UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2021

Commission File Number: 333-229312

 

 

ATLAS CORP.

(Translation of registrant’s name into English)

 

 

23 Berkeley Square

London, United Kingdom

W1J 6HE

(Address of principal executive office)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:   ☒   Form 20-F   ☐  Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes   ☐            No   ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes   ☐            No   ☒

 

 

 


ATLAS CORP.

FORM 6-K

This report on Form 6-K of Atlas Corp., or this Report, is hereby incorporated by reference into: the Registration Statement of Atlas Corp. filed with the Securities and Exchange Commission, (the “SEC”), on May 30, 2008 on Form F-3D (Registration No. 333-151329), as amended on February 28, 2020, the Registration Statement of Atlas Corp. filed with the SEC on March 31, 2011 on Form S-8 (Registration No. 333-173207), as amended on February 28, 2020, the Registration Statement of Atlas Corp. filed with the SEC on June 20, 2013 on Form S-8 (Registration No. 333-189493), as amended on February 28, 2020, the Registration Statement of Atlas Corp. filed with the SEC on April 24, 2012 on Form F-3 (Registration No. 333-180895), as amended on March 22, 2013 and February 28, 2020, the Registration Statement of Atlas Corp. filed with the SEC on April 29, 2014 on Form F-3 (Registration No. 333-195571), as amended on March 6, 2017, April 19, 2017 and February 28, 2020, the Registration Statement of Atlas Corp. filed with the SEC on November 28, 2014 on Form F-3 (Registration No. 333-200639), as amended on March 6, 2017, April 19, 2017 and February 28, 2020, the Registration Statement of Atlas Corp. filed with the SEC on November 28, 2014 on Form S-8 (Registration No. 333-200640), as amended on February 28, 2020, the Registration Statement of Atlas Corp. filed with the SEC on March 12, 2015 on Form F-3D (Registration No. 333-202698), as amended on February 28, 2020, the Registration Statement of Atlas Corp. filed with the SEC on June 24, 2016 on Form S-8 (Registration No. 333-212230), as amended on February 28, 2020, the Registration Statement of Atlas Corp. filed with the SEC on August 25, 2017 on Form F-3 (Registration No. 333-220176), as amended on February 28, 2020, the Registration Statement of Atlas Corp. filed with the SEC on December 21, 2017 on Form S-8 (Registration No. 333-222216), as amended on February 28, 2020, the Registration Statement of Atlas Corp. filed with the SEC on April 13, 2018 on Form F-3D (Registration No. 333-224291), as amended on February 28, 2020, the Registration Statement of Atlas Corp. filed with the SEC on April 13, 2018 on Form F-3 (Registration No. 333-224288), as amended on May 3, 2018, May 7, 2018 and February 28, 2020, the Registration Statement of Atlas Corp. filed with the SEC on September 28, 2018 on Form F-3 (Registration No. 333-227597), as amended on February 28, 2020, the Registration Statement of Atlas Corp. filed with the SEC on January 18, 2019 on Form F-3 (Registration No. 333-229312), as amended on February 28, 2020, the Registration Statement of Atlas Corp. filed with the SEC on March 27, 2019 on Form F-3 (Registration No. 333-230524), as amended on February 28, 2020, the Registration Statement of Atlas Corp. filed with the SEC on May 11, 2020 on Form F-3 (Registration No. 333-238178), as supplemented on December 7, 2020, the Registration Statement of Atlas Corp. filed with the SEC on June 30, 2020 on Form S-8 (Registration No. 333-239578) and the Registration Statement of Atlas Corp filed with SEC on March 19, 2021 on Form F-3 (Registration No. 333-254536).

Information Contained in this Form 6-K Report

Amendment & Extension

On May 19, 2021, Seaspan Holdco III Ltd. (the “Borrower”), a wholly owned subsidiary of Seaspan Corporation (the “Parent Guarantor”), entered into (i) a First Amended and Restated Credit Agreement, amending and restating that certain Credit Agreement dated as of May 15, 2019 (the “1st Credit Agreement”), (ii) a First Amended and Restated Credit Agreement, amending and restating that certain Credit Agreement dated as of December 30, 2019 (the “2nd Credit Agreement”), and (iii) a First Amended and Restated Credit Agreement, amending and restating that certain Credit Agreement dated as of October 14, 2020 (the “3rd Credit Agreement” and together with the 1st Credit Agreement and the 2nd Credit Agreement, the “Credit Agreements”), each among (inter alios) the Borrower, as borrower, the Parent Guarantor, as guarantor, the several lenders from time to time party thereto (“Lenders”), Citibank, N.A., as administrative agent, and Société Générale, Hong Kong Branch, as lead sustainability coordinator. The Borrower also entered into a First Amended and Restated Intercreditor and Proceeds Agreement, amending and restating that certain Intercreditor and Proceeds Agreement dated as of May 15, 2019, among the Borrower, the Parent Guarantor, certain subsidiaries of the Borrower from time to time party thereto, as subsidiary guarantors (the “Vessel Owners”), the other secured parties from time to time party thereto, UMB Bank, National Association, as security trustee, and Citibank, N.A., as administrative agent (the “Intercreditor Agreement” and together with the Credit Agreements, the “Program Agreements”). Capitalized terms used, but not otherwise defined in this section of this Report on Form 6-K, shall have the meanings ascribed to such terms in the Program Agreements.


