom.

 

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“ Sanctions List ” shall mean any list of designated or prohibited persons, entities or vessels published in connection with Sanctions Laws by or on behalf of any Sanctions Authority.

 

“ Scheduled Repayment ” shall have the meaning provided in Section 4.02(a).

 

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

 

“ SEC ” shall mean the Securities and Exchange Commission (or any successor thereto).

 

“ Secured Creditors ” shall mean the “Secured Creditors” as defined in the Security Documents.

 

“ Secured Obligations ” shall mean (i) the Credit Document Obligations, (ii) the Other Obligations, (iii) any and all sums advanced by the Collateral Agent in order to preserve the Collateral or preserve its security interest in the Collateral, (iv) in the event of any proceeding for the collection or enforcement of any indebtedness, obligations or liabilities of the Credit Parties referred to in clauses (i) and (ii) 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 Collateral Agent of its rights hereunder, together with reasonable attorneys’ fees and court costs, and (v) 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 Documents ” shall mean the Pledge Agreement, the Bermuda Share Charge, the Global Assignment Agreement, the Assignment of Hedging Agreements, each Collateral Vessel Mortgage and, after the execution and delivery thereof, each additional first-lien security document executed pursuant to Section 7.11.

 

“ Solvent ” shall mean, with respect to any Person on a particular date, that on such date (a) the sum of the fair value of the assets, at a fair valuation, of such Person (on a stand-alone basis) and of such Person and its Subsidiaries (taken as a whole) will exceed its or their respective debts, (b) the sum of the present fair salable value of the assets of such Person (on a stand-alone basis) and of such Person and its Subsidiaries (taken as a whole) will exceed its or their respective debts, (c) such Person (on a stand-alone basis) and such Person and its Subsidiaries (taken as a whole) has or have not incurred and does or do not intend to incur, and does or do not believe that it or they will incur, debts beyond its or their respective ability to pay such debts as such debts mature and (d) such Person (on a stand-alone basis) and such Person and its Subsidiaries (taken as a whole) will have sufficient capital with which to conduct its or their respective businesses.  For purposes of this definition, “debt” means any liability on a claim, and “claim” means (a) 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 (b) right to an equitable remedy for breach of

 

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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.

 

“ Stock Buy-Back ” shall mean, with respect to any Person, that such Person or any Subsidiary of such Person shall have redeemed, retired, purchased or otherwise acquired, directly or indirectly, for a consideration (other than common stock, Qualified Preferred Stock or the right to purchase any such stock of such Person), any shares of any class of its capital stock or membership interests outstanding on or after the Closing Date (or any options or warrants issued by such Persons with respect to its capital stock).

 

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

 

“ 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 a 50% equity interest at the time.

 

“ Subsidiary Guarantor ” shall mean, at any time, each direct and indirect Subsidiary of the Parent (other than the Borrower) which owns a Collateral Vessel or which owns, directly or indirectly, any of the Equity Interests of the Borrower or any such direct or indirect Subsidiary at such time.  The Subsidiary Guarantors as of the Closing Date are listed on Schedule IX .

 

“ Swap Obligation ” shall mean, with respect to any Credit Party, 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 imposed with respect thereto.

 

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

 

“ Total Indebtedness ” shall mean, at any time, all Indebtedness of the Parent and its Subsidiaries at such time.

 

“ Transaction ” shall mean, collectively, (i) the entering into of this Agreement and the other Credit Documents, as applicable, on the Closing Date and the making of the Loans hereunder, (ii) the entering into of each ECA Credit Agreement and the other ECA Credit

 

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Documents, as applicable, on the Closing Date, and (iii) the payment of all fees and expenses in connection with the foregoing.

 

“ Transferred Vessel ” shall have the meaning provided in the definition of “Flag Jurisdiction Transfer” in this Section 1.

 

“ 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 Parent 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 Parent or of any such Subsidiary, (ii) are not subject to any Lien in favor of any Person other than the Collateral Agent for the benefit of the Secured Creditors and the ECA Agents for the benefit of the Secured Creditors under and as defined in the ECA Credit Agreements; provided that any cash or Cash Equivalents subject to such Liens shall be freely available to the Parent or such Subsidiary to be included in the Minimum Liquidity Amount, or (iii) are otherwise generally available for use by the Parent or such Subsidiary.

 

“ Vessel ” shall mean, collectively, all sea going vessels and tankers at any time owned by the Parent and its Subsidiaries, and, individually, any of such vessels.

 

“ Wholly-Owned Subsidiary ” shall mean, as to any Person, (i) 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 (ii) 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 a 100% equity interest at such time.

 

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”

 

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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 Credit Party shall be construed to include the Borrower or such Credit Party as debtor and debtor-in-possession and any receiver or trustee for the Borrower or any other Credit Party, 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 Facility .

 

2.01                         The Loans . (a) Subject to and upon the terms and conditions set forth herein, each Lender severally agrees to make a term loan or term loans (each, a “ Loan ” and, collectively, the “ Loans ”) to the Borrower, which Loans of such Lender:  (i) may only be incurred pursuant to a single drawing on the Closing Date, (ii) shall be denominated in Dollars and (iii) shall be in a principal amount equal to the lesser of (x) the Commitment of such Lender and (y) such Lender’s pro rata share of the Available Commitment.  Once repaid, Loans incurred hereunder may not be reborrowed.

 

(b)                                  The available commitment (the “ Available Commitment ”) under this Agreement shall be equal to the lesser of (i) $581,000,000 and (ii) 60% of the Original Fair Market Value of the Collateral Vessels.

 

2.02                         Notice of Borrowing .  Whenever the Borrower desires to incur Loans hereunder, it shall give the Facility Agent at the Notice Office at least three Business Days’ prior notice of each Loan to be incurred hereunder, provided that (in each case) any such notice shall be deemed to have been given on a certain day only if given before 12:00 Noon (New York time) on such day.  Each such written notice (each, a “ Notice of Borrowing ”), except as otherwise expressly provided in Section 2.08, shall be irrevocable and shall be given by the Borrower substantially in the form of Exhibit A-1, appropriately completed to specify and include:

 

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(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 the provisions of Section 2.01,

 

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

 

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

 

The Facility Agent shall promptly (and in no event less than three Business Days prior to the Closing 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 the Notice of Borrowing.

 

2.03                         Disbursement of Funds .  Except as otherwise specifically provided in the immediately succeeding sentence, no later than 12:00 Noon (New York time) on the date specified in each Notice of Borrowing, each Lender will make available its pro rata portion of each such Borrowing requested to be made on such date.  All such amounts shall be made available in Dollars and in immediately available funds at the Payment Office of the Facility Agent and the Facility Agent will make available to the Borrower (on such day to the extent of funds actually received by the Facility Agent prior to 12:00 Noon (New York time) on such day) at the Payment Office, in the account specified in the applicable Notice of Borrowing, the aggregate of the amounts so made available by the Lenders.  Unless the Facility Agent shall have been notified by any Lender prior to the date of Borrowing that such Lender does not intend to make available to the Facility Agent such Lender’s portion of any Borrowing to be made on such date, the Facility Agent may assume that such Lender has made such amount available to the Facility Agent on such date of Borrowing and the Facility Agent may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  If such corresponding amount is not in fact made available to the Facility Agent by such Lender, the Facility Agent shall be entitled to recover such corresponding amount on demand from such Lender.  If such Lender does not pay such corresponding amount forthwith upon the Facility Agent’s demand therefor, the Facility Agent shall promptly notify the Borrower and the Borrower shall immediately pay such corresponding amount to the Facility Agent.  The Facility Agent shall also be entitled to recover on demand from such Lender or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Facility Agent to the Borrower until the date such corresponding amount is recovered by the Facility 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.

 

2.04                         Notes .  (a)  The Borrower’s obligation to pay the principal of, and interest on, the Loans made by each Lender shall be evidenced in the Register maintained by the Facility Agent pursuant to Section 11.17 and shall, if requested by such Lender, also be evidenced by a promissory note duly executed and delivered by the Borrower substantially in the form of

 

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Exhibit B, with blanks appropriately completed in conformity herewith (each, a “ Note ” and, collectively, the “ Notes ”).

 

(b)                                  Each Note shall (i) be executed by the Borrower, (ii) be payable to such Lender or its registered assigns and be dated the Closing Date, (iii) be in a stated principal amount equal to the outstanding Loans of such Lender and be payable in the outstanding principal amount of 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 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 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 (c).  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.

 

2.05                         Pro Rata Borrowings .  All Borrowings of Loans under this Agreement shall be incurred from the Lenders pro rata on the basis of their Commitments.  The obligations of the Lender hereunder to make Loans and to make payments pursuant to Section 10.06 are several and not joint.  It is understood that no Lender shall be responsible for any default by any other Lender of its obligation to make Loans or make any payment under Section 10.06 hereunder and each Lender shall be obligated to make the Loans to be made by it hereunder regardless of the failure of any other Lender to make its Loans and payments hereunder.

 

2.06                         Interest .  (a)  The Borrower agrees to pay interest in respect of the unpaid principal amount of each Loan from the date the proceeds thereof are made available to the Borrower until the maturity (whether by acceleration or otherwise) of such Loan at a rate per

 

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annum which shall, during each Interest Period applicable thereto, be equal to the sum of the Applicable Margin and the Eurodollar Rate for such Interest Period, as in effect from time to time.

 

(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 rate which would have been payable if the overdue amount had, during the period of non payment, constituted a Loan for successive Interest Periods, each of a duration selected by the Facility Agent.  Any interest accruing under this Section 2.06(b) shall be immediately payable by the Borrower on demand by the Facility 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 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) on the last day of each Interest Period applicable thereto and, in the case of an Interest Period in excess of three months, on each date occurring at three 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 Facility 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.

 

2.07                         Interest Periods .  (a)  The Borrower shall give the Facility Agent at its Notice Office written notice at least three Business Days’ prior to (x) the Closing Date (in the case of the initial Interest Period applicable to any Loans) and (y) the expiration of an Interest Period applicable to such Loans (in the case of any subsequent Interest Period), which notice shall be deemed to have been given on a certain day only if given before 11:00 A.M. (New York time), electing the interest period (each an “ Interest Period ”) applicable to such Loan.  Each such written notice (each a “ Notice of Interest Period Election ”), except as otherwise expressly provided in Section 2.08, shall be irrevocable and shall be given by the Borrower in the form of Exhibit A-

 

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2, appropriately completed to specify (i) the aggregate principal amount of the Loans to be included in the Borrowing (if applicable), (ii) the commencement date of the applicable Interest Period (which shall be a Business Day) and (iii) at the option of the Borrower, whether the applicable Interest Period will be a one, three or six month period (or such other period as all the Lenders may agree); provided that:

 

(i)                                       there shall be no more than six different Interest Periods at any time, each of which shall be comprised of Loans in an amount of not less than the Minimum Borrowing Amount (or, if less, the aggregate principal amount of the Loans outstanding hereunder);

 

(ii)                                    the initial Interest Period for each Loan shall commence on the Closing Date of such Loan and each Interest Period occurring thereafter in respect of such Loan 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 longer than one month may be selected at any time when an Event of Default (or, if the Facility Agent or the Required Lenders have determined that such an election at such time would be disadvantageous to the Lenders, a Default) has occurred and is continuing;

 

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

 

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

 

If upon the expiration of any Interest Period applicable to a Borrowing of Loans, the Borrower has failed to deliver a Notice of Interest Period Election in respect of such Loans as provided above, the Borrower shall be deemed to have elected a three month Interest Period to be applicable to such Loans effective as of the expiration date of such current Interest Period.

 

(b)                                  Without in any way limiting the obligation of the Borrower to deliver a written Notice of Interest Period Election in accordance with Section 2.07(a), the Facility Agent may act without liability upon the basis of telephonic notice of such Interest Period election, believed by the Facility Agent in good faith to be from the President, the Treasurer or the Secretary of the Borrower (or any other officer of the Borrower designated in writing to the Facility Agent by the President, Treasurer or the Secretary of the Borrower as being authorized to give such notices under this Agreement) prior to receipt of Notice of Interest Period Election.

 

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In each such case, the Borrower hereby waives the right to dispute the Facility Agent’s record of the terms of such telephonic notice of such Interest Period election of Loans, absent manifest error.

 

2.08                         Increased Costs, Illegality, Market Disruption Event, etc .

 

(a) In the event that any Lender shall have determined in good faith (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto):

 

(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 or 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 Facility Agent of such determination (which notice the Facility 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 be final and conclusive and binding on all the parties hereto.  Each Lender, upon determining that any additional amounts will be payable

 

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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 2.11(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 Facility Agent telephonic notice (confirmed in writing) on the same date or the next Business Day that such Borrower was notified by the affected Lender or the Facility Agent pursuant to Section 2.08(a)(i) or (ii) or (y) if the affected Loan is then outstanding, upon at least three Business Days’ written notice to the Facility 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, 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 Facility 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 Facility Agent or the Borrower so require, the Facility Agent and the Borrower shall enter into negotiations (for a period of not more than thirty 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 Facility 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 Facility Agent may not disclose to any Lender any details of the rate notified to the Facility Agent by any other Lender acting as a Reference Bank for the purposes of Section 2.08(c) and (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

 

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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 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 Loans but excluding any loss of anticipated profits) which such Lender may sustain in respect of Loans made to the Borrower:  (i) if for any reason (other than a default by such Lender or the Facility Agent) the Loans are not drawn on a date specified therefor in a Notice of Borrowing, (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 Loans, or assignment of its 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 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 Loans or make payment on any Note held by such Lender when required by the terms of this Agreement.

 

2.10                         Change of Lending Office .  Each Lender agrees that on the occurrence of any event giving rise to the operation of Section 2.08(a)(ii), Section 2.08(b) or Section 4.04 with respect to such Lender, it will, if requested by the Borrower, use reasonable good faith efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans affected by such event, provided that such designation is made on such terms that such Lender and its lending office suffer no economic, legal or regulatory disadvantage, with the object of avoiding the consequence of the event giving rise to the operation of such Section.  Nothing in this Section 2.10 shall affect or postpone any of the obligations of the Borrower or the rights of any Lender provided in Section 2.08 or Section 4.04.

 

2.11                         Replacement of Lenders .  (a) (x)  If any Lender becomes a Defaulting Lender, (y) upon the occurrence of any event giving rise to the operation of Section 2.08(a)(i) or (ii), Section 2.08(b) or Section 4.04 with respect to any Lender which results in such Lender charging to the Borrower material increased costs in excess of those being generally charged by the other Lenders, or (z) as provided in Section 11.13(b) in the case of certain refusals 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, the Borrower shall have the right, if no Default or Event of Default will exist immediately after giving effect to the respective replacement, to either replace such Lender (the “ Replaced Lender ”) with one or more other Eligible Transferee or Eligible Transferees, none of whom shall constitute a Defaulting Lender at the time of such replacement (collectively, the “ Replacement Lender ”) reasonably acceptable to the Facility Agent; provided that:

 

(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 outstanding 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 an amount equal to the principal of, and all accrued interest on, all outstanding Loans of the Replaced Lender; and

 

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(ii)                                   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.

 

(b)                                  Upon receipt by the Replaced Lender of all amounts required to be paid to it pursuant to this Section 2.11, the Facility Agent shall be entitled (but not obligated) and is authorized (which authorization is coupled with an interest) to execute an Assignment and Assumption Agreement on behalf of such Replaced Lender, and any such Assignment and Assumption Agreement so executed by the Facility 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, 12.01 and 12.06), which shall survive as to such Replaced Lender and (ii) if so requested by the Borrower, the Replaced Lender shall deliver all Notes in its possession to the Borrower.

 

Section 3.                                            Fees; Reduction of Commitments .

 

3.01                         Fees .  The Borrower shall pay (i) to the Mandated Lead Arrangers, the fees set forth in the Fee Letters and (ii) to the Facility Agent, for the Facility Agent’s own account, such other fees as have been agreed to in writing by the Borrower and the Facility Agent.

 

3.02                         Mandatory Reduction of Commitments .                     The Commitment of each Lender shall terminate permanently in its entirety on the Closing Date (after giving effect to the incurrence of Loans on such date).

 

Section 4.    Prepayments; Payments; Taxes .

 

4.01                         Voluntary Prepayments .  The Borrower shall have the right to prepay, at any time, the Loans, without premium or penalty except as provided by law and Section 2.09, in whole or in part at any time and from time to time on the following terms and conditions:

 

(a)                            the Borrower shall give the Facility Agent, prior to 12:00 Noon (New York time) at its Notice Office, at least three Business Days’ prior written notice (including e-mail notice or telephonic notice promptly confirmed in writing) of its intent to prepay such Loans, the amount of such prepayment and the specific Borrowing or Borrowings pursuant to which such Loans were made, which notice the Facility Agent shall promptly transmit to each of the Lenders;

 

(b)                            each partial prepayment of Loans pursuant to this Section 4.01 shall be in an aggregate principal amount of at least $1,000,000 or such lesser amount of a Borrowing which is outstanding, provided that no partial prepayment of Loans made pursuant to any Borrowing shall reduce the outstanding Loans made pursuant to such Borrowing to an amount less than $1,000,000;

 

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(c)                             at the time of any prepayment of 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;

 

(d)                            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, upon five Business Days’ written notice to the Facility Agent at its Notice Office (which notice the Facility Agent shall promptly transmit to each of the Lenders), prepay all Loans, together with accrued and unpaid interest and other amounts owing to such Lender (or owing to such Lender with respect to each Loan which gave rise to the need to obtain such Lender’s individual consent) in accordance with said Section 11.13(b) so long as the consents required by Section 11.13(b) in connection with the prepayment pursuant to this clause (d) have been obtained;

 

(e)                             except as expressly provided in the preceding clause (d), each prepayment pursuant to this Section 4.01 in respect of any Loans made pursuant to a Borrowing shall be applied pro rata among the Loans comprising such Borrowing, provided that, at the Borrower’s election, in connection with any prepayment of Loans pursuant to this Section 4.01, such prepayment shall not be applied to any Loan of a Defaulting Lender until all other Loans of Non-Defaulting Lenders have been repaid in full; and

 

(f)                              each prepayment of principal of Loans pursuant to this Section 4.01 shall be applied to reduce the then remaining Scheduled Repayments in accordance with Section 4.02(e).