The Credit Agreements, as amended and restated, provide for secured credit facilities (the “Facilities”) of up to US$2.0 billion comprised of (i) a revolving loan and revolving letter of credit facility in an aggregate principal amount of US$400 million (“Revolving Loan Commitments”) and (ii) three term loan facilities in an aggregate principal amount of US$1.6 billion (“Term Loan Commitments”), as may be increased from time to time, subject to additional commitments, and required approvals and limitations set forth in the Program Agreements.

By the amendments and restatements, the Program Agreements were amended to, among other things, (i) increase the maximum aggregate amount of secured obligations under the Credit Agreements and any additional secured obligations permissible under the Intercreditor Agreement (“Secured Obligations”) from $2.0 billion to $2.5 billion, (ii) increase the aggregate Revolving Loan Commitments by $100 million (from $300 million to $400 million) and the aggregate Term Loan Commitments by $80 million (from $1.52 billion to $1.6 billion), (iii) extend the maturity of the Facilities under the 1st Credit Agreement to May 19, 2026 and the Facility under the 2nd Credit Agreement to May 19, 2027, (iv) reduce the average interest rate margin under the Facilities by approximately 20%, and (v) incorporate sustainability linked performance metrics into the 1st Credit Agreement and the 2nd Credit Agreement, on substantially the same terms as the 3rd Credit Agreement.

The Borrower’s obligations under the Credit Agreements are guaranteed by the Parent Guarantor and the Vessel Owners. The Borrower’s, Parent Guarantor’s and Vessel Owners’ obligations under the Program Agreements are secured by, among other things, a portfolio of Collateral Vessels, the charters in respect of the Collateral Vessels, the equity interests of the Vessel Owners and the Borrower and other assets of the Borrower and the Vessel Owners. The portfolio of Collateral Vessels currently comprises 48 containership vessels, ranging in size from 2,500 to 14,000 TEU, ranging in age from approximately 4 to 16 years, and with remaining charter terms up to approximately 9 years. The Credit Agreements permit the substitution of a Collateral Vessel with one or more vessels, including upon the sale or disposition of a Collateral Vessel, so the Collateral Vessels securing the Facilities may change from time to time.

The amended and restated 1st Credit Agreement, 2nd Credit Agreement and 3rd Credit Agreement require payment of interest on the outstanding Loans at a rate per annum equal to the LIBO Rate plus 1.80% per annum, 1.90% per annum and 2.25% per annum, respectively, subject in each case to adjustment based on the Borrower’s achievements relative to two sustainability-linked key performance indicators (KPIs). The first KPI aims at measuring the alignment of the carbon intensity of the Collateral Vessels with the International Maritime Organization (IMO) 2050 decarbonization trajectory. The second KPI aims at fostering cooperation with charterers in order to advance the decarbonization agenda, by seeking to include sustainability-linked provisions in future charter contracts.

The 1st Credit Agreement, 2nd Credit Agreement, 3rd Credit Agreement and the Intercreditor Agreement are filed as Exhibit 4.1, Exhibit 4.2, Exhibit 4.3 and Exhibit 4.4, respectively, to this Report on Form 6-K and are incorporated herein by reference. The description of the Program Agreements in this Report on Form 6-K is a summary and is qualified in its entirety by the terms of these agreements, as applicable.

Private Placement

Under the Intercreditor Agreement, the Borrower may incur additional secured debt in connection with the issuance of private placement notes or entering into other secured loan facilities, subject to certain conditions, including without limitation, that the total amount of the Secured Obligations does not exceed US$2.5 billion. On May 21, 2021, the Borrower and the Parent Guarantor entered into a note purchase agreement (the “Note Purchase Agreement”) with a group of institutional investors (the “Purchasers”), Citibank N.A. as Note Administrative Agent, Registrar and Paying Agent, and Société Générale, Hong Kong Branch, as lead sustainability coordinator pursuant to which the Borrower will issue $500 million of notes (the “Notes”) to the Purchasers. On May 21, 2021, the Borrower issued $450 million of such notes, comprised of $150 million of 3.91% Series A Senior Secured Notes due June 5, 2031, $170 million of 4.06% Series C Senior Secured Notes due June 5, 2033 and $130 million of 4.26% Series D Senior Secured Notes due June 5, 2036. The remaining $50 million of notes are expected to be issued in August 2021.

The Note Purchase Agreement contains representations, warranties and covenants which are substantially similar to those contained in the Credit Agreements. The Note Purchase Agreement incorporates sustainability linked performance metrics which are substantially similar to those contained in the Credit Agreements. The interest rates in respect of the Notes are subject to adjustment based on the Borrower’s achievements relative to the same two sustainability-linked KPIs as under the Credit Agreements.