 

4.02                         Mandatory Repayments .  (a)  In addition to any other mandatory repayments pursuant to this Section 4.02, on each Payment Date (including, for the avoidance of doubt, the Maturity Date) set forth below, the Borrower shall be required to repay Loans to the extent then outstanding in the amount set forth opposite each such Payment Date in the table below (each such repayment, as the same may be reduced in accordance with Section 4.02(e), a “ Scheduled Repayment ”):

 

Payment Date		Amount
December 31, 2015		$	29,050,000.00
March 31, 2016		$	29,050,000.00
June 30, 2016		$	29,050,000.00
September 30, 2016		$	29,050,000.00
December 31, 2016		$	29,050,000.00
March 31, 2017		$	29,050,000.00
June 30, 2017		$	29,050,000.00
September 30, 2017		$	29,050,000.00
December 31, 2017		$	18,156,250.00
March 31, 2018		$	18,156,250.00
June 30, 2018		$	18,156,250.00
September 30, 2018		$	18,156,250.00
December 31, 2018		$	18,156,250.00
March 31, 2019		$	18,156,250.00
June 30, 2019		$	18,156,250.00
September 30, 2019		$	18,156,250.00
December 31, 2019		$	18,156,250.00
March 31, 2020		$	18,156,250.00
June 30, 2020		$	18,156,250.00
Maturity Date		$	148,881,250.00

 

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(b)                            In addition to any other mandatory repayments pursuant to this Section 4.02, but without duplication, on (i) the date of any Collateral Disposition involving a Collateral Vessel (other than a Collateral Disposition constituting an Event of Loss) and (ii) with respect to a Collateral Disposition constituting an Event of Loss, the earlier of (A) the date which is 120 days following such Event of Loss and (B) the date of receipt by the Borrower, any of its Subsidiaries or the Facility Agent of the insurance proceeds relating to such Event of Loss, the Borrower shall be required (subject to the first proviso below) to repay an aggregate principal amount of outstanding Loans in accordance with the requirements of Section 4.02(e) in an amount equal to the sum of the then outstanding aggregate principal amount of Loans multiplied by a fraction (x) the numerator of which is equal to the Fair Market Value (as determined in accordance with the most recent Appraisals delivered to the Facility Agent (or obtained by the Facility Agent) pursuant to Section 7.01(c) of the Collateral Vessel or Collateral Vessels which is/are the subject of such Collateral Disposition and (y) the denominator of which is equal to the Aggregate Collateral Vessel Value (as determined in accordance with the most recent Appraisals delivered to the Facility Agent (or obtained by the Facility Agent) pursuant to Section 7.01(c) prior to such Collateral Disposition; provided that without limiting anything otherwise provided for in this Agreement, the Borrower hereby acknowledges that it is obliged to comply with Section 8.07(d) at all times (including, without limitation, after giving effect to any repayment contemplated by the foregoing Section 4.02(a)).

 

(c)                             In addition to any other mandatory repayments pursuant to this Section 4.02, upon the occurrence of a default under Section 8.07(d), the Borrower shall be required to repay Loans in accordance with the requirements of Section 8.07(d) in an amount required to cure such default; 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 Lender may have as a result of an Event of Default under Section 8.07(d).

 

(d)                            All repayments of the Loans pursuant to Sections 4.01 and 4.02 shall be applied to the repayment of the Loans then outstanding on a pro rata basis.

 

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(e)                             The amount of all repayments of Loans pursuant to Sections 4.01, 4.02(b) and 4.02(c) shall be applied to reduce the then remaining Scheduled Repayments pro rata based upon the then remaining Scheduled Repayments after giving effect to all prior reductions thereto.

 

(f)                              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) all Loans with Interest Periods ending on such date of required repayment shall be paid in full prior to the payment of any other Loans and (ii) each repayment of any Loans comprising a Borrowing shall be applied pro rata among such Loans.  In the absence of a designation by the Borrower as described in the preceding sentence, the Facility Agent shall, subject to the preceding provisions of this clause (f), make such designation in its sole reasonable discretion with a view, but no obligation, to minimize breakage costs owing pursuant to Section 2.09.

 

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

 

(h)                            The Loans repaid pursuant to Section 4.01 and this Section 4.02 may not be reborrowed.

 

4.03                         Method and Place of Payment .  Except as otherwise specifically provided herein, all payments under this Agreement or any Note shall be made to the Facility Agent for the account of the Lender or Lenders entitled thereto not later than 12:00 Noon (New York time) on the date when due and shall be made in Dollars in immediately available funds at the Payment Office of the Facility Agent or such other office in the State of New York as the Facility Agent may hereafter designate in writing.  Whenever any payment to be made hereunder or under any Note shall be stated to be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest shall be payable at the applicable rate during such extension.

 

4.04                         Net Payments; Taxes .  (a) All payments made by any Credit Party hereunder or under any Note will be made without setoff, counterclaim or other defense.  All such payments will be made free and clear of, and without deduction or withholding for any Taxes imposed with respect to such payments unless required by applicable law. If applicable law requires the deduction or withholding of any Taxes from or in respect of any sum payable under any Note, then:

 

(i)                                      the Borrower shall be entitled to make such deduction or withholding,

 

(ii)                                   the Borrower shall pay the full amount deducted or withheld to the relevant taxing authority, and

 

(iii)                                in the case of any Indemnified Taxes or Other Taxes, the Borrower agrees to pay the full amount of such Indemnified Taxes and Other Taxes, and such additional amounts as may be necessary so that every payment of all amounts due under this Agreement or under any Note, after withholding or deduction for or on account of any Indemnified Taxes and Other Taxes, will not be less than the amount provided for herein or in such Note.

 

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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 Facility Agent), or by the Facility Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error. In the event the Borrower pays amounts deducted and withheld to the relevant taxing authority in respect of Indemnified Taxes, the Borrower will furnish to the Facility 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.  The Borrower agrees to indemnify and hold harmless each Lender, and reimburse such Lender upon its written request, for the amount of any Indemnified Taxes so levied or imposed and paid by such Lender.

 

(b)                                  Without duplicating the payments under subsection (a) above, the Borrower agrees to pay 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 a Borrower and (ii) the registration or presentation of a Note 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 Facility Agent, at the time or times reasonably requested by the Borrower or the Facility Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Facility 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 Facility Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Facility Agent as will enable the Borrower or the Facility 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 Facility Agent or a Lender determines in its sole discretion that it has actually received or realized a refund of any Indemnified Taxes or Other Taxes as to which it has been indemnified by a Credit Party or with respect to which such Credit Party has paid additional amounts pursuant to Section 4.04(a), it shall pay over such refund to such Credit Party

 

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(but only to the extent of indemnity payments made, or additional amounts paid, by such Credit Party under Section 4.04(a) with respect to the Indemnified Taxes or Other Taxes giving rise to such refund), net of all reasonable out-of-pocket expenses of the Facility Agent or such Lender (including any Taxes imposed with respect to such refund) as is determined in the sole discretion of the Facility 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 Facility Agent or such Lender is required to repay such refund to such Governmental Authority, then such Credit Party, upon the written request of the Facility Agent or such Lender, agrees to promptly repay the amount paid over to such Credit Party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority, but without any other interest, penalties or charges) to the Facility 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 Facility Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Facility 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 Facility Agent as may be necessary for the Borrower and the Facility 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 paragraph (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 Facility Agent shall be entitled to make deductions or withholding. “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

(f)                                    Each Lender shall severally indemnify the Facility Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes or Other Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Facility Agent for such Indemnified Taxes or Other 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 Facility 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 Facility Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Facility 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 Facility Agent to the Lender from any other source against any amount due to the Facility Agent under this paragraph (f).

 

(g)                                   Each party’s obligations under this Section 4.04 shall survive the resignation or replacement of the Facility Agent or any assignment of rights by, or the

 

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replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Credit Document.

 

4.05                         Application of Proceeds.             All monies collected by the Collateral Agent upon any sale or other disposition of the Collateral of each Credit Party, together with all other monies received by the Facility Agent or Collateral Agent under and in accordance with this Agreement and the other Credit Documents (except to the extent (i) such monies are for the account of the Facility Agent or Collateral Agent only or (ii) released in accordance with the applicable provisions of this Agreement or any other Credit Document), shall be applied to the payment of the Secured Obligations in accordance as follows:

 

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

 

(ii)  second , to the extent proceeds remain after the application pursuant to the preceding clause (i), an amount equal to the outstanding Credit Document Obligations shall be paid to the Lenders as provided in Section 4.05(d) hereof, with each Lender receiving an amount equal to such outstanding Credit Document Obligations or, if the proceeds are insufficient to pay in full all such Credit Document 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), an amount equal to the outstanding Other Obligations shall be paid to the Other Creditors as provided in Section 4.05(d) hereof, with each Other Creditor receiving an amount equal to such 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; and

 

(iv)  fourth , to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (iii), inclusive, and following the termination of this Agreement and the Credit Documents in accordance with their terms, to the relevant Credit Party 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 Other Obligations, as the case may be, and the denominator of which is the then outstanding amount of all Credit Document Obligations or 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.  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 Other Obligations, as the case may be, of the other Secured Creditors,

 

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with each Secured Creditor whose Credit Document Obligations or 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 Other Obligations, as the case may be, of such Secured Creditor and the denominator of which is the unpaid Credit Document Obligations or 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 Facility 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 Collateral Agent shall be entitled to rely upon (i) the Facility 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 Facility Agent, each Representative for any Other Creditors and the Secured Creditors agree (or shall agree) to provide upon request of the Collateral Agent) of the outstanding Credit Document Obligations and Other Obligations owed to the Lender Creditors or the Other Creditors, as the case may be.  Unless it has actual knowledge (including by way of written notice from an Other Creditor) to the contrary, the Collateral Agent, shall be entitled to assume that no Interest Rate Protection Agreements are in existence.

 

(f)                                    It is understood and agreed that each Credit Party 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 Credit Party.

 

Section 5.                                            Conditions to Closing Date .

 

5.01                         Conditions Precedent to the Closing Date .  The date on which each of the following conditions is satisfied shall be the “ Closing Date ”:

 

(a)                            Credit Agreement; Fee Letters .  The Credit Parties party thereto, the Facility Agent and each of the Lenders who are initially parties 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 Facility Agent.

 

(b)                            BlueMountain Indebtedness .  The Facility Agent shall have received true and correct copies of that certain amendment agreement dated on or about the date hereof (the “ Closing Date BlueMountain Amendment ”), amending the BlueMountain Indebtedness and any documentation relating thereto, which amendment and other documentation shall be in form and substance reasonably satisfactory to the Required Lenders. All conditions precedent to the Closing Date BlueMountain Amendment shall have been satisfied and after giving effect to the Closing Date BlueMountain Amendment, the BlueMountain Indebtedness Requirements shall be satisfied.

 

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

 

(d)                            Collateral and Guaranty Requirements .  On or prior to the Closing Date, the Collateral and Guaranty Requirements with respect to each Credit Party and each Collateral Vessel shall be satisfied.

 

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

 

(f)                              Refinancing; Surviving Indebtedness .  Prior to or substantially concurrently with the Closing Date, the Refinancing shall have been consummated and, after giving effect to the Transaction, the Parent and its Subsidiaries shall have no outstanding Indebtedness or contingent liabilities, except for (w) Indebtedness incurred pursuant to this Agreement, (x) indebtedness incurred pursuant to the ECA Credit Documents, (y) BlueMountain Indebtedness and (z) such other Existing Indebtedness and disclosed contingent liabilities (including any payments remaining to be made under any newbuilding construction contracts) of the Parent and its Subsidiaries, set forth on Schedule IV .

 

(g)                             PATRIOT Act .  The Credit Parties 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 Facility Agent in connection with their respective internal compliance regulations thereunder or other information requested by any Lender or the Facility 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 Facility Agent not later than five days prior to the Closing Date.

 

(h)                            Material Adverse Effect .  On and as of the Closing Date, nothing shall have occurred since December 31, 2014 (and neither the Facility Agent nor any of the Required Lenders shall have become aware of any condition or circumstance not previously known to them), which the Lenders determine has had or could reasonably be expected to have a Material Adverse Effect.

 

(i)                                Litigation .  On and as of the Closing Date, no litigation with respect to any Credit Party shall be pending or, to the knowledge of any Credit Party, threatened with respect to this Agreement or any other Credit Document or with respect to the Transaction or which the Facility Agent or the Required Lenders shall determine has had, or could reasonably be expected to have, a Material Adverse Effect.

 

(j)                               Fees .  On the Closing Date, the Borrower shall have paid to the Facility Agent, the Collateral Agent, the Mandated Lead Arrangers and the Lenders all Fees and all other reasonable fees and documented out-of-pocket costs and expenses (including, without limitation,

 

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the reasonable legal fees and expenses of White & Case LLP and other local counsel to the Facility Agent) and other compensation due and payable on or prior to the Closing Date, in each case, payable to the Facility Agent, the Collateral 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 Business Days prior to the Closing Date .

 

(k)                            Solvency Certificate .  On the Closing Date, the Parent shall cause to be delivered to the Facility Agent a solvency certificate from the Chief Financial Officer of the Parent, substantially in the form of Exhibit J, which shall be addressed to the Facility Agent and dated as of the Closing Date, setting forth the conclusion that, after giving effect to the Transaction and the incurrence of all the financings contemplated hereby, each Credit Party individually (after giving effect to rights of contribution and subrogation) and the Parent 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 mature.

 

(l)                                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 Facility Agent, restrains, prevents or imposes materially adverse conditions upon the consummation of the Transaction, the making of the Loans and the performance by the Credit Parties of the Credit Documents.  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 Credit Parties of the Credit Documents.

 

(m)                        No Default; Representations and Warranties .  On and as of the Closing Date, both before and after the making of the Loans, (i) there shall exist no Default or Event of Default 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).

 

(n)                            No Conflicts . On the Closing Date, after giving effect to the consummation of the Transaction, the making of the Loans and the performance by the Credit Parties 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 ECA Credit Document or any other material agreement to which the Borrower or any of its Subsidiaries is a party.

 

(o)                            Appraisals .  The Facility Agent shall have received Appraisals dated no more than 30 days prior to the Closing Date in scope, form and substance and from two Approved Appraisers, stating the current Fair Market Value of the Collateral Vessels.

 

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Section 6.                                                    Representations and Warranties .  In order to induce the Lenders to enter into this Agreement and to make the Loans, each of the Parent and the Borrower makes the following representations and warranties, in each case on the Closing Date after giving effect to the Transactions, all of which shall survive the execution and delivery of this Agreement and the Notes and the making of the 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):

 

6.01                         Corporate/Limited Liability Company/Limited Partnership Status .  Each Credit Party (i) is a duly organized and validly existing corporation, limited liability company or limited partnership, as the case may be, in good standing under the laws of the jurisdiction of its incorporation or formation, (ii) has the corporate or other applicable power and authority to own its property and assets and to transact the business in which it is currently engaged and presently proposes to engage, and (iii) is duly qualified and is authorized to do business and is in good standing in each jurisdiction where the conduct of its business as currently conducted requires such qualifications, except for failures to be so qualified which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

6.02                         Corporate Power and Authority; Legal Validity and Enforceability . (a) Each Credit Party has the corporate or other applicable power and authority to execute, deliver and perform the terms and provisions of each of the Credit Documents to which it is party and has taken all necessary corporate or other applicable action to authorize the execution, delivery and performance by it of each of such Credit Documents.  Each Credit Party 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 Credit Party enforceable against such Credit Party 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)                                        Each of the Security Documents creates in favor of the Collateral 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 Credit Parties party thereto in the Collateral described therein, subject only to Permitted Liens.  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, in each case, except for filings or recordings which shall have been made on or prior to the Closing Date.

 

(c)                                         None of the Credit Parties 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, in accordance with Section 5.

 

6.03                         No Violation .  Neither the execution, delivery or performance by any Credit Party of the Credit Documents to which it is a party, nor compliance by it with the terms and provisions thereof, will (i) contravene any material provision of any applicable law, statute, rule or

 

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regulation or any applicable order, judgment, writ, injunction or decree of any court or governmental instrumentality, (ii) conflict with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (except Permitted Liens) upon any of the material properties or assets of the Parent or any of its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other material agreement, contract or instrument, to which the Parent or any of its Subsidiaries is a party or by which it or any of its material property or assets is bound or to which it may be subject or (iii) violate any provision of the Organizational Documents of the Parent or any of its Subsidiaries.

 

6.04                         Governmental Approvals .  No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except as have been obtained or made or, in the case of any filings or recordings in respect of the Security Documents, will be made within 10 days of the date such Security Document is required to be executed pursuant hereto), or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with, (i) the execution, delivery and performance by any Credit Party 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.

 

6.05                         Financial Statements; Financial Condition; Undisclosed Liabilities .  (a)  (i) The audited consolidated balance sheets of the Parent as at December 31, 2014 and the related consolidated statements of income and cash flows for the fiscal year ended on such date and (ii) the unaudited consolidated balance sheets of the Parent as at June 30, 2015 and the related consolidated statements of income and cash flows, in each case for such quarterly accounting period, reported on by and accompanied by, in the case of the audited annual financial statements, an unqualified report from Deloitte & Touche LLP, present fairly the consolidated financial condition of the Parent as at such date, and the consolidated results of its operations and its consolidated cash flows for the respective fiscal years then ended.  All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as approved by the aforementioned firm of accountants and disclosed therein).  Neither the Parent nor any of its Subsidiaries has any material guarantee obligations, contingent liabilities and liabilities for taxes, or any long-term leases or unusual forward or long-term commitments, including any interest rate or foreign currency swap or exchange transaction or other obligation in respect of derivatives, that are not reflected in the financial statements referred to in the preceding sentence (it being understood that with respect to guarantee obligations, the underlying debt is so reflected).

 

(b)                                  Except as fully disclosed in the financial statements and the notes related thereto delivered pursuant to Section 6.05(a), there were as of the Closing Date no liabilities or obligations with respect to the Parent 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 Parent and its Subsidiaries taken as a whole.  As of the Closing Date, none of the Credit Parties 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 financial statements and the notes

 

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related thereto delivered pursuant to Section 6.05(a) which, either individually or in the aggregate, could reasonably be expected to be materially adverse to the Parent and its Subsidiaries taken as a whole.