The Notes may be optionally prepaid, in whole or in part, at any time, subject to payment by the Borrower of a “make-whole amount”. The Notes may also be prepaid by the Borrower in connection with certain changes in tax laws and must be prepaid by the Borrower if certain sanctions events occur. In the event of a change of control of the Borrower, the Borrower must offer to prepay all of the Notes at a price equal to 100% of the principal amount prepaid, together with accrued and unpaid interest.

Pursuant to the Intercreditor Agreement, the obligations in respect of the Notes have been designated as Secured Obligations and are secured on a pari passu basis with the obligations under the Credit Agreements.

The Note Purchase Agreement is filed as Exhibit 4.5 to this Report on Form 6-K and is incorporated herein by reference. The description of the Note Purchase Agreement is a summary and is qualified in its entirety by the terms of the Note Purchase Agreement.

The proceeds of the Facilities and the Notes are intended to be used (i) to finance the acquisition of Collateral Vessels and refinance existing indebtedness in relation to the Collateral Vessels and (ii) for general corporate purposes of the Borrower and the Parent Guarantor.

The Company issued a press release announcing the private placement of Notes and the amendments and restatements of the Program Agreements on May 24, 2021, a copy of which is attached to this Report on Form 6-K as Exhibit 99.1.

Cautionary Note Regarding Forward-Looking Statements

Any statements contained in this Report on Form 6-K that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “plans to,” “estimates,” “projects,” or similar expressions. Such statements may include, but are not limited to, statements about the Program Agreements and the Note Purchase Agreement, and other statements that are not historical facts. Such statements are based upon the beliefs and expectations of the Company’s management as of this date only and are subject to certain risks and uncertainties that could cause actual results to differ materially, including, without limitation, those items identified as “risk factors” in the Company’s most recently filed Annual Report on Form 20-F. Therefore, investors are cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable law.

Exhibits

The following exhibits are filed as part of this Report:

 

Exhibit 4.1    First Amended and Restated Credit Agreement, dated as of May 19, 2021, amending and restating that certain Credit Agreement dated as of May  15, 2019, among (inter alios) Seaspan Holdco III Ltd., as borrower, Seaspan Corporation, as guarantor, the several lenders from time to time party thereto, Citibank, N.A., as administrative agent, and Société Générale, Hong Kong Branch, as lead sustainability coordinator.
Exhibit 4.2    First Amended and Restated Credit Agreement, dated as of May 19, 2021, amending and restating that certain Credit Agreement dated as of December  30, 2019, among (inter alios) Seaspan Holdco III Ltd., as borrower, Seaspan Corporation, as guarantor, the several lenders from time to time party thereto, Citibank, N.A., as administrative agent, and Société Générale, Hong Kong Branch, as lead sustainability coordinator.


Exhibit 4.3    First Amended and Restated Credit Agreement, dated as of May 19, 2021, amending and restating that certain Credit Agreement dated as of October  14, 2020, among (inter alios) Seaspan Holdco III Ltd., as borrower, Seaspan Corporation, as guarantor, the several lenders from time to time party thereto, Citibank, N.A., as administrative agent, and Société Générale, Hong Kong Branch, as lead sustainability coordinator.
Exhibit 4.4    First Amended and Restated Intercreditor and Proceeds Agreement, dated as of May 19, 2021, amending and restating that certain Intercreditor and Proceeds Agreement dated as of May  15, 2019, among Seaspan Holdco III Ltd., Seaspan Corporation, certain subsidiaries of Seaspan Holdco III Ltd. from time to time party thereto, as subsidiary guarantors, the other secured parties from time to time party thereto, UMB Bank, National Association, as security trustee, and Citibank, N.A., as administrative agent.
Exhibit 4.5    Note Purchase Agreement, dated as of May  21, 2021, among Seaspan Holdco III Ltd., Seaspan Corporation, a group of institutional investors, Citibank N.A. as Note Administrative Agent, Registrar and Paying Agent, and Société Générale, Hong Kong Branch, as lead sustainability coordinator.
Exhibit 99.1    Press Release issued by Atlas Corp. on May 24, 2021.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

ATLAS CORP.
By:  

/s/ Graham Talbot

  Name: Graham Talbot
  Title: Chief Financial Officer

Date: May 27, 2021

Exhibit 4.1

 

 

FIRST AMENDED AND RESTATED

CREDIT AGREEMENT

dated as of

19 May, 2021

between

SEASPAN HOLDCO III LTD.,

as Borrower,

SEASPAN CORPORATION,

as Guarantor,

CITIBANK, N.A.,

as Administrative Agent

CITIBANK N.A.,

as Structuring Agent

CITIBANK, N.A.,

as global coordinator, left lead mandated lead arranger and joint-bookrunner

BANK OF MONTREAL,

SOCIÉTÉ GÉNÉRALE, HONG KONG BRANCH,

NATIONAL AUSTRALIA BANK LIMITED,

BANK OF AMERICA, N.A. and

WELLS FARGO BANK, N.A.,

as mandated lead arrangers and joint-bookrunners

SOCIÉTÉ GÉNÉRALE, HONG KONG BRANCH,

as Lead Sustainability Coordinator

CITIBANK, N.A.,

BANK OF MONTREAL and

WELLS FARGO BANK, N.A.,

as Co-Sustainability Coordinators

and

THE SEVERAL LENDERS FROM TIME TO

TIME PARTY HERETO


TABLE OF CONTENTS

 