 

(c)                                   The Projections delivered by the Parent to the Facility Agent and the Lenders prior to the Closing Date have been prepared in good faith and are based on GAAP and reasonable assumptions, and there are no statements or conclusions in such Projections which are based upon or include information known to the Parent on the Closing Date to be misleading in any material respect or which fail to take into account material information known to the Parent on the Closing Date regarding the matters reported therein.  On the Closing Date, the Parent believes that such Projections are reasonable and attainable, it being recognized by the Lenders, however, that projections as to future events are not to be viewed as facts and that the actual results during the period or periods covered by the Projections may differ from the projected results included in such Projections.

 

(d)                                  Since December 31, 2014, nothing has occurred that has had or could reasonably be expected to have a Material Adverse Effect.

 

6.06                         Litigation .  Except as set forth in the most recent S-1 Registration Statement of the Parent (filed with the SEC on June 22, 2015), there are no actions, suits, investigations (conducted by any governmental or other regulatory body of competent jurisdiction) or proceedings pending or, to the knowledge of the Parent or the Borrower, threatened against the Parent or any of its Subsidiaries (i) with respect to the Credit Documents or (ii) that could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

 

6.07                         True and Complete Disclosure .  All factual information (taken individually or as a whole) furnished by or on behalf of the Parent or the Borrower in writing to the Facility Agent or any Lender (including, without limitation, all information contained in the Credit Documents and any financial statement referred to in Section 6.05(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 individually or as a whole) hereafter furnished by or on behalf of the Parent or the Borrower in writing to the Facility 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.

 

6.08                         Use of Proceeds; Margin Regulations .  (a) All proceeds of the Loans shall be used for the Refinancing and to pay fees, costs and expenses relating to the Transactions.

 

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

 

(c)                                   No proceeds of the Loans shall be made available directly or indirectly to or for the benefit of a Restricted Party in violation of Sanctions Laws, nor shall they otherwise be

 

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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 being in violation of Sanctions Laws.

 

6.09                         Tax Returns and Payments .  (a)                     All payments which a Credit Party 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 Parent and each of its Subsidiaries has timely filed with the appropriate taxing authorities all material 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 Parent and/or any of its Subsidiaries (the “ Returns ”).  All such Returns accurately reflect in all material respects all liability for taxes of the Parent and its Subsidiaries as a whole for the periods covered thereby.  The Parent and each of its Subsidiaries have paid, or have provided adequate reserves (in accordance with GAAP) for the payment of, all taxes shown as due on all such Returns and all other material U.S. federal, state and non-U.S. taxes that have become due and payable.

 

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

 

(d)                                  As of the Closing Date, neither the Parent 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 Taxes of the Parent or any of its Subsidiaries, or is aware of any circumstances that would cause the taxable years or other taxable periods of the Parent or any of its Subsidiaries not to be subject to the normally applicable statute of limitations.

 

(e)                                   Neither the Parent nor any of its Subsidiaries (i) has engaged in any “listed transaction” within the meaning of Section 6011 of the Code or (ii) has any actual or potential liability for the taxes of any Person (other than the Parent or any of its present or former Subsidiaries) under the United States Treasury regulation Section 1.1502-6 (or any similar provision of state, local, foreign or provincial law).

 

6.10                         Compliance with ERISA . (a)(i)  Schedule VI sets forth, as of the Closing Date, each Plan.

 

(ii)                                   With respect to each Plan, other than any Multiemployer Plan (and each related trust, insurance contract or fund), there has been no failure to be in substantial compliance with its terms and with all applicable laws, including without limitation ERISA and the Code, that could reasonably be expected to give rise to a Material Adverse Effect.

 

(iii) Each Plan, other than any Multiemployer Plan (and each related trust, if any), which is intended to be qualified under Section 401(a) of the Code has received a determination letter (or an opinion letter) from the United States Internal Revenue Service to

 

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the effect that it meets the requirements of Sections 401(a) and 501(a) of the Code. No Reportable Event has occurred.

 

(iv)                               To the best knowledge of the Parent or any of its Subsidiaries or ERISA Affiliates no Plan which is a Multiemployer Plan is insolvent or in reorganization.

 

(v)                                  No Plan has an Unfunded Current Liability in an amount material to Borrower’s operation.  No Plan (other than a Multiemployer Plan) which is subject to Section 412 of the Code or Section 302 of ERISA has failed to satisfy minimum funding standards, or has applied for or received a waiver of the minimum funding standards or an extension of any amortization period, within the meaning of Section 412 or 430 of the Code or Section 302 or 303 of ERISA.

 

(vi)                               With respect to each Plan (other than a Multiemployer Plan) its actuary has certified that such Plan is not an at-risk plan within the meaning of Section 430 of the Code or Section 303 of ERISA; all contributions required to be made with respect to a Plan have been or will be timely made (except as disclosed on Schedule VI ).

 

(vii)                            Neither the Parent nor any of its Subsidiaries nor any ERISA Affiliate has incurred any material liability (including any indirect, contingent or secondary liability) to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 436(f), 4971 or 4975 of the Code or expects to incur any such liability under any of the foregoing sections with respect to any Plan.

 

(viii)                         No condition exists which presents a material risk to the Parent or any of its Subsidiaries or any ERISA Affiliate of incurring a liability to or on account of a Plan pursuant to the foregoing provisions of ERISA and the Code.

 

(ix)                               No proceedings have been instituted by the PBGC to terminate or appoint a trustee to administer any Plan (in the case of a Multiemployer Plan, to the best knowledge of the Parent or any of its Subsidiaries or ERISA Affiliates) 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 routine claims for benefits) is pending, or, to the best knowledge of the Parent or any of its Subsidiaries, expected or threatened which could reasonably be expected to have a Material Adverse Effect.

 

(xi)                               Using actuarial assumptions and computation methods consistent with Part 1 of subtitle E of Title IV of ERISA, the Parent and its Subsidiaries and ERISA Affiliates would have no liabilities to any Plans which are Multiemployer Plans in the event of a complete withdrawal therefrom in an amount which could reasonably be expected to have a Material Adverse Effect.

 

(xii)                            Neither the Borrower nor any of its Subsidiaries nor any ERISA Affiliate has received any notice that a Plan which is a Multiemployer Plan is in endangered or critical status under Section 305 of ERISA.

 

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(xiii)                         Each group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) which covers or has covered employees or former employees of the Parent, any of its Subsidiaries, or any ERISA Affiliate has at all times been operated in material compliance with the provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the Code.

 

(xiv)                        No lien imposed under the Code or ERISA on the assets of the Parent or any of its Subsidiaries or any ERISA Affiliate exists nor has any event occurred which could reasonably be expected to give rise to any such lien on account of any Plan.

 

(xv)                           The Parent and its Subsidiaries do not maintain or contribute to any employee welfare plan (as defined in Section 3(1) of ERISA) which provides benefits to retired employees or other former employees (other than as required by Section 601 of ERISA) or any Plan the obligations with respect to which could reasonably be expected to have a Material Adverse Effect.

 

(b)                                  Each Foreign Pension Plan has been maintained in substantial 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.  All contributions required to be made with respect to a Foreign Pension Plan have been or will be timely made.  Neither the Parent nor any of its Subsidiaries has incurred any obligation in connection with the termination of or withdrawal from any Foreign Pension Plan that could reasonably be expected to have a Material Adverse Effect.  Neither the Parent nor any of its Subsidiaries maintains or contributes to any Foreign Pension Plan the obligations with respect to which could in the aggregate reasonably be expected to have a Material Adverse Effect.

 

6.11                         Subsidiaries .  On the Closing Date, the Parent has no Subsidiaries other than those Subsidiaries listed on Schedule VII (which Schedule identifies the correct legal name, direct owner, percentage ownership and jurisdiction of organization of each such Subsidiary on the date hereof).  On the Closing Date, all outstanding capital stock, membership interests, partnership interests, units or other form of equity, of each class outstanding, of each of the Subsidiaries listed on Schedule VII has been validly issued, is fully paid and non-assessable (to the extent applicable) and, except in the case of the Parent, is owned beneficially and of record by a Credit Party free and clear of all Liens other than Permitted Liens.

 

6.12                         Compliance with Statutes, etc.   The Parent and each of its Subsidiaries are in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the conduct of its business and the ownership of its property, except such non-compliances that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

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6.13                         Investment Company Act .  Neither the Parent, nor any of its Subsidiaries, is an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

 

6.14                         Anti-Money Laundering; Anti-Corruption .  (a)                                         No part of the proceeds of the Loans will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

 

(b)                                  Neither the Parent, any of its Subsidiaries, nor their respective directors, officers, or, to the best knowledge of the Parent or the Borrower, their employees, agents or representatives has made or agreed to make any contribution, payment, gift or entertainment to, or accepted or received any contributions, payments, gifts or entertainment from, any government official, employee, political party or agent or any candidate for any federal, state, local or foreign public office, where either the contribution, payment or gift or the purpose thereof was illegal under the laws of any federal, state, local or foreign jurisdiction.

 

6.15                         Sanctions Laws .  (a)  Each of the Parent and its Subsidiaries is in compliance, in all material respects, with the (i) 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 Executive Order No. 13224 on Terrorist Financing, effective September 24, 2011 (the “ Executive Order ”) and (iii) the PATRIOT Act.

 

(b)                                  Neither the Parent nor any of its Subsidiaries nor, to the best knowledge of the Parent and the Borrower after due inquiry, any Affiliate of any of the foregoing, is, or will be after consummation of the Transaction and application of the proceeds of the Loans, by reason of being a “national” of a “designated foreign country” or a “specially designated national” within the meaning of the Regulations of the Office of Foreign Assets Control (“ OFAC ”), United States Treasury Department (31 C.F.R., Subtitle B, Chapter V) or is included on the Specially Designated Nationals and Blocked Persons List maintained by OFAC or any list of Persons issued by OFAC pursuant to the Executive Order at its official website or any replacement website or other replacement official publication of such list, or for any other reason, in violation of, any United States Federal Statute or executive order concerning trade or other relations with any foreign country or any citizen or national thereof.

 

(c)                                   The Parent and its Subsidiaries do not deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order or engages in or conspires 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 United States anti-terrorism laws.

 

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(d)                                  Each of the Parent and its Subsidiaries and their respective directors and officers and, to the best knowledge of the Parent or the Borrower, employees, agents and representatives has been and is in compliance with Sanctions Laws.

 

(e)                                   Neither the Parent nor any of its Subsidiaries, nor their respective directors or officers, and, to the best knowledge of the Parent or the Borrower, employees, agents or representatives (i) is a Restricted Party, or is involved in any transaction through which it is reasonably 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.

 

6.16                         Pollution and Other Regulations .  (a)  Each of the Parent and its Subsidiaries is in compliance with all applicable Environmental Laws governing its business, except for such failures to comply as are not reasonably likely to have a Material Adverse Effect, and neither the Parent nor any of its Subsidiaries is liable for any penalties, fines or forfeitures for failure to comply with any of the foregoing except for such penalties, fines or forfeitures as are not reasonably likely to have a Material Adverse Effect.

 

(b)                                  All licenses, permits, registrations or approvals required for the business of the Parent and each of its Subsidiaries, as conducted as of the Closing Date, under any Environmental Law have been secured and each of the Parent and each of its Subsidiaries is in substantial compliance therewith, except for such failures to secure or comply as are not reasonably likely to have a Material Adverse Effect.

 

(c)                                   Neither the Parent nor any of its Subsidiaries is in noncompliance with, breach of or default under any applicable writ, order, judgment, injunction, or decree to which the Parent or such Subsidiary is a party or which would affect the ability of the Parent or such Subsidiary to operate any Vessel, Real Property or other facility 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, as such noncompliance, breaches or defaults as are not likely to, individually or in the aggregate, have a Material Adverse Effect.

 

(d)                                  There are, as of the Closing Date, no Environmental Claims pending or, to the knowledge of the Parent or the Borrower, threatened, against the Parent or any of its Subsidiaries in respect of which an unfavorable decision, ruling or finding would be reasonably likely to have a Material Adverse Effect.

 

(e)                                   There are no facts, circumstances, conditions or occurrences on any Vessel, Real Property or other facility owned or operated by the Parent or any of its Subsidiaries that are reasonably likely (i) to form the basis of an Environmental Claim against the Parent, any of its Subsidiaries or any Vessel, Real Property or other facility owned by the Parent or any of its Subsidiaries, or (ii) to cause such Vessel, Real Property or other facility to be subject to any restrictions on its ownership, occupancy, use or transferability under any Environmental Law, except in each such case for clauses (i) and (ii) above, such Environmental Claims or restrictions that individually or in the aggregate are not reasonably likely to have a Material Adverse Effect.

 

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(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 Vessel, Real Property or other facility at any time owned or operated by the Parent or any of its Subsidiaries or (ii) released on or from any such Vessel, Real Property or other facility, 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.

 

This Section 6.16 contains the sole and exclusive representations and warranties of the Credit Parties with respect to environmental, health and safety matters, including any relating to or arising under Environmental Laws, Environmental Claims or Hazardous Materials.

 

6.17                         Labor Relations .  Neither the Parent nor any of its Subsidiaries is engaged in any unfair labor practice that could reasonably be expected to have a Material Adverse Effect and there is (a) no unfair labor practice complaint pending against the Parent or any of its Subsidiaries or, to the Parent’s knowledge, threatened against any of them before the National Labor Relations Board, and no material grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against the Parent or any of its Subsidiaries or, to the Parent’s knowledge, threatened against any of them, (b) no strike, labor dispute, slowdown or stoppage pending against the Parent or any of its Subsidiaries or, to the Parent’s knowledge, threatened against the Parent or any of its Subsidiaries and (c) no union representation proceeding pending with respect to the employees of the Parent or any of its Subsidiaries, except (with respect to the matters specified in clauses (a), (b) and (c) above) as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

6.18                         Patents, Licenses, Franchises and Formulas .  The Parent and each of its Subsidiaries owns, or has the right to use, and has the right to enforce and prevent any third party from using, all material patents, trademarks, permits, service marks, trade names, copyrights, licenses, franchises and formulas, and has obtained assignments of all leases and other rights of whatever nature, necessary for the present conduct of its business, without any known conflict with the rights of others, except for such failures and conflicts which could not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

6.19                         Indebtedness .  Schedule IV sets forth a true and complete list of all Indebtedness of the Parent and its Subsidiaries as of the Closing Date (other than Indebtedness under the ECA Credit Documents and the BlueMountain Indebtedness) and which is to remain outstanding after giving effect to the Closing Date (the “ Existing Indebtedness ”), in each case showing the aggregate principal amount thereof and the name of the borrower and any other entity which directly or indirectly guarantees such debt.

 

6.20                         Insurance .  Schedule V-B sets forth a true and complete listing of all insurance maintained by each Credit Party with respect to the Collateral Vessels as of the Closing Date, with the amounts insured (and any deductibles) set forth therein.

 

6.21                         Concerning the Collateral Vessels .  The name, registered owner (which shall be a Subsidiary Guarantor), official number, and jurisdiction of registration and flag (which shall be in an Acceptable Flag Jurisdiction) of each Collateral Vessel is set forth on Schedule III .  Each

 

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Collateral Vessel is and will be operated in compliance with all applicable law, rules and regulations, except such noncompliance as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or result in a material diminution in the value of such Collateral Vessel.

 

6.22                         Citizenship .  The Parent and each other Credit Party which owns or operates, or will own or operate, one or more Collateral Vessels is, or will be, qualified to own and operate such Collateral Vessels under the laws of the Republic of the Marshall Islands, the Republic of Liberia or Bermuda, as applicable, or such other jurisdiction in which any such Collateral Vessels are permitted, or will be permitted, to be flagged in accordance with the terms of the respective Collateral Vessel Mortgages.

 

6.23                         Collateral Vessel Classification; Flag .  Each Collateral Vessel is (i) or will be, classified in the highest class available for Vessels of its age and type with an Acceptable Classification Society, free of any conditions or recommendations, other than as permitted, or will be permitted, under the Collateral Vessel Mortgage, and (ii) flagged in an Acceptable Flag Jurisdiction.

 

6.24                         No Immunity .  The Parent does not, nor does any other Credit Party or any of their respective properties, have any right of immunity on the grounds of sovereignty or otherwise from the jurisdiction of any court or from setoff or any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) under the laws of any jurisdiction.  The execution and delivery of the Credit Documents by the Credit Parties and the performance by them of their respective obligations thereunder constitute commercial transactions.

 

6.25                         Fees and Enforcement .  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 taxes which have been, or will be, paid by the Parent or any of its Subsidiaries as and to the extent due.  Under the laws of any Acceptable Flag Jurisdiction, 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 Credit Party to jurisdiction and consent to service of process and, where necessary, appointment by such Credit Party of an agent for service of process, in each case as set forth in such Credit Documents, is legal, valid, binding and effective.

 

6.26                         Form of Documentation .  Each of the Credit Documents is, or when executed will be, in proper legal form under the laws of 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 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 such applicable Acceptable Flag Jurisdiction, or notarized or executed under seal, or physically executed in any such jurisdiction, except as have been made, or will be made, in accordance with Section 5.01.

 

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6.27                         Solvency .  After giving effect to (a) the Loans, (b) the consummation of the Transaction and (c) the payment and accrual of all transaction costs in connection with the foregoing, the Parent and its Subsidiaries, taken as a whole, and the Borrower and its Subsidiaries, taken as a whole, are Solvent.

 

Section 7.                                            Affirmative Covenants .  Each of the Parent, the Borrower hereby covenants and agrees that on and after the Closing Date, and until the Loans and Notes, together with interest and all other obligations incurred hereunder and thereunder, are paid in full:

 

7.01                         Information Covenants .  The Parent will make available to the Facility Agent, with sufficient copies for each of the Lenders:

 

(a)                                  Quarterly Financial Statements .  Within 45 days after the close of the first three quarterly accounting periods in each fiscal year of the Parent, (i) the unaudited consolidated balance sheets of the Parent and its Subsidiaries as at the end of such quarterly accounting period and the related unaudited consolidated statements of income and cash flows, in each case for such quarterly accounting period and for the elapsed portion of the fiscal year ended with the last day of such quarterly accounting period, and in each case, setting forth comparative figures for the related periods in the prior fiscal year, all of which shall be certified by the senior financial officer of the Parent, subject to normal year-end audit adjustments and (ii) management’s discussion and analysis of the important operational and financial developments during the fiscal quarter and year-to-date periods.