         Page  

ARTICLE I

  

DEFINITIONS

  

SECTION 1.01

  Defined Terms      2  

SECTION 1.02

  Terms Generally      34  

SECTION 1.03

  Accounting Terms; Changes in GAAP      34  

SECTION 1.04

  Rates      35  

SECTION 1.05

  Letter of Credit Amounts      35  

ARTICLE II

  

COMMITMENTS

  

SECTION 2.01

  Term Loan Commitments      35  

SECTION 2.02

  Revolving Loan Commitments.      36  

SECTION 2.03

  Repayment Schedules.      37  

SECTION 2.04

  Repayment of the Loans      38  

SECTION 2.05

  Optional Prepayments      38  

SECTION 2.06

  Mandatory Prepayments.      39  

SECTION 2.07

  Letters of Credit      40  

SECTION 2.08

  Interest      46  

SECTION 2.09

  Fees      47  

SECTION 2.10

  Evidence of Debt      48  

SECTION 2.11

  Payments Generally; Several Obligations of Lenders      48  

SECTION 2.12

  Sharing of Payments      49  

SECTION 2.13

  Compensation for Losses      50  

SECTION 2.14

  Increased Costs      50  

SECTION 2.15

  Taxes      51  

SECTION 2.16

  Benchmark Replacement Setting      52  

SECTION 2.17

  [Reserved]      59  

SECTION 2.18

  Mitigation Obligations; Replacement of Lenders      59  

SECTION 2.19

  Cash Collateral      60  

SECTION 2.20

  Defaulting Lenders      61  

SECTION 2.21

  Increases in Commitments      63  

ARTICLE III

  

REPRESENTATIONS AND WARRANTIES

  

SECTION 3.01

  Status      64  

SECTION 3.02

  Powers and authority      64  

SECTION 3.03

  Legal validity      64  

SECTION 3.04

  Non-conflict      65  

SECTION 3.05

  No default      65  

SECTION 3.06

  Authorizations      65  

SECTION 3.07

  Financial statements      65  

 

i


SECTION 3.08

  No misleading information      65  

SECTION 3.09

  No Material Adverse Effect      65  

SECTION 3.10

  Litigation      66  

SECTION 3.11

  Pari passu ranking      66  

SECTION 3.12

  Taxes      66  

SECTION 3.13

  Taxes on payments      66  

SECTION 3.14

  Stamp duties      66  

SECTION 3.15

  Environment      66  

SECTION 3.16

  Security Interests      66  

SECTION 3.17

  Security Assets      66  

SECTION 3.18

  Collateral Vessel      67  

SECTION 3.19

  ISM Code and ISPS Code compliance      67  

SECTION 3.20

  No amendments to Related Contracts      67  

SECTION 3.21

  Money Laundering      67  

SECTION 3.22

  Anti-Corruption and Sanctions      67  

SECTION 3.23

  Compliance with laws      68  

SECTION 3.24

  Investments Company Act      68  

SECTION 3.25

  Regulation U      68  

SECTION 3.26

  Insolvency      68  

SECTION 3.27

  Immunity      68  

SECTION 3.28

  [Reserved]      68  

SECTION 3.29

  Jurisdiction and governing law      68  

SECTION 3.30

  Accounts      68  

SECTION 3.31

  Charters      69  

SECTION 3.32

  Ownership      69  

SECTION 3.33

  Use of proceeds      69  

SECTION 3.34

  Special purpose representations      69  

SECTION 3.35

  Separateness      69  

SECTION 3.36

  Beneficial Ownership Certification      71  

ARTICLE IV

  

CONDITIONS

  

SECTION 4.01

  Initial Borrowing Date      71  

SECTION 4.02

  Conditions to Borrowings      73  

SECTION 4.03

  Conditions to L/C Credit Extension      77  

SECTION 4.04

  Conditions to Restatement      78  

SECTION 4.05

  Post-Restatement Items      80  

ARTICLE V

  

AFFIRMATIVE COVENANTS

  