 

(b)                                  Annual Financial Statements .  Within 90 days after the close of each fiscal year of the Parent (i) the audited consolidated balance sheets of the Parent and its Subsidiaries as at the end of such fiscal year and the related audited consolidated statements of income and retained earnings and of cash flows for such fiscal year setting forth comparative figures for the preceding fiscal year and certified by Deloitte & Touche LLP or such other independent certified public accountants of recognized national standing reasonably acceptable to the Facility Agent, together with a report of such accounting firm stating that in the course of its regular audit of the financial statements of the Parent and its Subsidiaries, which audit was conducted in accordance with generally accepted auditing standards, such accounting firm obtained no knowledge of any Default or Event of Default pursuant to the Financial Covenants, which has occurred and is continuing or, if in the opinion of such accounting firm such a Default or Event of Default has occurred and is continuing, a statement as to the nature thereof and (ii) management’s discussion and analysis of the important operational and financial developments during such fiscal year.

 

(c)                             Appraisals .  Together with delivery of the compliance certificates described in Section 7.01(e) required in connection with each fiscal quarter in each fiscal year of the Parent, and at any other time within 33 days of the written request of the Facility Agent, Appraisals dated no more than 14 days prior to the delivery thereof, in form and substance reasonably satisfactory to the Facility Agent and from two Approved Appraisers stating the then current Fair Market Value of each of the Collateral Vessels.  All such Appraisals shall be conducted by, and made at the expense of, the Borrower (it being understood that the Facility 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

 

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more than two Appraisals obtained pursuant to this clause (c) in any single fiscal quarter of the Borrower, with the cost of any such reports in excess thereof to be paid by the Lenders on a pro rata basis.

 

(d)                                  Projections, Budget, etc.   As soon as available but not more than 30 days after the commencement of each fiscal year of the Parent, cash flow projections (including a balance sheet and statement of profit and loss and cash flow) of the Parent and its Subsidiaries in reasonable detail for the fiscal year in which such cash flow projections are actually delivered and the following three fiscal years.

 

(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 the senior financial officer of the Parent in the form of Exhibit L 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 Parent was in compliance with the Financial Covenants at the end of such fiscal quarter or year, as the case may be and (y) certify that there have been no changes to any of Schedule VII, Annexes A through F of the Pledge Agreement and Schedules 1 through 5 of the Global Assignment Agreement since the Closing Date or, if later, since the date of the most recent certificate delivered pursuant to this Section 7.01(e)(i), or if there have been any such changes, a list in reasonable detail of such changes (but, in each case with respect to this clause (y), only to the extent that such changes are required to be reported to the Collateral Agent pursuant to the terms of such Pledge Agreement or Global Assignment Agreement) and whether the Parent and the other Credit Parties have otherwise taken all actions required to be taken by them pursuant to such Pledge Agreement or Global Assignment Agreement in connection with any such changes.

 

(ii)                                   At the time of a Collateral Disposition in respect of any Collateral Vessel, a certificate of a senior financial officer of the Parent which certificate shall (x) certify on behalf of the Parent the last Appraisals received pursuant to Section 7.01(c) determining the Aggregate Collateral Vessel Value, after giving effect to such disposition(s) and/or showing the individual Fair Market 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 Parent is in compliance with the provisions of Section 8.07(d) after giving effect to such disposition.

 

(f)                                    Notice of Default, Litigation or Event of Loss .  Promptly, and in any event within three Business Days after the Parent obtains 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 Parent proposes to take with respect thereto, (ii) any litigation or governmental investigation or proceeding pending or threatened in writing against the Parent or any of its Subsidiaries which, if adversely determined, could reasonably be expected to have a Material Adverse Effect on any Credit Document and (iii) any Event of Loss in respect of any Collateral Vessel.

 

(g)                                   Other Reports and Filings .  Promptly, copies of all financial information, proxy materials and other information and reports, if any, which the Parent or any of its

 

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Subsidiaries shall file with the SEC or deliver to holders of its Indebtedness pursuant to the terms of the documentation governing such Indebtedness (or any trustee, agent or other representative therefor).

 

(h)                             Material Breach; Other Debt Documents .  Promptly upon, and in any event within five Business Days after, without duplication of any other reporting requirements herein, receipt of any notices of default, financial reporting and collateral reporting under the ECA Credit Documents, and copies of all effectuated additions, amendments, restatements, supplements or other modifications in respect of the ECA Credit Documents.

 

(i)                                      Environmental Matters .  Promptly upon, and in any event within fifteen Business Days after, the Parent 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 Parent or any of its Subsidiaries or any Collateral Vessel or property owned or operated or occupied by the Parent 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 Parent or any of its Subsidiaries that (a) results in noncompliance by the Parent or such Subsidiary with any applicable Environmental Law or (b) could reasonably be expected to form the basis of an Environmental Claim against the Parent or any of its Subsidiaries or any such Collateral Vessel or property;

 

(iii)                                any condition or occurrence on any Collateral Vessel or property owned or operated or occupied by the Parent 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 Parent or such Subsidiary of such Collateral Vessel or property under any Environmental Law; and

 

(iv)                                                                               the taking of any removal or remedial action in response to the actual or alleged presence of any Hazardous Material on any Collateral Vessel or property owned or operated or occupied by the Parent or any of its Subsidiaries as required by any Environmental Law or any governmental or other administrative agency; provided that in any event the Parent shall deliver to the Facility Agent all material notices received by the Parent or any of its Subsidiaries from any government or governmental agency under, or pursuant to, CERCLA or OPA.

 

All such notices shall describe in reasonable detail the nature of the claim, investigation, condition, occurrence or removal or remedial action and the Parent’s or such Subsidiary’s response thereto.  In addition, the Parent will provide the Facility Agent with copies of all material communications with any government or governmental agency and all material communications with any Person relating to any Environmental Claim of which notice is required to be given pursuant to this Section 7.01(i), and such detailed reports of any such

 

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Environmental Claim as may reasonably be requested by the Facility Agent or the Required Lenders.

 

(j)                                     Management Letters .  Promptly after Parent’s or any of its Subsidiaries’ receipt thereof, a copy of any “management letter” received from its certified public accountants and management’s response thereto.

 

(k)                                  Sanctions Matters .  Promptly and in any event within five Business Days after any Credit Party obtains actual knowledge thereof, the relevant Credit Party shall supply to the Facility Agent (i) the details of any inquiry, claim, action, suit, proceeding or investigation pursuant to Sanctions Laws by any Sanctions Authority against it, any of its Subsidiaries, any of its direct or indirect owners, or any of their respective directors, officers, employees, agents or representatives as well as information on what steps are being taken to answer or oppose such inquiry, claim, action, suit, proceeding or investigation and (ii) that any Credit Party, any of its Subsidiaries or any of its direct or indirect owners, or any of their respective directors, officers, employees agents or representatives has become or is likely to become a Restricted Party.

 

(l)                                 Other Information .  From time to time, such other information or documents (financial or otherwise) with respect to the Parent or its Subsidiaries as the Facility Agent or the Lenders (through the Facility Agent) may reasonably request in writing.

 

7.02                         Books, Records and Inspections .  The Parent will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries, in conformity in all material respects with GAAP and all requirements of law, shall be made of all dealings and transactions in relation to its business.  The Parent will, and will cause each of its Subsidiaries to, permit officers and designated representatives of the Facility Agent and the Lenders as a group to visit and inspect, during regular business hours and under guidance of officers of the Parent or any of its Subsidiaries, any of the properties of the Parent or its Subsidiaries, and to examine the books of account of the Parent or such Subsidiaries and discuss the affairs, finances and accounts of the Parent or such Subsidiaries with, and be advised as to the same by, its and their officers and, in the presence of the Parent, independent accountants, all upon reasonable advance notice and at such reasonable times and intervals and to such reasonable extent as the Facility Agent or the Required Lenders may request; provided that, unless an Event of Default exists and is continuing at such time, the Facility Agent and the Lenders shall not be entitled to request more than two such visitations and/or examinations in any fiscal year of the Parent.

 

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7.03                         Maintenance of Property; Insurance .  The Parent will, and will cause each of its Subsidiaries to, (i) keep all material property necessary in its business in good working order and condition (ordinary wear and tear and loss or damage by casualty or condemnation excepted), (ii) maintain insurance with respect to property that is not Collateral Vessels in at least such amounts and against at least such risks as are in accordance with normal industry practice for similarly situated insureds, (iii) maintain the Required Insurance with respect to the Collateral Vessels at all times, and (iv) furnish to the Facility Agent, at the written request of the Facility Agent or any Lender (through the Facility Agent), a complete description of the material terms of insurance carried, or, at the Borrower’s option, copies of such policies.

 

7.04                         Corporate Franchises .  The Parent will, and will cause each of its Subsidiaries, to do or cause to be done, all things necessary to preserve and keep in full force and effect its existence and its material rights, franchises, licenses and patents (if any) used in its business, except, in the case of any Subsidiary of the Parent that is not a Guarantor, which could not be reasonably expected to have a Material Adverse Effect; provided , however , that nothing in this Section 7.04 shall prevent (i) sales or other dispositions of assets, consolidations or mergers by or involving the Parent or any of its Subsidiaries which are permitted in accordance with Section 8.02 or 8.03, (ii) any Subsidiary Guarantor from changing the jurisdiction of its organization to the extent permitted by Section 8.08 or (iii) the abandonment by the Parent or any of its Subsidiaries of any rights, franchises, licenses and patents that could not be reasonably expected to have a Material Adverse Effect.

 

7.05                         Compliance with Statutes, etc.   The Parent will, and will cause each of its Subsidiaries to:

 

(a)                                  comply with all applicable statutes, regulations and orders of, and all applicable restrictions (including all laws and regulations relating to money laundering) imposed by, all governmental bodies, domestic or foreign, (i) in respect of the conduct of its business and the ownership of its property, except such non-compliances as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect and (ii) applicable to each Collateral Vessel, its ownership, employment, operation, management and registration, including the ISM Code, ISPS Code, all material Environmental Laws, all Sanctions Laws and the laws of the relevant Acceptable Flag Jurisdiction.

 

(b)                                  obtain, comply with, and do all that is necessary to maintain in full force and effect any approvals required by any Environmental Law, except such non-compliance as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and

 

(c)                                   without limiting paragraph (a) above, not employ any Collateral Vessel, nor allow its employment, operation or management in any manner contrary to any applicable law or regulation, including, but not limited to the ISM Code, the ISPS Code, all applicable material Environmental Laws and all applicable Sanctions Laws.

 

7.06                         Compliance with Environmental Laws .  (a)  The Parent will, and will cause each of its Subsidiaries to, comply with all Environmental Laws applicable to the ownership or use of any Collateral Vessel or any other Vessel or property now or hereafter owned or operated by the

 

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Parent or any of its Subsidiaries, will within a reasonable time period pay or cause to be paid all costs and expenses incurred in connection with such compliance (except to the extent being contested in good faith), and will keep or cause to be kept all such Collateral Vessels or Vessels or property free and clear of any Liens imposed pursuant to such Environmental Laws, in each of the foregoing cases, except to the extent any failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  None of the Parent, any of Subsidiaries of the Parent will generate, use, treat, store, release or dispose of, or permit the generation, use, treatment, storage, release or disposal of, Hazardous Materials on any Collateral Vessel or Vessel or property now or hereafter owned or operated or occupied by the Parent, any of its Subsidiaries, or transport or permit the transportation of Hazardous Materials to or from any ports or property except in compliance with all applicable Environmental Laws and as reasonably required by the trade in connection with the operation, use and maintenance of any such property or otherwise in connection with their businesses or except to the extent the same could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The Parent will, and will cause each of its Subsidiaries to, maintain insurance on the Collateral Vessels and any other Vessel in at least such amounts as are in accordance with normal industry practice for similarly situated insureds, against losses from oil spills and other environmental pollution.

 

(b)                                  At the written request of the Facility Agent or the Required Lenders, which request shall specify in reasonable detail the basis therefor, the Parent or the Borrower will provide, at the Parent or the Borrower’s sole cost and expense, an environmental assessment of any Collateral Vessel by an Acceptable Classification Society.  If said classification society, in its assessment, indicates that such Collateral Vessel is not in compliance with the Environmental Laws, said society shall set forth potential costs of the remediation of such non-compliance; provided that such request for an assessment may be made only if (i) there has occurred and is continuing an Event of Default, (ii) the Facility Agent or the Required Lenders reasonably and in good faith believe that the Parent, any of its Subsidiaries or any such Collateral Vessel is not in compliance with Environmental Law and such non-compliance could reasonably be expected to have a Material Adverse Effect, or (iii) the Facility Agent or the Required Lenders reasonably and in good faith believe that circumstances exist that reasonably could be expected to form the basis of a material Environmental Claim against the Parent or any of its Subsidiaries or any such Collateral Vessel.  If the Parent or the Borrower fails to provide the same within 90 days after such request was made, the Facility Agent may order the same and the Parent or the Borrower shall grant and hereby grants to the Facility Agent and the Lenders and their agents reasonable access to such Collateral Vessel and specifically grants the Facility Agent and the Lenders an irrevocable non-exclusive license, subject to the rights of tenants, to undertake such an assessment, all at the Parent or the Borrower’s expense.

 

7.07                         ERISA .  (a)                                   As soon as reasonably possible and, in any event, within ten (10) days after the Parent or any of its Subsidiaries or any ERISA Affiliate knows or has reason to know of the occurrence of any of the following, the Parent will deliver to the Facility Agent, with sufficient copies for each of the Lenders, a certificate of the senior financial officer of the Parent setting forth the full details as to such occurrence and the action, if any, that the Parent, such Subsidiary or such ERISA Affiliate is required or proposes to take, together with any notices required or proposed to be given to or filed with or by the Parent, the Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or the Plan administrator with respect thereto:

 

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(i)                                      that a Reportable Event has occurred (except to the extent that the Parent has previously delivered to the Facility Agent a certificate and notices (if any) concerning such event pursuant to the next clause hereof);

 

(ii)                                   that a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is subject to the advance reporting requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof), and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected to occur with respect to such Plan within the following 30 days;

 

(iii)                                that a failure to satisfy minimum funding requirements, within the meaning of Section 412 of the Code or Section 302 of ERISA, has occurred or an application may be or has been made for a waiver or modification of the minimum funding standard (including any required installment payments) or an extension of any amortization period under Section 412 or 430 of the Code or Section 302 or 303 of ERISA with respect to a Plan;

 

(iv)                               that the actuary of a Plan (other than a Multiemployer Plan) has or will certify that the Plan is an at-risk plan within the meaning of Section 430 of the Code or Section 303 of ERISA;

 

(v)                                  that a Plan which is a Multiemployer Plan is in endangered or critical status under Section 305 of ERISA;

 

(vi)                               that any contribution required to be made with respect to a Plan or Foreign Pension Plan has not been timely made and such failure could result in a material liability for the Parent or any of its Subsidiaries;

 

(vii)                            that a Plan has been or may be reasonably expected to be terminated, reorganized, partitioned or declared insolvent under Title IV of ERISA with a material amount of unfunded benefit liabilities; that a Plan (in the case of a Multiemployer Plan, to the best knowledge of the Parent or any of its Subsidiaries or ERISA Affiliates) has a material Unfunded Current Liability;

 

(viii)                         that proceedings may be reasonably expected to be or have been instituted by the PBGC to terminate or appoint a trustee to administer a Plan which is subject to Title IV of ERISA;

 

(ix)                               that a proceeding has been instituted pursuant to Section 515 of ERISA to collect a material delinquent contribution to a Plan; that the Parent, any of its Subsidiaries or any ERISA Affiliate will or may reasonably expect to incur any material liability (including any indirect, contingent, or secondary liability) to or on account of the termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under Section 436(f), 4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(l) of ERISA or with respect to a group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or

 

(x)                                  that the Parent, or any of its Subsidiaries may incur any material liability pursuant to any employee welfare benefit plan (as defined in Section 3(1) of ERISA) that

 

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provides benefits to retired employees or other former employees (other than as required by Section 601 of ERISA) or any Plan or any Foreign Pension Plan.

 

(b)                                  Upon request, the Parent will deliver to the Facility Agent with sufficient copies to the Lenders (i) a complete copy of the annual report (on Internal Revenue Service Form 5500-series) of each Plan (including, to the extent required, the related financial and actuarial statements and opinions and other supporting statements, certifications, schedules and information) required to be filed with the Internal Revenue Service and (ii) copies of any records, documents or other information that must be furnished to the PBGC with respect to any Plan pursuant to Section 4010 of ERISA.

 

(c)                                   In addition to any certificates or notices delivered to the Lenders pursuant to clauses (a) and (b), copies of annual reports and any records, documents or other information required to be furnished to the PBGC, and any notices received by the Parent, any of its Subsidiaries or any ERISA Affiliate with respect to any Plan or Foreign Pension Plan with respect to any circumstances or event that could reasonably be expected to result in a material liability shall be delivered to the Lenders no later than ten (10) days after the date such annual report has been filed with the Internal Revenue Service or such records, documents and/or information has been furnished to the PBGC or such notice has been received by the Parent, such Subsidiary or such ERISA Affiliate, as applicable.

 

7.08                         End of Fiscal Years; Fiscal Quarters .  The Parent shall cause (i) each of its, and each of its Subsidiaries’, fiscal years to end on December 31 and (ii) each of its and its Subsidiaries’ fiscal quarters to end on March 31, June 30, September 30 and December 31 of each year.

 

7.09                         Performance of Obligations .  The Parent will, and will cause each of its Subsidiaries to, perform all of its obligations under the terms of each mortgage, indenture, security agreement and other debt instrument (including, without limitation, the Credit Documents) by which it is bound, except to the extent waived by the parties thereto and except such non-performances as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

7.10                         Payment of Taxes .  The Parent will, and will cause each of its Subsidiaries to, pay and discharge, all material taxes, assessments and governmental charges or levies that become due and payable which are imposed upon it or upon its income or profits, or upon any properties belonging to it, prior to the date on which penalties attach thereto, and all lawful claims for sums that have become due and payable which, if unpaid, might become a Lien not otherwise permitted under Section 8.01(i), provided that neither the Parent nor any of its Subsidiaries shall be required to pay any such tax, assessment, charge, levy or claim which is being contested in good faith and by proper proceedings if it has maintained adequate reserves with respect thereto in accordance with GAAP.

 

7.11                         Post-Closing Obligations; Further Assurances .  (a)                        Within three Business Days after the Closing Date (or such longer period as the Collateral Agent may, in its sole discretion, permit), the Borrower shall have delivered to the Collateral Agent original stock certificates

 

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representing Equity Interest in each Subsidiary Guarantor organized in Bermuda and any and all transfer powers in connection therewith.

 

(b)                                  The Parent will, and will cause each of the Subsidiaries to, cause the Collateral and Guaranty Requirement to be satisfied at all times.

 

(c)                                   The Parent, on behalf of itself and each other Credit Party, will at any time and from time to time, at the expense of the Parent or such other Credit Party, it will promptly execute and deliver all further instruments and documents, and take all further action that may be reasonably necessary, or that the Facility Agent may reasonably require, to perfect and protect any Lien granted or purported to be granted hereby or by the other Credit Documents, or to enable the Collateral Agent to exercise and enforce its rights and remedies with respect to any Collateral.  Without limiting the generality of the foregoing, the Parent will, and will cause each Credit Party to, execute (to the extent applicable) and file, or cause to be filed, such financing or continuation statements under the UCC (or any non-U.S. equivalent thereto), or amendments thereto, such amendments or supplements to the Collateral Vessel Mortgages (including any amendments required to maintain Liens granted by such Collateral Vessel Mortgages pursuant to the effectiveness of this Agreement), and such other instruments or notices, as may be reasonably necessary, or that the Facility Agent may reasonably require, to protect and preserve the Liens granted or purported to be granted hereby and by the other Credit Documents.

 

(d)                                  Each Credit Party hereby authorizes the Collateral Agent to file one or more financing or continuation statements under the UCC (or any non-U.S. equivalent thereto), and amendments thereto, relative to all or any part of the Collateral, without the signature of any Credit Party, where permitted by law.  The Collateral Agent will promptly send the Parent a copy of any financing or continuation statements which it may file without the signature of any Credit Party and the filing or recordation information with respect thereto.

 

(e)                                   At the reasonable written request of any counterparty to an Interest Rate Protection Agreement entered into after the Closing Date (to the extent permitted under this Agreement to be entered into and secured) with one or more Lenders or any Affiliate thereof (even if, after the entry into such Interest Rate Protection Agreement, the respective Lender subsequently ceases to be a Lender for any reason), the applicable Credit Party and, at the written direction of the Collateral Agent, the mortgagee, shall promptly execute an amendment to each Collateral Vessel Mortgage adding obligations under such Interest Rate Protection Agreement as an additional secured obligation under each Collateral Vessel Mortgage (and allowing such obligations to be secured on such basis as set forth in this Agreement or in the Pledge Agreement), and cause the same to be promptly and duly recorded, and such amendment shall be in form and substance reasonably satisfactory to the Collateral Agent.

 

7.12                         Deposit of Earnings; Minimum Liquidity Account .  (a) Each Credit Party shall cause the earnings derived from each of the respective Collateral Vessels, to the extent constituting Earnings and Insurance Collateral, to be deposited by the respective account debtor in respect of such earnings into one or more of the Concentration Accounts maintained for such Credit Party from time to time.  Without limiting any Credit Party’s obligations in respect of this Section 7.12, each Credit Party agrees that, in the event it receives any earnings constituting Earnings and Insurance Collateral, or any such earnings are deposited other than in one of the

 

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Concentration Accounts, it shall promptly deposit all such proceeds into one of the Concentration Accounts maintained for such Credit Party from time to time.

 

(b)                                  The Parent and the Borrower shall cause an amount equal to the pro rata amount of the Minimum Liquidity Amount corresponding to the proportion that the outstanding Loan hereunder bears to the aggregate outstanding loans under the ECA Credit Agreements together with the outstanding Loan hereunder to be on deposit in the Minimum Liquidity Account at all times.

 

7.13                         Ownership of Subsidiaries .  (a)  Other than “director qualifying shares”, the Parent shall at all times directly or indirectly own 100% of the Equity Interests of the Borrower and each of the Subsidiary Guarantors.

 

(b)                            The Parent shall cause each Subsidiary Guarantor to at all times be directly owned by one or more Credit Parties which is a direct or indirect Subsidiary of the Borrower.

 

(c)                             The Parent will cause each Collateral Vessel to be owned at all times by a single Subsidiary Guarantor that owns no other Collateral Vessels.

 

7.14                         Flag of Collateral Vessels; Citizenship; Collateral Vessel Classifications .  (a)  The Parent shall, and shall cause each Credit Party that owns a Collateral Vessel to, cause each Collateral Vessel to be registered under the laws and flag of (i) the Bahamas, (ii) the Republic of Malta, (iii) the Republic of Liberia, (iv) the Republic of the Marshall Islands, (v) Bermuda, (vi) the United Kingdom, (vii) Singapore or (viii) such other jurisdiction as is acceptable to the Lenders (each jurisdiction in clauses (i) through and including (viii), an “ Acceptable Flag Jurisdiction ”).  Notwithstanding the foregoing, any Credit Party may transfer a Collateral Vessel to another Acceptable Flag Jurisdiction pursuant to a Flag Jurisdiction Transfer.

 

(b)                            The Parent will, and will cause each Subsidiary Guarantor which owns or operates a Collateral Vessel to, be qualified to own and operate such Collateral Vessel under the laws of the applicable Acceptable Flag Jurisdiction in accordance with the terms of the related Collateral Vessel Mortgage.

 

(c)                             Other than as a result of damage or casualty, the Parent will and will cause each Subsidiary Guarantor which operates a Collateral Vessel to keep such Collateral Vessel in a good and sufficient state of repair consistent with the ship-ownership and management practice employed by first class owners of vessels of similar size and type and so as to ensure that each Collateral Vessel is classified in the highest class available for vessels of its age and type with an Acceptable Classification Society, free of any overdue conditions or recommendations affecting the seaworthiness of such Collateral Vessel, provided that if the classification of any of the Collateral Vessels shall be subject to any such recommendations, the Borrower will and will cause each Subsidiary Guarantor which operates such Collateral Vessel to provide a written report to the Facility Agent describing the recommendations and assessing the steps required to be taken to prevent such recommendations from becoming overdue recommendations.

 

(d)                            The Parent will and will cause each Subsidiary Guarantor which operates a Collateral Vessel to (i) comply with and satisfy in all material respects all applicable Legal Requirements of the jurisdiction of such Collateral Vessel’s home port, now or hereafter from

 

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time to time in effect, in order that such Collateral Vessel shall continue to be documented pursuant to the laws of the jurisdiction of its home port with such endorsements as shall qualify such Collateral Vessel for participation in the trades and services to which it may be dedicated from time to time or (ii) not do or allow to be done anything whereby such documentation is or could reasonably be expected to be forfeited.

 

(e)                             The Parent will and will cause each Subsidiary Guarantor which operates a Collateral Vessel to (i) make or cause to be made all repairs to or replacement of any damaged, worn or lost parts or equipment such that the value of such Collateral Vessel will not be materially impaired and (ii) except as otherwise contemplated by this Agreement, not remove any material part of, or item of, equipment owned by the Credit Parties installed on such Collateral Vessel except in the ordinary course of the operation and maintenance of such Collateral Vessel unless (x) the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Lien (other than Permitted Liens) in favor of any Person other than the Collateral Agent and becomes, upon installation on such Collateral Vessel, the property of the Credit Parties and subject to the security constituted by the Collateral Vessel Mortgage or the Pledge Agreement or (y) the removal will not materially diminish the value of such Collateral Vessel.

 

(f)                              The Parent will and will cause each Subsidiary Guarantor which operates a Collateral Vessel to submit such Collateral Vessel to such periodical or other surveys as may be required for classification purposes and, upon the written request of the Collateral Agent, supply to the Collateral Agent copies of all survey reports and classification certificates issued in respect thereof.

 

(g)                             The Parent will and will cause each Subsidiary Guarantor which operates a Collateral Vessel to promptly pay and discharge all tolls, dues, taxes, assessments, governmental charges, fines, penalties, debts, damages and liabilities whatsoever which have given or may give rise to maritime or possessory Liens (other than Permitted Liens) on, or claims enforceable against, such Collateral Vessel other than any of the foregoing being contested in good faith and diligently by appropriate proceedings, and, in the event of arrest of any Collateral Vessel pursuant to legal process, or in the event of its detention in exercise or purported exercise of any such Lien or claim as aforesaid, procure, if possible, the release of such Collateral Vessel from such arrest or detention forthwith upon receiving notice thereof by providing bail or otherwise as the circumstances may require.

 

(h)                            The Parent will and will cause each Subsidiary Guarantor which operates a Collateral Vessel to maintain, or cause to be maintained by the charterer or lessee of any Collateral Vessel, a valid Certificate of Financial Responsibility (Oil Pollution) issued by the United States Coast Guard pursuant to the Federal Water Pollution Control Act to the extent that such certificate may be required by applicable Legal Requirements for any Collateral Vessel and such other similar certificates as may be required in the course of the operations of any Collateral Vessel pursuant to the International Convention on Civil Liability for Oil Pollution Damage of 1969, or other applicable Legal Requirements.

 

(i)                                The Parent will and will cause each Subsidiary Guarantor which operates a Collateral Vessel to cause such Collateral Vessels to be managed by an Approved Technical

 

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Manager and the Commercial Manager, provided that (i) the Parent and such Subsidiary Guarantor shall use commercially reasonable efforts to cause such Approved Technical Manager and Commercial Manager to deliver a duly executed manager’s undertakings in a form consistent with market practice in ship finance transactions in favor of the Collateral Agent in a form and substance acceptable to the Collateral Agent and (ii)  nothing herein shall be construed so as to prohibit an Approved Technical Manager or Commercial Manager from sub-contracting its management duties.

 

7.15                         Use of Proceeds .  The Borrower will use the proceeds of the Loans only as provided in Section 6.08.

 

7.16                         Charter Contracts .  In connection with any time charters having an indicated duration of at least 24 months (including any optional extensions or renewals), the applicable Credit Party shall, at its own cost and expense, promptly and duly execute and deliver to the Collateral Agent a notice of the assignment in respect of such charter contract contained in the Global Assignment Agreement (if permitted thereunder), and will use its commercially reasonable efforts to cause the charterer under such charter to execute and deliver to the Collateral Agent a consent to such assignment in form and substance reasonably satisfactory to the Facility Agent.

 

7.17                         Separate Existence .  The Parent will, and will cause each Subsidiary Guarantor to:

 

(a)                            maintain its books, financial records and accounts, including checking and other bank accounts, and custodian and other securities safekeeping accounts, separate and distinct from those of the other Subsidiary Guarantors;

 

(b)                            maintain its books, financial records and accounts (including inter-entity transaction accounts) in a manner so that it will not be difficult or costly to segregate, ascertain or otherwise identify their assets and liabilities separate and distinct from the assets and liabilities of the other Subsidiary Guarantors;

 

(c)                             not commingle any of its assets, funds or liabilities with the assets, funds or liabilities of the other Subsidiary Guarantors;

 

(d)                            observe all requisite organizational procedures and formalities, including the holding of meetings of the boards of directors as required by its Organizational Documents, the recordation and maintenance of minutes of such meetings, and the recordation of and maintenance of resolutions adopted at such meetings;

 

(e)                             except as permitted by Section 8.02, not be consensually merged or consolidated with the other Subsidiary Guarantors (other than for financial reporting purposes);

 

(f)                              all transactions, agreements and dealings between the Parent and the Subsidiary Guarantors (including, in each case, transactions, agreements and dealings pursuant to which the assets or property of one is used or to be used by the other), will reflect the separate identity and legal existence of each such Person;

 

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(g)                             transactions between any of the Borrower and the Subsidiary Guarantors, on the one hand, and any third parties, on the other hand, will be conducted in the name of the Borrower or such Subsidiary Guarantor, as applicable, as an entity separate and distinct from the Borrower or such Subsidiary Guarantor, as applicable; and

 

(h)                            no Subsidiary Guarantor will refer to the Parent as a department or division of such Subsidiary Guarantor and will not otherwise refer to the Parent in a manner inconsistent with its status as a separate and distinct legal entity.

 

7.18                         Sanctions .  Each Credit Party shall ensure that none of it, nor any of its directors or officers, and shall use its best efforts to ensure that none of its employees, agents or representatives or any other person acting on any of their behalf is or will become a Restricted Party.

 

7.19                         Maintenance of Listing .  The Parent shall maintain its listing on the New York Stock Exchange or such other reputable international stock exchange approved by the Facility Agent (acting on the instructions of the Required Lenders) in writing, such approval not to be unreasonably withheld or delayed.

 

Section 8.                                            Negative Covenants .  Each of the Parent, the Borrower and each Subsidiary Guarantor hereby covenants and agrees that on and after the Closing Date, and until the Loans and Notes, together with interest and all other Obligations incurred hereunder and thereunder, are paid in full:

 

8.01                         Liens .  The Parent will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with respect to any Collateral, whether now owned or hereafter acquired, or sell any such Collateral subject to an understanding or agreement, contingent or otherwise, to repurchase such Collateral (including sales of accounts receivable with recourse to the Parent or any of its Subsidiaries), or assign any right to receive income or permit the filing of any financing statement under the UCC describing such collateral or any other similar notice of Lien under any similar recording or notice statute; provided that the provisions of this Section 8.01 shall not prevent the creation, incurrence, assumption or existence of the following (Liens described below are herein referred to as “ Permitted Liens ”):

 

(a)                                  inchoate Liens for taxes, assessments or governmental charges or levies not yet due and payable or Liens for taxes, assessments or governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves have been established in accordance with GAAP;

 

(b)                                  Liens imposed by law, which were incurred in the ordinary course of business and do not secure Indebtedness for borrowed money, such as carriers’, warehousemen’s, materialmen’s and mechanics’ liens and other similar Liens arising in the ordinary course of business, and (i) which do not in the aggregate materially detract from the value of the Collateral and do not materially impair the use thereof in the operation of the business of the Parent or such Subsidiary or (ii) which are being contested in good faith by appropriate proceedings, which proceedings (or orders entered in connection with

 

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such proceedings) have the effect of preventing the forfeiture or sale of the Collateral subject to any such Lien;

 

(c)                                   Permitted Encumbrances;

 

(d)                                  Liens created pursuant to the Security Documents;

 

(e)                                   Liens arising out of judgments, awards, decrees or attachments with respect to which the Parent or any of its Subsidiaries shall in good faith be prosecuting an appeal or proceedings for review, provided that the aggregate amount of all such judgments, awards, decrees or attachments shall not exceed $10,000,000;

 

(f)                                    Liens (other than any Lien imposed by ERISA) incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, Liens to secure the performance of tenders, statutory obligations (other than excise taxes), surety, stay, customs and appeal bonds, statutory bonds, bids, leases, government contracts, trade contracts, performance and return of money bonds and other similar obligations in each case incurred in the ordinary course of business (exclusive of obligations for the payment of borrowed money) and Liens arising by virtue of deposits made in the ordinary course of business to secure liability for premiums to insurance carriers; provided that the aggregate value of all cash and property at any time encumbered pursuant to this clause (f) shall not exceed $5,000,000;

 

(g)                                   Liens in respect of seamen’s wages which are not past due and other maritime Liens for amounts not more than 30 days past due arising in the ordinary course of business and not yet required to be removed or discharged under the terms of the respective Collateral Vessel Mortgages; and

 

(h)                                  bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more accounts maintained by the Parent or any Subsidiary, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank or banks with respect to cash management and operating account arrangements.

 

In connection with the granting of Liens described above in this Section 8.01 by the Parent or any of its Subsidiaries, the Facility Agent and the Collateral Agent shall be authorized to take any actions deemed appropriate by it in connection therewith (including, without limitation, by executing appropriate lien subordination agreements in favor of the holder or holders of such Liens, in respect of the item or items of equipment or other assets subject to such Liens).

 

8.02                         Consolidation, Merger, etc.   The Parent will not, and will not permit any of its Subsidiaries to wind up, liquidate or dissolve its affairs or enter into any transaction of merger, consolidation or amalgamation or convey, sell, lease or otherwise dispose of all or substantially all of its assets, except that:

 

(a)                                  (i) any Subsidiary Guarantor may be merged, consolidated or amalgamated with, or convey or sell all or substantially all of its assets to any other Subsidiary Guarantor, so long as (x) no Default or Event of Default then exists and (y)

 

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the Collateral and Guaranty Requirements are satisfied after giving effect to such transfer to the satisfaction of the Facility Agent and (ii) any Subsidiary of the Parent (other than the Borrower, any Subsidiary Guarantor and any subsidiary thereof) may be merged, consolidated or amalgamated with, or convey or sell all or substantially all of its assets to any other Subsidiary (other than the Borrower, any Subsidiary Guarantor and any subsidiary thereof) of the Parent or the Parent;

 

(b)                                  following a Collateral Disposition permitted by this Agreement, the Subsidiary Guarantor which owned the Collateral Vessel that is the subject of such Collateral Disposition may dissolve, provided that (i) the Borrower shall prepay the Loans as required by Section 4.02, (ii) all of the proceeds of such dissolution shall be paid only to a Credit Party and (iii) no Default or Event of Default is continuing unremedied at the time of such dissolution; and

 

(c)                                   any Subsidiary which is not the Borrower or a Subsidiary Guarantor may wind up, liquidate or dissolve.

 

8.03                         Disposal, Sale of Collateral, etc. .  The Parent will not, and will not permit any of its Subsidiaries to convey, sell, lease or otherwise dispose of any of the Collateral, or enter into any sale-leaseback transactions involving any of the Collateral, except that:

 

(a)                                  the Borrower and each Subsidiary Guarantor may sell, lease or otherwise dispose of any Collateral Vessel (or 100% of the Equity Interests of the Subsidiary which owns such Collateral Vessel), provided that (i)(A) such sale is made on market terms at no less than Fair Market Value (as determined in accordance with the Appraisals most recently delivered to the Facility Agent (or obtained by the Facility Agent) pursuant to Section 7.01(c) or delivered at the time of such sale to the Facility Agent by the Parent), (B) 75% of the consideration in respect of such sale shall consist of cash or Cash Equivalents received by the Borrower, or to the respective Subsidiary Guarantor which owned such Collateral Vessel, on the date of consummation of such sale, (C) the Borrower shall prepay the Loans as required by Section 4.02, and (D) the Parent shall have delivered to the Facility Agent an officer’s certificate, certified by the senior financial officer of the Parent, demonstrating pro forma compliance (giving effect to such Collateral Disposition and, in the case of calculations involving the Fair Market Value of Collateral Vessels, using valuations consistent with the Appraisals most recently delivered to the Facility Agent (or obtained by the Facility Agent) pursuant to Section 7.01(c) with each of the Financial Covenants for the most recently ended Test Period for which financial statements under Section 7.01(a) or (b) are due;

 

(b)                                  the Parent and its Subsidiaries may sell or discount, in each case without recourse and in the ordinary course of business, overdue accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof consistent with customary industry practice (and not as part of any bulk sale);

 

(c)                                   the Borrower and any Subsidiary Guarantor may transfer any Collateral to any other Subsidiary Guarantor, so long as (i) no Default or Event of Default then exists

 

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and (ii) the Collateral and Guaranty Requirements are satisfied after giving effect to such transfer to the satisfaction of the Facility Agent; and

 

(d)                                  any Subsidiary Guarantor may enter into a time charter, but not a bareboat charter, of any Collateral Vessel in compliance with Section 7.16 and 8.13.