SECTION 5.01

  Financial Statements      80  

SECTION 5.02

  Compliance Certificates      81  

SECTION 5.03

  Valuation      81  

SECTION 5.04

  Access to Books and Records      82  

SECTION 5.05

  Information—miscellaneous      82  

SECTION 5.06

  Notification of Default      82  

SECTION 5.07

  Know your customer checks      83  

 

ii


SECTION 5.08

  Use of websites      83  

SECTION 5.09

  Authorizations      84  

SECTION 5.10

  Compliance with laws      84  

SECTION 5.11

  Pari passu ranking      84  

SECTION 5.12

  Place of business      84  

SECTION 5.13

  Security      84  

SECTION 5.14

  Separateness Covenants      85  

SECTION 5.15

  Registration of the Collateral Vessels      86  

SECTION 5.16

  Classification and repair      86  

SECTION 5.17

  Lawful and safe operation      87  

SECTION 5.18

  Repair of the Collateral Vessels      88  

SECTION 5.19

  Arrests and liabilities      88  

SECTION 5.20

  Environment      89  

SECTION 5.21

  Information regarding the Collateral Vessels      89  

SECTION 5.22

  Provision of further information      90  

SECTION 5.23

  Management      90  

SECTION 5.24

  Charters      90  

SECTION 5.25

  Termination of Eligible Charters      91  

SECTION 5.26

  Scope of Obligatory Insurances      92  

SECTION 5.27

  Obligatory Insurances      93  

SECTION 5.28

  Power of Administrative Agent to insure      94  

SECTION 5.29

  ISM Code      94  

SECTION 5.30

  ISPS Code      95  

SECTION 5.31

  Dry Docking      95  

SECTION 5.32

  Rating      96  

SECTION 5.33

  Taxation      96  

SECTION 5.34

  Decarbonization Certificates      96  

ARTICLE VI

  

NEGATIVE COVENANTS

  

SECTION 6.01

  Security Interests      98  

SECTION 6.02

  Mergers      98  

SECTION 6.03

  Special Purpose Covenants      98  

SECTION 6.04

  Payment of dividends      99  

SECTION 6.05

  Vessel Substitutions      99  

SECTION 6.06

  Vessel Dispositions and Removals      99  

SECTION 6.07

  Year end      100  

SECTION 6.08

  Related Contracts      100  

SECTION 6.09

  Financial Covenants      100  

SECTION 6.10

  Creation of Additional Security      101  

SECTION 6.11

  No amendment to Related Contracts      101  

SECTION 6.12

  Anti-corruption law      101  

SECTION 6.13

  Sanctions      101  

SECTION 6.14

  Additional Secured Debt      102  

 

iii


ARTICLE VII

  

EVENTS OF DEFAULT

  

SECTION 7.01

  Events of Default      102  

ARTICLE VIII

  

AGENCY

  

SECTION 8.01

  Appointment and Authority      106  

SECTION 8.02

  Rights as a Lender      106  

SECTION 8.03

  Exculpatory Provisions      106  

SECTION 8.04

  Reliance by Administrative Agent      107  

SECTION 8.05

  Delegation of Duties      108  

SECTION 8.06

  Resignation of Administrative Agent      108  

SECTION 8.07

  Non-Reliance on Agents and Other Lenders      109  

SECTION 8.08

  No Other Duties      109  

SECTION 8.09

  Administrative Agent May File Proofs of Claim      109  

SECTION 8.10

  Intercreditor Agreement      109  

ARTICLE IX

  

MISCELLANEOUS

  

SECTION 9.01

  Notices      110  

SECTION 9.02

  Waivers; Amendments      111  

SECTION 9.03

  Expenses; Indemnity; Damage Waiver      114  

SECTION 9.04

  Successors and Assigns      115  

SECTION 9.05

  Survival      118  

SECTION 9.06

  Counterparts; Integration; Effectiveness; Electronic Execution      118  

SECTION 9.07

  Severability      119  

SECTION 9.08

  Right of Setoff      119  

SECTION 9.09

  Governing Law; Jurisdiction; Etc.      119  

SECTION 9.10

  WAIVER OF JURY TRIAL      120  

SECTION 9.11

  Headings      120  

SECTION 9.12

  Treatment of Certain Information; Confidentiality      120  

SECTION 9.13

  PATRIOT Act      121  

SECTION 9.14

  Interest Rate Limitation      121  

SECTION 9.15

  Payments Set Aside      122  

SECTION 9.16

  No Advisory or Fiduciary Responsibility      122  

SECTION 9.17

  Acknowledgement and Consent to Bail-In of EEA Financial Institutions      123  

SECTION 9.18

  QFC Provisions      123  

SECTION 9.19

  Amendment and Restatement      125  

 

iv


SCHEDULES

 

SCHEDULE 1.01

  —     Estimated add back related to vessel depreciation

SCHEDULE 2.01

  —     Commitments and Lenders

SCHEDULE 2.02

  —     Concentration Limit Requirements

SCHEDULE 2.03

  —     Repayment Schedule as of the Restatement Date

EXHIBITS

   

EXHIBIT A

    Assignment and Assumption

EXHIBIT B

  —     Compliance Certificate

EXHIBIT C

  —     Identified Vessels

EXHIBIT D

  —     Form of Decarbonization Certificate

EXHIBIT E

  —     Form of Charterer’s Undertaking

 