 

To the extent the Required Lenders (or to the extent required pursuant to Section 11.13(a), all Lenders) waive the provisions of this Section 8.03 with respect to the sale of any Collateral, or any Collateral is sold as permitted by this Section 8.03, such Collateral (unless sold to the Parent or a Subsidiary of the Parent) shall be sold free and clear of the Liens created by the Security Documents, and the Facility Agent and Collateral Agent shall be authorized to take any actions deemed appropriate in order to effect the foregoing.

 

8.04                         Dividends .  The Parent will not, and will not permit any of its Subsidiaries to, authorize, declare or pay any Dividends with respect to the Parent or any of its Subsidiaries or make any payment (other than customary out-of-pocket fees and expenses) in respect of the BlueMountain Indebtedness (collectively, a “ Restricted Payment ”), except that:

 

(a) (i) any Wholly-Owned Subsidiary of the Parent (other than the Borrower, any Subsidiary Guarantor and any subsidiary thereof) may pay Dividends to the Parent or any Wholly-Owned Subsidiary of the Parent, (ii) any Subsidiary Guarantor may pay Dividends to the Borrower or any other Subsidiary Guarantor and (iii) if the respective Subsidiary (other than the Borrower or a Subsidiary Guarantor) is not a Wholly-Owned Subsidiary of the Parent, such Subsidiary may pay Dividends to its shareholders generally so long as the Parent and/or its respective Subsidiaries which own Equity Interests in the Subsidiary paying such Dividends receive at least their proportionate share thereof (based upon their relative holdings of the Equity Interests in the Subsidiary paying such cash Dividends and taking into account the relative preferences, if any, of the various classes of Equity Interests of such Subsidiary);

 

(b)                                  the Parent may pay Dividends and cash payments may be made in respect of the BlueMountain Indebtedness (or any Permitted BlueMountain Refinancing Indebtedness); provided that:

 

(i)  no Default or Event of Default exists at the time of declaration of such Dividend and no Default or Event of Default pursuant to Section 9.01, 9.03 (with respect to Section 8.07 only) or 9.05 exists at the time of payment of such Dividend or cash payment in respect of BlueMountain Indebtedness,

 

(ii) the aggregate amount of Restricted Payments made during the period commencing on the Closing Date and ending on any date of determination does not exceed 50% of the Parent’s Consolidated Net Income for the period commencing on the Closing Date and ending on the last day of the fiscal quarter most recently ended for which financial statements have been provided pursuant to Section 7.01(b) or (c) (taken as one accounting period) ,

 

(iii) after giving effect to such Restricted Payments, the Unrestricted Cash and Cash Equivalents of the Parent and its Subsidiaries on a consolidated basis shall be

 

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no less than (A) the minimum amount required under Section 8.07(b)  plus (B) the Remaining Shipyard Payments plus (C) $25,000,000, and

 

(iv) the Aggregate Collateral Vessel Value plus the aggregate Fair Market Value of all ECA Collateral Vessels then acting as security under the ECA Credit Documents shall be at least 200% of the sum of (A) the then aggregate outstanding principal amount of Loans (plus the outstanding loans under the ECA Credit Agreements) minus (B) any cash and Cash Equivalents of the Parent and its Subsidiaries plus (C) the Remaining Shipyard Payments under the ECA Credit Agreements ; and

 

(c)                                   the Borrower may pay or make any Dividends, provided that:

 

(i) no Default or Event of Default exists at the time of such Dividend or would result after giving effect thereto, and

 

(ii) before and immediately after giving effect to such Dividend, the Parent shall be in pro forma compliance with the Financial Covenants; and

 

(d)                                  the Parent may make Restricted Payments provided that (i) no Default or Event of Default exists at the time of the payment thereof and (ii) such payments do not exceed the Equity Proceeds Amount at the time of such payments;

 

(e)                                   interest payments in respect of the BlueMountain Indebtedness (or any Permitted BlueMountain Refinancing Indebtedness) may be paid through the issuance of additional BlueMountain Indebtedness (or Permitted BlueMountain Refinancing Indebtedness) in accordance with the terms thereof;

 

(f)                                    cash payments may be made in respect of the BlueMountain Indebtedness with proceeds from any Permitted BlueMountain Refinancing Indebtedness;

 

(g)                                   cash payments may be made in respect of the BlueMountain Indebtedness (or any Permitted BlueMountain Refinancing Indebtedness) on the final maturity date of such Indebtedness;

 

(h)                                  payments in connection with the Merger in an amount not to exceed $5,000,000;

 

(i) so long as no cash, Indebtedness or other property of the Parent and its Subsidiaries is being paid by the Parent to such employees, former employees, directors or former directors in connection with such repurchase (A) the Parent may repurchase its outstanding Equity Interests held by its or any of its Subsidiary’s employees, former employees, directors and former directors pursuant to (i) that certain Stock Option Grant Agreement, dated as of July 8, 2014, by and between Navig8 Group and L. Spenser Wells, as amended, supplemented or modified from time to time, (ii) that certain Gener8 Maritime, Inc. 2012 Equity Incentive Plan, as amended, and (iii) any grants or awards issued under any future management incentive plan entered into by Parent or any of its Subsidiaries, in each case, in connection with any exercise by such employees, former employees, directors or former directors to purchase the Parent’s Equity Interest and (B) the Parent may repurchase its outstanding Equity Interests in an

 

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amount equal to the value of any withholding taxes in connection with the vesting of any Equity Interests granted to its employees and directors; and

 

(j)                                     the Parent may make cash payments in respect of the BlueMountain Indebtedness (or any Permitted BlueMountain Refinancing Indebtedness); provided that:

 

(i)  no Default or Event of Default exists at the time of declaration of such cash payment,

 

(ii) the aggregate amount of cash payments made pursuant to this clause (j) made during the period commencing on the Closing Date and ending on any date of determination does not exceed the Excess Asset Sale Proceeds Amount ,

 

(iii) after giving effect to such cash payments, the Unrestricted Cash and Cash Equivalents of the Parent and its Subsidiaries on a consolidated basis shall be no less than (A) the minimum amount required under Section 8.07(b)  plus (B) the Remaining Shipyard Payments plus (C) $25,000,000, and

 

(iv) the Aggregate Collateral Vessel Value plus the aggregate Fair Market Value of all ECA Collateral Vessels then acting as security under the ECA Credit Documents shall be at least 200% of the sum of (A) the then aggregate outstanding principal amount of Loans (plus the outstanding loans under the ECA Credit Agreements) minus (B) any cash and Cash Equivalents of the Parent and its Subsidiaries plus (C) the Remaining Shipyard Payments under the ECA Credit Agreements .

 

8.05                         Indebtedness .  The Parent will not, and will not permit any of its Subsidiaries to, contract, create, incur, assume or suffer to exist any Indebtedness other than:

 

(a)                                  Indebtedness incurred pursuant to this Agreement and the other Credit Documents;

 

(b)                                  Indebtedness of the Credit Parties incurred pursuant to the ECA Credit Documents in an aggregate principal amount not to exceed $1,355,045,005 at any time outstanding, less any repayments thereof made after the Closing Date;

 

(c)                                   Interest Rate Protection Agreements and Other Hedging Agreements in respect of currencies entered into in the ordinary course of business and consistent with past practices; provided that in the case of Interest Rate Protection Agreements, the term thereof does not extend beyond the Maturity Date;

 

(d)                                  intercompany loans and advances (i) among the Credit Parties and (ii) made by Subsidiaries of the Parent (other than the Credit Parties) to the Parent or any other Subsidiary of the Parent; provided that any such loans or advances to a Credit Party pursuant to this clause (d) shall be unsecured and subordinated to the Obligations of the respective Credit Party pursuant to written subordination provisions in the form of Exhibit M;

 

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(e)                                   the BlueMountain Indebtedness (or any Permitted BlueMountain Refinancing Indebtedness);

 

(f)                                    additional Indebtedness incurred by the Parent or any Subsidiary (other than the Borrower or any Subsidiary Guarantor) in an aggregate principal amount not to exceed $25,000,000 at any one time outstanding; and

 

(g)                                   the Parent or any Subsidiary (other than the Borrower or any Subsidiary Guarantor) may incur and remain liable for Indebtedness not otherwise permitted under this Section 8.05 so long as (i) no Default or Event of Default exists at the time of such incurrence and after giving effect thereto and (ii) the Parent and its Subsidiaries shall be in pro forma compliance with the Financial Covenants both before and after giving effect to the incurrence of such Indebtedness.

 

8.06                         Transactions with Affiliates .  The Parent will not, and will not permit any of its Subsidiaries to, enter into any transaction or series of related transactions, whether or not in the ordinary course of business, with any Affiliate of such Person, other than on terms and conditions no less favorable to such Person as would be obtained by such Person at that time in a comparable arm’s-length transaction with a Person other than an Affiliate, except that:

 

(a)                                  Restricted Payments may be paid to the extent provided in Section 8.04;

 

(b)                                  loans and investments may be made and other transactions may be entered into between the Parent and its Subsidiaries to the extent permitted by Sections 8.04 and 8.05;

 

(c)                                   as long as the Parent has an independent compensation committee, directors’ fees as determined by such independent compensation committee and, at any time the Parent does not have an independent compensation committee, the Parent may pay reasonable directors’ fees;

 

(d)                                  the Parent and its Subsidiaries may enter into employment agreements or arrangements with their respective officers and employees in the ordinary course of business;

 

(e)                                   the Parent and its Subsidiaries may pay management fees to Wholly-Owned Subsidiaries of the Parent in the ordinary course of business;

 

(f)                                    the Parent and its Subsidiaries may enter into the Intercompany Ship Delivery Agreement;

 

(g)                                   the transactions in existence on the Closing Date which are listed on Schedule VIII shall be permitted; and

 

(h) technical, administrative and commercial management agreements with Navig8 Group which are listed on Schedule VIII , as such agreements may be amended from time to time in a matter that is not adverse to the Parent and its Subsidiaries.

 

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8.07                         Financial Covenants . (a)            Maximum Consolidated Leverage .  The Parent will not permit the Consolidated Leverage Ratio to be greater than (i) on the last day of any Test Period on or after December 31, 2015 but prior to (and not including) June 30, 2017, 0.65 to 1.00 and (ii) on the last day of any Test Period on or after June 30, 2017, 0.60 to 1.00.

 

(b)                                  Minimum Consolidated Liquidity . The Parent will not permit at any time the cash and Cash Equivalents (which shall include funds on deposit in any Debt Service Reserve Account (if any) valued at 50% of par) held by the Parent and its Subsidiaries to be less than the Minimum Liquidity Amount; provided that, at all times, Unrestricted Cash and Cash Equivalents included in the Minimum Liquidity Amount shall be no less than $25,000,000.

 

(c)                                   Interest Coverage Ratio .  The Parent will not permit the Interest Expense Coverage Ratio for any Test Period ending on or after December 31, 2015 to be less than 2.50:1.00.

 

(d)                                  Collateral Maintenance . The Parent will not permit the aggregate Fair Market Value of all Collateral Vessels owned by the Credit Parties which have not been sold, transferred, lost or otherwise disposed of at any time (such value, the “ Aggregate Collateral Vessel Value ”), as determined by the most recent Appraisals delivered by the Borrower to the Facility Agent or obtained by the Facility Agent in accordance with Section 7.01(c), at any time to equal less than (i) from the Closing Date to and including September 3, 2017, 135% of an amount equal to the aggregate principal amount of Loans outstanding at such time, and (ii) thereafter, 140% of an amount equal to the principal amount of Loans outstanding at such time; provided that any non-compliance with this Section 8.07(d) shall not constitute an Event of Default (but shall constitute a Default), so long as within 30 days of the occurrence of such non-compliance, the Borrower shall either (x) post Additional Collateral (and shall during such period, and prior to satisfactory completion thereof, be diligently carrying out such actions) or (y) prepay Loans in an amount sufficient to cure such non-compliance.

 

8.08                         Limitation on Modifications of Certificate of Incorporation, By-Laws and Certain Other Agreements; etc.   (a) The Parent will not, and will not permit the Borrower or any Subsidiary Guarantor to, amend, modify or change its Organizational Documents or any agreement entered into by it with respect to its Equity Interests (including any shareholders’ agreement), or enter into any new agreement with respect to its Equity Interests, other than any amendments, modifications or changes or any such new agreements which are not in any way materially adverse to the interests of the Lenders.

 

(b) Notwithstanding the foregoing, upon not less than 30 days prior written notice to the Facility Agent and so long as no Default or Event of Default exists and is continuing, any Subsidiary Guarantor may change its jurisdiction of organization to another jurisdiction reasonably satisfactory to the Facility Agent, provided that any Subsidiary Guarantor that has entered into the Security Documents hereunder shall promptly take all actions reasonably deemed necessary by the Collateral Agent to preserve, protect and maintain, without interruption, the security interest and Lien of the Collateral Agent in any Collateral owned by such Subsidiary Guarantor to the satisfaction of the Collateral Agent, and such Subsidiary Guarantor shall have provided to the Facility Agent and the Lenders such opinions of counsel as

 

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may be reasonably requested by the Facility Agent to assure itself that the conditions of this proviso have been satisfied.

 

8.09                         Limitation on Certain Restrictions on Subsidiaries .  The Parent will not, and will not permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any such Subsidiary to (a) pay dividends or make any other distributions on its capital stock or any other interest or participation in its profits owned by the Parent or any Subsidiary of the Parent, or pay any Indebtedness owed to the Parent or a Subsidiary of the Parent, (b) make loans or advances to the Parent or any of the Parent’s Subsidiaries or (c) transfer any of its properties or assets to the Parent or any of the Parent’s Subsidiaries, except for such encumbrances or restrictions existing under or by reason of (i) applicable law, (ii) this Agreement and the other Credit Documents, (iii) the ECA Credit Agreements to the extent applicable, or any refinancing thereof or amendments thereto, and the other ECA Credit Documents, (iv) customary provisions restricting subletting or assignment of any lease governing a leasehold interest of the Parent or a Subsidiary of the Parent, (v) customary provisions restricting assignment of any agreement entered into by the Parent or a Subsidiary of the Parent in the ordinary course of business, (vi) restrictions which are not more restrictive than those contained in this Agreement for any documents governing any Indebtedness incurred after the Closing Date in accordance with the terms of this Agreement and (vii) the BlueMountain Indebtedness (or any Permitted BlueMountain Refinancing Indebtedness).

 

8.10                         Limitation on Issuance of Equity Interests .  (a)  The Parent will not issue, and will not permit any Subsidiary to issue, any preferred stock (or equivalent equity interests) other than Qualified Preferred Stock.

 

(b)                                  The Parent will not permit the Borrower or any Subsidiary Guarantor to issue any capital stock (including by way of sales of treasury stock) or any options or warrants to purchase, or securities convertible into, capital stock, except (i) for transfers and replacements of then outstanding shares of capital stock, (ii) for stock splits, stock dividends and additional issuances which do not decrease the percentage ownership of the Parent or any of its Subsidiaries in any class of the capital stock of such Subsidiary, (iii) to qualifying directors to the extent required by applicable law, (iv) to such Person’s shareholders or in connection with any investment permitted under this Agreement, and (v) to the Borrower or another Subsidiary Guarantor, in the case of a Subsidiary Guarantor, or to the Parent, in the case of the Borrower.  All capital stock of the Borrower or any Subsidiary Guarantor issued in accordance with this Section 8.10(b) shall be delivered to the Collateral Agent pursuant to the Pledge Agreement.

 

8.11                         Business . (a)                             The Parent and its Subsidiaries will not engage in any business other than the businesses in which any of them is engaged in as of the Closing Date (or, in the case of any Subsidiary that is formed or incorporated after the Closing Date, any business in which the Parent or any other Subsidiary is engaged as of the Closing Date) and activities directly related thereto, and similar or related maritime businesses.

 

(b)                                  The Borrower and Subsidiary Guarantors will not engage in any operating or business activities other than: (i) ownership, management or operation of the Collateral Vessels, (ii) maintenance of legal existence (including the ability to incur fees, costs, expenses

 

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and taxes relating to such management), (iii) the entering into and performance of its obligations under this Agreement and the other Credit Documents and its Organizational Documents, (iv) if applicable, participating in tax, accounting and other administrative matters as a member of the consolidated group of the Parent and its Subsidiaries, (v) holding any cash, Cash Equivalents and other property necessary or desirable in connection with or incidental to, the ownership, management and operation of the Collateral Vessels, (vi) payment of Dividends, incurring Indebtedness and any other activities to the extent permitted hereunder and under the other Credit Documents, (vii) providing indemnification to officers and directors and (viii) any activities incidental or reasonably related to the foregoing.

 

8.12                         Jurisdiction of Employment .  The Parent will not, and will not permit the Subsidiary Guarantors or any third party charterer of a Collateral Vessel to, employ or cause to be employed any Collateral Vessel in any country or jurisdiction in which (i) the Borrower, the Subsidiary Guarantors or such third party charterer of a Collateral Vessel is prohibited by law from doing business, (ii) the Lien created by the applicable Collateral Vessel Mortgage will be rendered unenforceable or (iii) the Collateral Agent’s foreclosure or enforcement rights will be materially impaired or hindered.

 

8.13                         Chartering Arrangements

 

Notwithstanding anything to the contrary set forth in this Agreement and any other Credit Documents, with respect to any charter of a Collateral Vessel through any pool entered into with an Acceptable Pool Manager such charter may only be entered into between the Subsidiary Guarantor which owns such Collateral Vessels and the relevant Acceptable Pool Manager and in no event shall the Parent or any Subsidiary thereof (other than the Subsidiary Guarantor owning such Collateral Vessel) have any obligations thereunder.

 

8.14                         Special Provisions Relating to the BlueMountain Indebtedness.   Notwithstanding anything to the contrary set forth in this Agreement and any other Credit Documents, the Parent will not, and will not permit any Subsidiary to:

 

(a)                                  amend, modify, refinance or replace the BlueMountain Indebtedness (or any Permitted BlueMountain Refinancing Indebtedness) in a manner such that the BlueMountain Indebtedness (or such Permitted BlueMountain Refinancing Indebtedness) will not comply with the BlueMountain Indebtedness Requirements; or

 

(b)                                  pay any interest in respect of the BlueMountain Indebtedness (or any Permitted BlueMountain Refinancing Indebtedness) in cash or make any other prepayment or redemption thereof, other than as permitted pursuant to Section 8.04; or

 

(c)                                   permit any vessels other than the ECA Collateral Vessels under the K-Sure Facility on the date hereof to be owned by Gener8 Maritime Subsidiary V Inc. or any of its Subsidiaries; or

 

(d)                                  permit Gener8 Maritime Subsidiary V Inc. or any of its Subsidiaries to hold cash and Cash Equivalents in excess of an amount reasonably determined by the Parent to be necessary to fund operations of Gener8 Maritime Subsidiary V Inc. and its Subsidiaries in the ordinary course of business.

 

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Section 9.                                            Events of Default .  Upon the occurrence of any of the following specified events (each an “ Event of Default ”):

 

9.01                         Payments .  The Borrower shall (i) default in the payment when due of any principal of the Loan or any Note or (ii) default, and such default shall continue unremedied for three or more Business Days, in the payment when due of any interest on any Loan or Note, or any other amounts owing hereunder or thereunder; or

 

9.02                         Representations, etc.   Any representation, warranty or statement made by any Credit Party herein or in any other Credit Document or in any certificate delivered pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which made or deemed made; or

 

9.03                         Covenants .  Any Credit Party shall (i) default in the due performance or observance by it of any term, covenant or agreement contained in Section 7.01(e)(i), 7.08, 7.11(a), 7.13 or Section 8 or (ii) default in the due performance or observance by it of any other term, covenant or agreement contained in this Agreement or any other Credit Document and, in the case of this clause (ii), such default shall continue unremedied for a period of 30 days after written notice to the Borrower by the Facility Agent or any of the Lenders; or

 

9.04                         Default Under Other Agreements .  (i)  The Parent or any of its Subsidiaries shall default in any payment of any Indebtedness (other than the Obligations) beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created or (ii) the Parent or any of its Subsidiaries shall default in the observance or performance of any agreement or condition relating to any Indebtedness (other than the Obligations) or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such Indebtedness to become due prior to its stated maturity or (iii) any Indebtedness (other than the Obligations) of the Parent or any of its Subsidiaries shall be declared to be due and payable, or required to be prepaid, redeemed, defeased or repurchased other than by a regularly scheduled required prepayment or in connection with an asset sale, casualty or condemnation or other similar mandatory prepayment prior to the stated maturity thereof, provided that it shall not be a Default or Event of Default under this Section 9.04 unless the aggregate principal amount of all Indebtedness as described in preceding clauses (i) through (iii), inclusive, exceeds (x) in the case of the Parent or any Subsidiary of the Parent (other than the Borrower or a Subsidiary Guarantor), $10,000,000, or (y) in the case of the Borrower or a Subsidiary Guarantor, $1,000,000; or

 

9.05                         Bankruptcy, etc .  The Parent or any of its Subsidiaries (other than any Immaterial Subsidiaries) shall (i) commence a voluntary case concerning itself under Title 11 of the United States Code entitled “Bankruptcy,” as now or hereafter in effect, or any successor thereto (the “ Bankruptcy Code ”) or any other Debtor Relief Law; (ii) be the subject of an involuntary proceeding under any Debtor Relief Law, which is not dismissed within 60 days, after commencement of such proceeding; (iii) apply for, seek, consent to, or acquiesce in the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it, or for

 

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all or substantially all of its property; (iv) have an order for relief entered with respect to it under any Debtor Relief Laws or similar laws as now or hereafter in effect, (v) fail to pay, or admit in writing its inability to pay, its debts generally as they become due, (vi) be adjudicated insolvent or bankrupt; (vii) make an assignment for the benefit of creditors; or (viii) take any corporate action for the purpose of effecting any of the foregoing; or

 

9.06                         ERISA .  (a) (i) Any Plan shall fail to satisfy the minimum funding standard required for any plan year or part thereof under Section 412 of the Code or Section 302 of ERISA or a waiver of such standard or extension of any amortization period is sought or granted under Section 412 or 430 of the Code or Section 302 or 303 of ERISA, or

 

(ii) a Reportable Event shall have occurred, or

 

(iii) a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA shall be subject to the advance reporting requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur with respect to such Plan within the following 30 days, or

 

(iv) any Plan which is subject to Title IV of ERISA shall have had or is reasonably likely to have a trustee appointed to administer such Plan, or

 

(v) any Plan which is subject to Title IV of ERISA is, shall have been or is reasonably likely to be terminated or to be the subject of termination proceedings under ERISA, or

 

(vi) any Plan shall have an Unfunded Current Liability, its actuary has certified that a determination has been made that a Plan (other than a Multiemployer Plan) is an at-risk plan within the meaning of Section 430 of the Code or Section 303 of ERISA, or

 

(vii) a Plan which is a Multiemployer Plan is in endangered or critical status under Section 305 of ERISA, or

 

(viii) a contribution required to be made with respect to a Plan or a Foreign Pension Plan is not timely made, or

 

(ix) the Parent or any of its Subsidiaries or any ERISA Affiliate has incurred or events have happened, or reasonably expected to happen, that will cause it to incur any liability to or on account of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 436(f), 4971 or 4975 of the Code or on account of a group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code, or

 

(x) the Parent, or any of its Subsidiaries, has incurred or is reasonably likely to incur liabilities pursuant to one or more employee welfare benefit plans (as defined in Section 3(1) of ERISA) that provide benefits to retired employees or other former employees (other than as required by Section 601 of ERISA) or Plans or Foreign Pension Plans; or

 

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(b) there shall result from any such event or events the imposition of a lien, the granting of a security interest, or a liability or a material risk of incurring a liability; or

 

(c) such lien, security interest or liability, individually, and/or in the aggregate, in the reasonable opinion of the Required Lenders, has had, or could reasonably be expected to have, a Material Adverse Effect; or

 

9.07                         Security Documents .  At any time after the execution and delivery thereof, any of the Security Documents shall cease to be in full force and effect, or shall cease in any material respect to give the Collateral Agent for the benefit of the Secured Creditors the Liens, rights, powers and privileges purported to be created thereby (including, without limitation, a perfected security interest in, and Lien on, all of the Collateral), in favor of the Collateral Agent, superior to and prior to the rights of all third Persons (except in connection with Permitted Liens), and subject to no other Liens (except Permitted Liens), or any Credit Party shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to any of the Security Documents and such default shall continue beyond any grace period (if any) specifically applicable thereto pursuant to the terms of such Security Document, or any “event of default” (as defined in any Collateral Vessel Mortgage) shall occur in respect of any Collateral Vessel Mortgage; or

 

9.08                         Guaranties .  After the execution and delivery thereof, any Guaranty, or any provision thereof, shall cease to be in full force or effect as to any Guarantor (unless such Guarantor is no longer a Subsidiary of the Parent by virtue of a liquidation, sale, merger or consolidation permitted by Section 8.02) or any Guarantor (or Person acting by or on behalf of such Guarantor) shall deny or disaffirm such Guarantor’s obligations under the Guaranty to which it is a party or any Guarantor shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to the Guaranty to which it is a party beyond any grace period (if any) provided therefor; or

 

9.09                         Judgments .  One or more judgments or decrees shall be entered against the Parent or any of its Subsidiaries involving in the aggregate for the Parent and its Subsidiaries a liability (not paid or fully covered by a reputable and solvent insurance company) and such judgments and decrees either shall be final and non-appealable or shall not be vacated, discharged or stayed or bonded pending appeal for any period of 60 consecutive days, and the aggregate amount of all such judgments, to the extent not covered by insurance, exceeds $10,000,000; or

 

9.10                         Change of Control .  At any time after the Closing Date, a Change of Control shall occur.

 

Upon the occurrence and during the continuance of an Event of Default, the Facility Agent may and, upon the written request of the Required Lenders, shall by written notice to the Borrower, take any or all of the following actions, without prejudice to the rights of the Facility Agent, any Lender or the holder of any Note to enforce its claims against any Credit Party: (i) declare the principal of and any accrued interest in respect of all or any part of the Loans and the Notes and all Obligations owing hereunder and thereunder to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Credit Party; and (ii) enforce, as Collateral Agent, all of the

 

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Liens and security interests created pursuant to the Security Documents; provided , however , that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Parent, the Borrower or any Subsidiary Guarantor under the Bankruptcy Code, the principal of and any accrued interest in respect of all Loans and the Notes and all Obligations owing hereunder and thereunder shall automatically become due and payable without further act of the Facility Agent, the Collateral Agent or any Lender.

 

Section 10.                                     Agency and Security Trustee Provisions .

 

10.01                  Appointment .  (a) The Lenders in their capacity as Lenders and the Other Creditors (by their acceptance of the benefits hereof and of the other Credit Documents) hereby designate and appoint Nordea as Facility Agent (for purposes of this Section 10, the term “ Facility Agent ” shall include Nordea (and/or any of its affiliates) in its capacity as Collateral Agent pursuant to the Security Documents and in its capacity as mortgagee (if applicable) and security trustee pursuant to the Collateral Vessel Mortgages) to act as specified herein and in the other Credit Documents.  Each Lender hereby irrevocably authorizes, and each holder of any Note by the acceptance of such Note shall be deemed irrevocably to authorize, the Agents to take such action on its behalf under the provisions of this Agreement, the other Credit Documents and any other instruments and agreements referred to herein or therein and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of the Agents by the terms hereof and thereof and such other powers as are reasonably incidental thereto.  The Agents may perform any of their duties hereunder by or through its respective officers, directors, agents, employees or affiliates and, may assign from time to time any or all of its rights, duties and obligations hereunder and under the Security Documents to any of its banking affiliates.

 

(b)                                  The Lenders hereby irrevocably designate and appoint Nordea as security trustee solely for the purpose of holding the Collateral Vessel Mortgages on each of the Collateral Vessels in an Acceptable Flag Jurisdiction on behalf of the Lenders, from time to time, with regard to the (i) security, powers, rights, titles, benefits and interests (both present and future) constituted by and conferred on the Lenders or any of them or for the benefit thereof under or pursuant to the Collateral Vessel Mortgages (including, without limitation, the benefit of all covenants, undertakings, representations, warranties and obligations given, made or undertaken by any Lender in the Collateral Vessel Mortgages), (ii) all money, property and other assets paid or transferred to or vested in any Lender or any agent of any Lender or received or recovered by any Lender or any agent of any Lender pursuant to, or in connection with the Collateral Vessel Mortgages, whether from the Borrower or any Subsidiary Guarantor or any other person and (iii) all money, investments, property and other assets at any time representing or deriving from any of the foregoing, including all interest, income and other sums at any time received or receivable by any Lender or any agent of any Lender in respect of the same (or any part thereof).  Nordea hereby accepts such appointment as security trustee.

 

10.02                  Nature of Duties .  (a)  The Agents shall have no duties or responsibilities except those expressly set forth in this Agreement and the Security Documents.  None of the Agents nor any of their respective officers, directors, agents, employees or affiliates shall be liable for any action taken or omitted by it or them hereunder or under any other Credit Document or in connection herewith or therewith, unless caused by such Person’s gross negligence or willful

 

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misconduct as determined by a court of competent jurisdiction in a final and non-appealable decision (any such liability limited to the applicable Agent to whom such Person relates).  The duties of each of the Agents shall be mechanical and administrative in nature; none of the Agents shall have by reason of this Agreement or any other Credit Document any fiduciary relationship in respect of any Lender or the holder of any Note.  Nothing in this Agreement or any other Credit Document, expressed or implied, is intended to or shall be so construed as to impose upon any Agents any obligations in respect of this Agreement or any other Credit Document except as expressly set forth herein or therein.

 

(b)                                  It is understood and agreed that the use of the term “agent” herein or in any other Credit Documents (or any other similar term) with reference to the Facility Agent in such capacity is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

 

10.03                  Lack of Reliance on the Agents .  Independently and without reliance upon the Agents, each Lender and the holder of each Note, to the extent it deems appropriate, has made and shall continue to make (i) its own independent investigation of the financial condition and affairs of the Parent and its Subsidiaries in connection with the making and the continuance of the Loans and the taking or not taking of any action in connection herewith and (ii) its own appraisal of the creditworthiness of the Parent and its Subsidiaries and, except as expressly provided in this Agreement, none of the Agents shall have any duty or responsibility, either initially or on a continuing basis, to provide any Lender or the holder of any Note with any credit or other information with respect thereto, whether coming into its possession before the making of the Loans or at any time or times thereafter.  None of the Agents shall be responsible to any Lender or the holder of any Note for any recitals, statements, information, representations or warranties herein or in any document, certificate or other writing delivered in connection herewith or for the execution, effectiveness, genuineness, validity, enforceability, perfection, collectability, priority or sufficiency of this Agreement or any other Credit Document or the financial condition of the Parent and its Subsidiaries or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement or any other Credit Document, or the financial condition of the Parent and its Subsidiaries or the existence or possible existence of any Default or Event of Default.

 

10.04                  Certain Rights of the Agents .  If any of the Agents shall request instructions from the Required Lenders with respect to any act or action (including failure to act) in connection with this Agreement or any other Credit Document, the Agents shall be entitled to refrain from such act or taking such action unless and until the Agents shall have received instructions from the Required Lenders; and the Agents shall not incur liability to any Person by reason of so refraining.  Without limiting the foregoing, no Lender or the holder of any Note shall have any right of action whatsoever against the Agents as a result of any of the Agents acting or refraining from acting hereunder or under any other Credit Document in accordance with the instructions of the Required Lenders.

 

10.05                  Reliance .  Each of the Agents shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate, telex, teletype, email

 

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or telecopier message, order or other document or telephone message signed, sent or made by any Person that the applicable Agent believed to be the proper Person, and, with respect to all legal matters pertaining to this Agreement and any other Credit Document and its duties hereunder and thereunder, upon advice of counsel selected by the Facility Agent.

 

10.06                  Indemnification .  To the extent any of the Agents is not reimbursed and indemnified by the Borrower, the Lenders severally agree to reimburse and indemnify the applicable Agents, in proportion to their respective “percentages” as used in determining the Required Lenders (without regard to the existence of any Defaulting Lenders), for and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, costs, expenses or disbursements of whatsoever kind or nature which may be imposed on, asserted against or incurred by such Agents in performing their respective duties hereunder or under any other Credit Document, in any way relating to or arising out of this Agreement or any other Credit Document (including, without limitation, as a result of a breach of any Sanctions Laws by a Credit Party); provided that no Lender shall be liable in respect to an Agent for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Agent’s gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).  The indemnities contained in this Section 10.06 shall cover any cost, loss or liability incurred by each Indemnified Party in any jurisdiction arising or asserted under or in connection with any law relating to safety at sea, the ISM Code, the ISPS Code or any Environmental Law.

 

10.07                  The Facility Agent in its Individual Capacity .  With respect to its obligation to make Loans under this Agreement, each of the Agents shall have the rights and powers specified herein for a “Lender” and may exercise the same rights and powers as though it were not performing the duties specified herein; and the term “Lenders,” “Secured Creditors”, “Required Lenders”, “holders of Notes” or any similar terms shall, unless the context clearly otherwise indicates, include each of the Agents in their respective individual capacity.  Each of the Agents may accept deposits from, lend money to, and generally engage in any kind of banking, trust or other business with any Credit Party or any Affiliate of any Credit Party as if it were not performing the duties specified herein, and may accept fees and other consideration from the Borrower or any other Credit Party for services in connection with this Agreement and otherwise without having to account for the same to the Lenders.

 

10.08                  Holders .  The Facility Agent may deem and treat the payee of any Note as the owner thereof for all purposes hereof unless and until a written notice of the assignment, transfer or endorsement thereof, as the case may be, shall have been filed with the Facility Agent.  Any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is the holder of any Note shall be conclusive and binding on any subsequent holder, transferee, assignee or endorsee, as the case may be, of such Note or of any Note or Notes issued in exchange therefor.

 

10.09                  Resignation by the Facility Agent .  (a)  The Facility Agent may resign from the performance of all its functions and duties hereunder and/or under the other Credit Documents at any time by giving 15 Business Days’ prior written notice to the Borrower and the Lenders.  Such resignation shall take effect upon the appointment of a successor Facility Agent pursuant to clauses (b) and (c) below or as otherwise provided below.

 

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(b)                                  Upon a notice of resignation delivered by the Facility Agent pursuant to Section 10.09(a), the Required Lenders shall appoint a successor Facility Agent hereunder or thereunder who shall be a commercial bank or trust company that is, unless an Event of Default has occurred and is continuing at such time, reasonably acceptable to the Borrower.

 

(c)                                   If, following the delivery of a notice of resignation by the Facility Agent pursuant to Section 10.09(a), a successor Facility Agent shall not have been so appointed within such 15 Business Day period, the Facility Agent, with the consent of the Borrower (which shall not be unreasonably withheld or delayed and shall not be required if an Event of Default has occurred and is continuing at such time), shall then appoint a commercial bank or trust company with capital and surplus of not less than $500,000,000 as successor Facility Agent who shall serve as Facility Agent hereunder until such time, if any, as the Required Lenders appoint a successor Facility Agent as provided above.

 

(d)                                  If no successor Facility Agent has been appointed pursuant to clause (b) or (c) above by the 25th Business Day after the date such notice of resignation was given by the Facility Agent, the Facility Agent’s resignation shall become effective and the Required Lenders shall thereafter perform all the duties of the Facility Agent hereunder and/or under any other Credit Document until such time, if any, as the Required Lenders appoint a successor Facility Agent as provided above.