 

v


FIRST AMENDED AND RESTATED CREDIT AGREEMENT dated as of 19 May, 2021 (this “Agreement”), between SEASPAN HOLDCO III LTD., a corporation organized and existing under the laws of the Republic of the Marshall Islands, with limited liability, with its registered offices at Trust Company Complex, Ajeltake Road, Ajeltake Island, P.O. Box 1405, Majuro, Marshall Islands MH96960 and registered as a non-Hong Kong company under Part 16 of the Companies Ordinance (Cap. 622 of the laws of Hong Kong) (the “Borrower”), SEASPAN CORPORATION, a corporation organized and existing under the laws of the Republic of the Marshall Islands with limited liability, as a Guarantor, the several banks and other financial institutions or entities from time to time party hereto as Lenders, CITIBANK, N.A. (“Citibank”), acting through its Agency and Trust Division, not in its individual capacity but solely as administrative agent (in such capacity, together with its successors and permitted assigns, the “Administrative Agent”), CITIBANK,N.A., as structuring agent (in such capacity, the “Structuring Agent”), CITIBANK, N.A., as global coordinator, and left lead mandated lead arranger and joint-bookrunner (in such capacity, the “Global Coordinator”), BANK OF MONTREAL, SOCIÉTÉ GÉNÉRALE, HONG KONG BRANCH, a public limited company incorporated in France, acting through its Hong Kong Branch (“Société Générale, Hong Kong Branch”), NATIONAL AUSTRALIA BANK LIMITED, BANK OF AMERICA, N.A. and WELLS FARGO BANK, N.A., as mandated lead arrangers and joint-bookrunners (in such capacity, the “Mandated Lead Arrangers” and each a “Mandated Lead Arranger”), SOCIÉTÉ GÉNÉRALE, HONG KONG BRANCH, a public limited company incorporated in France, acting through its Hong Kong Branch (“Société Générale, Hong Kong Branch”) as lead sustainability coordinator (in such capacity, the “Lead Sustainability Coordinator) and CITIBANK, N.A., BANK OF MONTREAL and WELLS FARGO BANK, N.A., as co-sustainability coordinators (in such capacity, the “Co-Sustainability Coordinators” and each a “Co-Sustainability Coordinator”).

W I T N E S S E T H:

WHEREAS the Borrower has requested from the Lenders a loan facility comprised of (a) a revolving loan and revolving letter of credit facility, and (b) a term loan facility, each as set forth herein (and as may be increased from time to time in accordance with the terms of this Agreement and the other Secured Debt Documents).

WHEREAS the proceeds of the Loans and any Additional Secured Debt will be used (a) to finance the acquisition of Collateral Vessels and refinance existing indebtedness in relation to the Collateral Vessels and (b) for general corporate purposes of the Borrower and the Guarantor.

WHEREAS it is the intent of the parties hereto that this Agreement not constitute a novation of the obligations and liabilities of the parties under the Initial Credit Agreement, but that this Agreement amend and restate in its entirety the Initial Credit Agreement and re-evidence the obligations and liabilities of the parties thereunder.

WHEREAS the parties are willing to amend and restate the Initial Credit Agreement on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained herein, the parties hereto hereby agree as follows:

 

1


ARTICLE I

DEFINITIONS

SECTION 1.01 Defined Terms. Capitalized terms used in this Agreement which are not otherwise defined have the meanings assigned to them in the Intercreditor Agreement. As used in this Agreement, the following terms have the meanings specified below:

Account Bank” means, in relation to the HK Collection Account, Citibank, N.A., Hong Kong Branch, in relation to any Vessel Owner Account, such bank as may be approved by the Administrative Agent, and, in relation to all other Accounts, Bank of Montreal.

Account Charge” means, in relation to each of the Charged Accounts, the first priority fixed charge or pledge over all such accounts given or to be given by the relevant account holder thereof in favor of and in form and substance satisfactory to the Security Trustee.

Additional Secured Debt” has the meaning specified in the Intercreditor Agreement.

Additional Security” means any Security Interest created pursuant to Section 6.10.

Additional Vessel” means any vessel (other than Identified Vessels) that meet the Eligibility Criteria.

Administrative Agent” means Citibank, N.A., acting through its Agency and Trust Division, not in its capacity but solely in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth in Section 9.01, or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.

Administrative Parties” means, collectively, the Global Coordinator, the Mandated Lead Arrangers, the Lead Sustainability Coordinator, the Co-Sustainability Coordinators, the Administrative Agent, the Structuring Agent and the Security Trustee.

Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

Advance Rate” shall mean, for any Borrowing and the Collateral Vessel related thereto, the amount calculated as a percentage of the Asset Value of such Collateral Vessel as follows: (a) in respect of a Collateral Vessel which is subject to an Eligible Charter, (i) where such Collateral Vessel is less than 5 years old, 75%, (ii) where such Collateral Vessel is equal to or more than 5 years old but less than 10 years old, 70%, and (iii) where such Collateral Vessel is equal to or greater than 10 years old, 60%; and (b) in respect of a Collateral Vessel which is not subject to an Eligible Charter, (i) where such Collateral Vessel is less than 10 years old, 60%, and (ii) where such Collateral Vessel is equal to or greater than 10 years old, 50%.

Affected Financial Institution” means, (a) any EEA Financial Institution or (b) any UK Financial Institution.

 

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Affiliate” means, with respect to a specified Person, another Person that directly or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

Agents” means, collectively, the Administrative Agent, the Structuring Agent, the Global Coordinator, the Mandated Lead Arrangers, the Lead Sustainability Coordinator and the Co-Sustainability Coordinators.

Agent Parties” has the meaning specified in Section 9.01(d)(ii).

Agreement” has the meaning specified in the introductory paragraph hereof.

Annex VI” means Annex VI of the Protocol of 1997 (as subsequently amended from time to time) to amend the International Convention for the Prevention of Pollution from Ships 1973 (Marpol), as modified by the Protocol of 1978 relating thereto.

Anti-Corruption Laws” means all laws, rules, and regulations, as amended, concerning or relating to bribery or corruption, including, without limitation, the U.S. Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 (as amended), and all other applicable anti-bribery and corruption laws, regulations or ordinances in any jurisdiction where the Obligors are located or doing business.

Anti-Money Laundering Laws” has the meaning specfied in Section 3.21.

Applicable Charter Margin Adjustment” means for the relevant Margin Period:

 

  (a)

less 0.0125% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Margin Period is equal to or greater than 25% and less than 30%;

 

  (b)

less 0.015% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Margin Period is equal to or greater than 30% and less than 35%;

 

  (c)

less 0.0175% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Margin Period is equal to or greater than 35% and less than 40%;

 

  (d)

less 0.020% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Margin Period is equal to or greater than 40% and less than 45%;

 

  (e)

less 0.0225% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Margin Period is equal to or greater than 45% and less than 50%; and

 

  (f)

less 0.025% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Margin Period is equal to or greater than 50%.

 

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Applicable Law” means, as to any Person, all applicable Laws binding upon such Person or to which such a Person is subject.

Applicable Percentage” means, with respect to any Lender, the percentage of the total Commitments represented by such Lender’s Commitment. If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments. In respect of any Single Lender Letter of Credit, the Applicable Percentage of the applicable Single Lender Issuing Bank shall be one hundred per cent. (100%) and the Applicable Percentage of all other Lenders shall be zero.

Applicable Performance Margin Adjustment” means for the relevant Margin Period:

 

  (a)

plus 0.0125% per annum where the Average Collateral Vessel Delta determined on the Delta Test Date immediately prior to the relevant Margin Period is greater than +2.5%; and

 

  (b)

less 0.0125% per annum where the Average Collateral Vessel Delta determined on the Delta Test Date immediately prior to the relevant Margin Period is less than -2.5%.

Approved Flag State” means the Republic of the Marshall Islands, the Commonwealth of the Bahamas, the Republic of Liberia, the Republic of Panama, the Commonwealth of Bermuda, the Cayman Islands, the Isle of Man, Malta, Hong Kong, the United Kingdom, the Commonwealth of Australia, Barbados, Belgium, the Republic of Cyprus, Danish International Ship Register (DIS), Germany, Gibraltar, Greece, Norwegian International Ship Register (NIS), Norway, The Netherlands, Singapore, United States of America and any other flag state approved by the Administrative Agent in writing; provided that the total number of Collateral Vessels that may be registered under the United States of America flag at any one time shall be limited to two and such Collateral Vessels shall not be qualified Jones Act vessels. The Administrative Agent shall, in giving any such approval, act on the instructions of all Lenders, unless no Lender has objected to any such other flag state within 15 days of a request for approval, in which case, the Administrative Agent shall act on the instructions of the Required Lenders.

Approved Valuers” means H. Clarkson & Co. Ltd. and Howe Robinson Partners (or, in either case, such other appraiser as the Administrative Agent shall agree).

Asset Value” means, in respect of any Collateral Vessel or Substitute Vessel, the greater of the DCF Value and the Market Value of such Collateral Vessel.

Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in substantially the form of Exhibit A or any other form approved by the Administrative Agent.

Availability Termination Date” means the Term Loan Availability Termination Date or the Maturity Date, as applicable.

Average Collateral Vessel Delta” means the weighted average Collateral Vessel Delta for all Collateral Vessels when calculated on each Delta Test Date, with the weighting of each Collateral Vessel Delta to be determined by the proportion the Asset Value of the relevant Collateral Vessel multiplied by the Advance Rate for such Collateral Vessel, bears to the Borrowing Base on 31 December of the year immediately prior to the relevant Delta Test Date, calculated by the Lead Sustainability Coordinator with reference to the Decarbonization Certificate and the Compliance Data.