 

(e)                                   The Facility Agent may resign from the performance of all its functions and duties hereunder and/or under the other Credit Documents at any time and may appoint one of its Affiliates, including, without limitation, Nordea Bank AB (publ) as a successor by giving 5 Business Days’ prior written notice to the Borrower and the Lenders.  The Facility Agent shall bear all reasonable documentation costs incurred in connection with the Facility Agent’s resignation under this clause (e).

 

10.10                  The Mandated Lead Arrangers .  Notwithstanding any other provision of this Agreement or any provision of any other Credit Document, each of the Mandated Lead Arrangers are named as such for recognition purposes only, and in their respective capacities as such shall have no powers, duties, responsibilities or liabilities with respect to this Agreement or the other Credit Documents or the transactions contemplated hereby and thereby; it being understood and agreed that the Mandated Lead Arrangers shall be entitled to all indemnification and reimbursement rights in favor of any of the Agents as provided for under Sections 10.06 and 11.01.  Without limitation of the foregoing, none of the Mandated Lead Arrangers shall, solely by reason of this Agreement or any other Credit Documents, have any fiduciary relationship in respect of any Lender or any other Person.

 

10.11                  Collateral Matters .  (a)  Each Lender authorizes and directs the Collateral Agent to enter into the Security Documents for the benefit of the Lenders and the other Secured Creditors.  Each Lender hereby agrees, and each holder of any Note by the acceptance thereof will be deemed to agree, that, except as otherwise set forth herein, any action taken by the Required Lenders in accordance with the provisions of this Agreement or the Security Documents, and the exercise by the Required Lenders of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Lenders.  The Collateral Agent is hereby authorized on behalf of all of

 

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the Lenders, without the necessity of any notice to or further consent from any Lender, from time to time prior to or during an Event of Default, to take any action with respect to any Collateral or Security Documents which may be necessary to perfect and maintain perfected the security interest in and Liens upon the Collateral granted pursuant to the Security Documents.

 

(b)                            The Lenders hereby authorize the Collateral Agent, at its option and in its discretion, to release any Lien on any property granted to or held by the Collateral Agent under any Credit Document (i) upon payment and satisfaction of all of the Obligations (other than inchoate indemnification obligations) at any time arising under or in respect of this Agreement or the Credit Documents or the transactions contemplated hereby or thereby, (ii) that is sold or otherwise disposed of (to Persons other than the Borrower and its Subsidiaries) upon the sale or other disposition thereof in compliance with Section 8.02, (iii) if approved, authorized or ratified in writing by the Required Lenders (or all of the Lenders hereunder, to the extent required by Section 11.13) or (iv) as otherwise may be expressly provided in the relevant Security Documents.  Upon request by the Facility Agent at any time, the Lenders will confirm in writing the Collateral Agent’s authority to release particular types or items of Collateral pursuant to this Section 10.11.

 

(c)                             The Lenders hereby agree to, and direct the Facility Agent and the Collateral Agent to, automatically release any Subsidiary Guarantor from the Subsidiaries Guaranty (i) upon payment and satisfaction of all of the Obligations (other than inchoate indemnification obligations) at any time arising under or in respect of this Agreement or the Credit Documents or the transactions contemplated hereby or thereby, (ii) that is wound up, liquidated, dissolved, merged consolidated or amalgamated in compliance with Section 8.02, (iii) if approved, authorized or ratified in writing by the Required Lenders (or all of the Lenders hereunder, to the extent required by Section 11.13) or (iv) as otherwise may be expressly provided in the Subsidiaries Guaranty.

 

(d)                            The Collateral Agent shall have no obligation whatsoever to the Lenders or to any other Person to assure that the Collateral exists or is owned by any Credit Party or is cared for, protected or insured or that the Liens granted to the Collateral Agent herein or pursuant hereto have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to exercise or to continue exercising at all or in any manner or under any duty of care, disclosure or fidelity any of the rights, authorities and powers granted or available to the Collateral Agent in this Section 10.11 or in any of the Security Documents, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, the Collateral Agent may act in any manner it may deem appropriate, in its sole discretion, given the Collateral Agent’s own interest in the Collateral as one of the Lenders and that the Collateral Agent shall have no duty or liability whatsoever to the Lenders, except for its gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).

 

(e)                             (i) The Other Creditors shall not have any right whatsoever to do any of the following:  (A) exercise any rights or remedies with respect to the Collateral or to direct any Agent to do the same, including, without limitation, the right to (1) enforce any Liens or sell or otherwise foreclose on any portion of the Collateral, (2) request any action, institute any proceedings, exercise any voting rights, give any instructions, make any election or make

 

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collections with respect to all or any portion of the Collateral or (3) release any Credit Party under any Credit Document or release any Collateral from the Liens of any Security Document or consent to or otherwise approve any such release; (B) demand, accept or obtain any Lien on any Collateral (except for Liens arising under, and subject to the terms of, the Credit Documents); (C) vote in any case concerning any Credit Party under the Bankruptcy Code or any other proceeding under any reorganization, arrangement, adjudication of debt, relief of debtors, dissolution, insolvency, liquidation or similar proceeding in respect of the Credit Parties or any of their respective Subsidiaries (any such proceeding, for purposes of this clause (e)(i), a “ Bankruptcy Proceeding ”) with respect to, or take any other actions concerning the Collateral; (D) receive any proceeds from any sale, transfer or other disposition of any of the Collateral (except in accordance with this Agreement); (E) oppose any sale, transfer or other disposition of the Collateral; (F) object to any debtor-in-possession financing in any Bankruptcy Proceeding which is provided by one or more Lenders among others (including on a priming basis under Section 364(d) of the Bankruptcy Code); (G) object to the use of cash collateral in respect of the Collateral in any Bankruptcy Proceeding; or (H) seek, or object to the Lenders or any Agent seeking on an equal and ratable basis, any adequate protection or relief from the automatic stay with respect to the Collateral in any Bankruptcy Proceeding.

 

(ii)                                   Each Other Creditor, by its acceptance of the benefits of this Agreement and the other Credit Documents, agrees that in exercising rights and remedies with respect to the Collateral, the Agents and the Lenders, with the consent of the Agents, may enforce the provisions of the Credit Documents and exercise remedies thereunder (or refrain from enforcing rights and exercising remedies), all in such order and in such manner as they may determine in the exercise of their sole business judgment.  Such exercise and enforcement shall include, without limitation, the rights to collect, sell, dispose of or otherwise realize upon all or any part of the Collateral, to incur expenses in connection with such collection, sale, disposition or other realization and to exercise all the rights and remedies of a secured lender under the UCC.  The Other Creditors by their acceptance of the benefits of this Agreement and the other Credit Documents hereby agree not to contest or otherwise challenge any such collection, sale, disposition or other realization of or upon all or any of the Collateral. Whether or not a Bankruptcy Proceeding has been commenced, the Other Creditors shall be deemed to have consented to any sale or other disposition of any property, business or assets of the Credit Parties and the release of any or all of the Collateral from the Liens of any Security Document in connection therewith.

 

(iii)                                  To the maximum extent permitted by law, each Other Creditor waives any claim it might have against the Agents or the Lenders with respect to, or arising out of, any action or failure to act or any error of judgment, negligence, or mistake or oversight whatsoever on the part of any Agent or the Lenders or their respective directors, officers, employees or agents with respect to any exercise of rights or remedies under the Credit Documents or any transaction relating to the Collateral (including, without limitation, any such exercise described in Section 10.11(e)(ii)), except for any such action or failure to act that constitutes willful misconduct or gross negligence of such Person.  To the maximum extent permitted by applicable law, none of either Agent or any Lender or any of their respective directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or

 

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shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of Parent, any Subsidiary of Parent, any Other Creditor or any other Person or to take any other action or forbear from doing so whatsoever with regard to the Collateral or any part thereof, except for any such action or failure to act that constitutes willful misconduct or gross negligence of such Person .

 

10.12                  Delivery of Information .  The Agents shall not be required to deliver to any Lender originals or copies of any documents, instruments, notices, communications or other information received by the Agents from any Credit Party, any Subsidiary, the Required Lenders, any Lender or any other Person under or in connection with this Agreement or any other Credit Document except (i) as specifically provided in this Agreement or any other Credit Document and (ii) as specifically requested from time to time in writing by any Lender with respect to a specific document, instrument, notice or other written communication received by and in the possession of any Agent at the time of receipt of such request and then only in accordance with such specific request.

 

Section 11.                                     Miscellaneous .

 

11.01                  Payment of Expenses, etc. (a)  The Borrower agrees that it shall:  (i) pay all reasonable out-of-pocket costs and expenses of each of the Agents and their Affiliates (including, without limitation, the reasonable fees and disbursements of White & Case LLP, other counsel to the Facility Agent and the Mandated Lead Arrangers and local counsel) in connection with the preparation, execution and delivery of this Agreement and the other Credit Documents and the documents and instruments referred to herein and therein and any amendment, waiver or consent relating hereto or thereto, of the Agents in connection with their respective syndication efforts with respect to this Agreement and of the Agents and each of the Lenders in connection with the enforcement of this Agreement and the other Credit Documents and the documents and instruments referred to herein and therein (including, without limitation, the reasonable fees and disbursements of counsel (including in-house counsel) for each of the Agents and for each of the Lenders) and (ii) pay and hold each of the Lenders harmless from and against any and all present and future stamp, documentary, transfer, sales and use, value added, excise and other similar taxes with respect to the foregoing matters and save each of the Lenders harmless from and against any and all liabilities with respect to or resulting from any delay or omission (other than to the extent attributable to such Lender) to pay such taxes.

 

(b) In addition, the Borrower shall indemnify the Agents, the Collateral Agent and each Lender, and each of their respective officers, directors, trustees, employees, representatives and agents (collectively, the “ Indemnified Parties ”) from and hold each of them harmless against any and all liabilities, obligations (including removal or remedial actions), losses, damages, penalties, claims, actions, judgments, civil penalties, fines, settlements, suits, costs, expenses and disbursements (including reasonable attorneys’ and consultants’ fees and disbursements) incurred by, imposed on or assessed against any of them as a result of, or arising out of, or in any way related to, or by reason of: (i) any investigation, litigation or other proceeding (whether or not any of the Agents, the Collateral Agent or any Lender is a party thereto) related to the entering into and/or performance of this Agreement or any other Credit Document or the use of proceeds of any Loans hereunder or the consummation of any transactions contemplated herein, or in any other Credit Document or the exercise of any of their rights or remedies provided

 

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herein or in the other Credit Documents, (ii) the actual or alleged presence of Hazardous Materials on any Collateral Vessel or in the air, surface water or groundwater or on the surface or subsurface of any property at any time owned or operated by the Borrower or any of its Subsidiaries, (iii) the generation, storage, transportation, handling, disposal or Environmental Release of Hazardous Materials at any location, whether or not owned or operated by the Borrower or any of its Subsidiaries, (iv) the non-compliance of any Collateral Vessel or property with foreign, federal, state and local laws, regulations, and ordinances (including applicable permits thereunder) applicable to any Collateral Vessel or property, (v) any Environmental Claim asserted against the Borrower, any of its Subsidiaries or any Collateral Vessel or property at any time owned or operated by the Borrower or any of its Subsidiaries or (vi) the conduct of any Credit Party or any of its partners, directors, officers, employees, agents or advisors that violates any Sanctions Laws, including, in each case, without limitation, the reasonable fees and disbursements of counsel and other consultants incurred in connection with any such investigation, litigation or other proceeding (but excluding any losses, liabilities, claims, damages, penalties, actions, judgments, suits, costs, disbursements or expenses to the extent incurred by reason of the gross negligence or willful misconduct of such Indemnified Party).  To the extent that the undertaking to indemnify, pay or hold harmless each of the Agents or any Lender set forth in the preceding sentence may be unenforceable because it violates any law or public policy, the Borrower shall make the maximum contribution to the payment and satisfaction of each of the indemnified liabilities which is permissible under applicable law.  Notwithstanding the foregoing, no party hereto shall be responsible to any Person for any consequential, indirect, special or punitive damages which may be alleged by such Person arising out of this Agreement or the other Credit Documents.

 

11.02      Right of Setoff .  In addition to any rights now or hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, upon the occurrence and during the continuance of an Event of Default, each Lender is hereby authorized at any time or from time to time, without presentment, demand, protest or other notice of any kind to any Credit Party or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other Indebtedness at any time held or owing by such Lender (including, without limitation, by branches and agencies of such Lender wherever located) to or for the credit or the account of any Credit Party but in any event excluding assets held in trust for any such Person against and on account of the Obligations and liabilities of such Credit Party, to such Lender under this Agreement or under any of the other Credit Documents, including, without limitation, all interests in Obligations purchased by such Lender pursuant to Section 11.06(b), and all other claims of any nature or description arising out of or connected with this Agreement or any other Credit Document, irrespective of whether or not such Lender shall have made any demand hereunder and although said Obligations, liabilities or claims, or any of them, shall be contingent or unmatured.

 

11.03      Notices .  Except as otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including telecopier, e-mail communication or other electronic means (including by way of the Facility Agent’s Debtdomain system)) and mailed, telecopied, e-mailed or delivered:  if to any Credit Party, at the address specified on Schedule II ; if to any Lender, at its address specified opposite its name on Schedule II ; and if to the Facility Agent, at its Notice Office; or, as to any other Credit Party, at such other address as shall be designated by such party in a written notice to the other parties hereto and, as

 

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to each Lender, at such other address as shall be designated by such Lender in a written notice to the Borrower and the Facility Agent.  All such notices and communications shall, (i) when mailed, be effective three Business Days after being deposited in the mails, prepaid and properly addressed for delivery, (ii) when sent by overnight courier, be effective one Business Day after delivery to the overnight courier prepaid and properly addressed for delivery on such next Business Day, or (iii) when sent by telecopier, e-mail or other electronic means (including by way of the Facility Agent’s Debtdomain system), be effective when sent by telecopier, e-mail or received via other electronic means in reasonable form except that notices and communications to the Facility Agent shall not be effective until received by the Facility Agent.  All Lenders and Other Creditors confirm that they have consented to the use of the Facility Agent’s Debtdomain system as an accepted method of communication under or in connection with the Credit Documents and agree that the Debtdomain system will be the primary method of communication between the Facility Agent, the Lenders or any Other Creditor.  The Lenders and Other Creditors acknowledge that a communication made via Debtdomain will be effective once the communication is posted to Debtdomain by the Facility Agent.

 

11.04      Benefit of Agreement; Assignments; Participations .  (a)  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto; provided , however , that (i) no Credit Party may assign or transfer any of its rights, obligations or interest hereunder or under any other Credit Document without the prior written consent of the Lenders, (ii) although any Lender may transfer, assign or grant participations in its rights hereunder, such Lender shall remain a “Lender” for all purposes hereunder (and may not transfer or assign all or any portion of its Loans hereunder except as provided in Section 11.04(b)) and the transferee, assignee or participant, as the case may be, shall not constitute a “Lender” hereunder and (iii) no Lender shall transfer or grant any participation under which the participant shall have rights to approve any amendment to or waiver of this Agreement or any other Credit Document except to the extent such amendment or waiver would (x) extend the final scheduled maturity of any Loan or Note in which such participant is participating, or reduce the rate or extend the time of payment of interest thereon (except (I) in connection with a waiver of applicability of any post-default increase in interest rates and (II) that any amendment or modification to the financial definitions in this Agreement shall not constitute a reduction in the rate of interest for purposes of this clause (x)) or reduce the principal amount thereof, or increase the amount of the participant’s participation over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default shall not constitute a change in the terms of such participation, and that an increase in any Loan shall be permitted without the consent of any participant if the participant’s participation is not increased as a result thereof), (y) consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement or (z) release all or substantially all of the Collateral under all of the Security Documents (except as expressly provided in the Credit Documents) securing the Loans hereunder in which such participant is participating.  In the case of any such participation, the participant shall not have any rights under this Agreement or any of the other Credit Documents (the participant’s rights against such Lender in respect of such

 

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participation to be those set forth in the agreement executed by such Lender in favor of the participant relating thereto) and all amounts payable by the Borrower hereunder shall be determined as if such Lender had not sold such participation.  In the case of any such participation, the participant shall not have any rights under this Agreement or any of the other Credit Documents (the participant’s rights against such Lender in respect of such participation to be those set forth in the agreement executed by such Lender in favor of the participant relating thereto) and all amounts payable by the Borrower hereunder shall be determined as if such Lender had not sold such participation.  Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each participant’s interest in the Loan or other obligations under the Note (the “ Participant Register ”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participant’s interest in any commitments, loans or its other obligations under any Note) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Facility Agent (in its capacity as Facility Agent) shall have no responsibility for maintaining a Participant Register.

 

(b)           Notwithstanding the foregoing, any Lender (or any Lender together with one or more other Lenders) may:

 

(x)  assign all or a portion of its outstanding Loans to its (i) parent company and/or any Affiliate of such Lender or its parent company or (ii) in the case of any Lender that is a fund that invests in bank loans, any other fund that invests in bank loans and is managed or advised by the same investment advisor of such Lender or by an Affiliate of such investment advisor (a “ Related Fund ”) or (iii) to one or more Lenders or

 

(y)  assign, with the consent of the Borrower and the Facility Agent (in each case which consent shall not be unreasonably withheld or delayed and in the case of the Borrower, (i) shall not be required if any Default under Section 9.01 or 9.05 or any Event of Default is then in existence and (ii) shall be deemed to have been granted within 15 Business Days from the day it has been sought unless expressly refused within that period), all, or if less than all, a portion equal to at least $20,000,000 in the aggregate for the assigning Lender or assigning Lenders, of such outstanding principal amount of Loans hereunder to one or more Eligible Transferees (treating any Related Fund as a single Eligible Transferee), each of which assignees shall become a party to this Agreement as a Lender by execution of an Assignment and Assumption Agreement; provided that if all of such assigning Lender’s rights are less than $20,000,000 in principal amount and any Affiliates of such assigning Lender or any Related Fund hold any rights under this Agreement, then such assigning Lender, Affiliate and Related Fund must assign or transfer all of their rights and obligations (or if less than all, a portion equal to at least $20,000,000 in principal amount in the aggregate for such assigning Lender, Affiliate and Related Fund) to such Eligible Transferees;

 

provided that (i) at such time Schedule I hereto shall be deemed modified to reflect the outstanding Loans of such new Lender and of the existing Lenders, (ii) new Notes will be issued, at the Borrower’s expense, to such new Lender and to the assigning Lender upon the request of such new Lender or assigning Lender, such new Notes to be in conformity with the requirements

 

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