 

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Average Efficiency Ratio” and/or “AER” means, in respect of a single Collateral Vessel, such Collateral Vessel’s average efficiency ratio expressed in unit grams of CO2 per tonne-mile i.e. gCO2/dwt-nm calculated by the Lead Sustainability Coordinator with reference to the Decarbonization Certificate and the Compliance Data, as per the below formula:

 

LOGO

where  LOGO  is the carbon emissions for voyage LOGO computed using the fuel consumption with reference to the Decarbonization Certificate and the Compliance Data and carbon factor of each type of fuel set out in MEPC 63/23 Annex 8 – 2012 Guidelines on the Method of Calculation of the Attained Energy Efficient Design Index (EEDI) for New Ships as updated from time to time, dwt is the design deadweight of the Collateral Vessel, and  LOGO  is the distance travelled on voyage  LOGO . The AER is computed for all voyages performed by the relevant Collateral Vessel over the applicable 12 calendar months.

Bail-In Action” means, the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.

Bail-In Legislation” means, (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

BB Event” means, as of any BB Test Date, a BB Ratio in excess of 1.0:1.0x.

BB Ratio” means, at any Test Date, the ratio of (a) the aggregate of (x) the outstanding Program Debt plus (y) the then mark-to-market value of any amounts payable to (but, for the avoidance of any doubt, ignoring amounts payable by) the Hedge Counterparties under any Hedging Agreements and the other Hedge Counterparties (as defined in the Intercreditor Agreement) under any other Hedging Agreements (as defined in the Intercreditor Agreement), to (b) the Borrowing Base.

BB Test Date” means (a) each Borrowing Date; (b) each Vessel Substitution Date; (c) each Vessel Disposition Date; and (d) each Determination Date.

Beneficial Ownership Certification” means a certification regarding beneficial ownership or control as required by the Beneficial Ownership Regulation.

Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

Bill of Sale” means, in respect of a Collateral Vessel, the relevant bill of sale (or other instrument of transfer) executed by the relevant seller in favor of the relevant Vessel Owner pursuant to the relevant Purchase Agreement.

 

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Borrower” means Seaspan Holdco III Ltd., a company incorporated in the Marshall Islands or such other jurisdiction approved by the Administrative Agent with the consent of all Lenders (in their reasonable discretion).

Borrower Materials” has the meaning specified in Section 9.01(e).

Borrowing” means a borrowing by the Borrower of Loans.

Borrowing Base” means, at any Test Date, the aggregate of (a) the latest Asset Value of each Collateral Vessel (other than Excluded Collateral Vessels) multiplied by the Advance Rate applicable to each such Collateral Vessel (provided that, where a Concentration Limit Event has occurred and is continuing, there shall be excluded from the Borrowing Base an amount equal to the Asset Values of Collateral Vessels solely to the extent such Asset Value exceeds the specified percentage thresholds set forth on Schedule 2.02); (b) any Additional Security multiplied by such percentage as shall be agreed between the Borrower and the Administrative Agent acting in their reasonable judgment; and (c) the then current balance of any amounts on deposit in the Collateral Account.

Borrowing Date” means any Business Day specified in a notice pursuant to Section 2.01 or 2.02 as a date on which any Borrower requests the Lenders to make Loans hereunder.

Borrowing Request” means (a) a request for a Term Loan Borrowing, or (b) a request for a Revolving Loan Borrowing, which in each case shall be in such form as the Administrative Agent may approve.

Business Day” means any day that is not a Saturday, Sunday or other day that is a legal holiday under the laws of the State of New York, the Province of British Columbia, the Province of Ontario or Hong Kong, or is a day on which banking institutions in such jurisdictions are authorized or required by Law to close; provided that (a) when used in connection with a LIBO Rate Loan, the term “Business Day” means any such day that is also a day on which dealings in Dollar deposits are conducted by and between banks in the London interbank market and (b) when used in connection with any Borrowing Date, the term “Business Day” shall also exclude any day which is a legal holiday in Paris, Montreal and Taipei.

Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of one or more of the Issuing Banks or Lenders, as collateral for L/C Obligations or obligations of Lenders to fund participations in respect of L/C Obligations, cash or deposit account balances or, if the Administrative Agent and each applicable Issuing Bank shall agree in its sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the Administrative Agent and each applicable Issuing Bank. “Cash Collateral” shall have a meaning analogous to the foregoing and shall include the proceeds of such cash collateral and other credit support.

Cash Sweep Event” means a BB Event or a DSCR Cash Sweep Event.

Change in Law” means 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

 

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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, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

Change of Control” means the acquisition, directly or indirectly, by any person or group of persons other than a UBO of beneficial ownership of more than 50% of the aggregate outstanding voting power of the equity interests of the Guarantor.

Charged Accounts” means each of: (a) the Collection Account; (b) the Collateral Account; (c) the HK Collection Account; and (d) any Vessel Owner Account, and each such account shall be held with the Account Bank in the name of (in the case of any Vessel Owner Account) the relevant Vessel Owner and (in all other cases) the Borrower.

Charter” means any charter or contract for the use, employment or operation of a vessel or the carriage of people and/or cargo or the provision of services by or from such vessel.

Charter Guarantees” means in relation to each of the Collateral Vessels, any guarantee provided or to be provided by a Charter Guarantor in relation to a Charterer’s obligations under a Charter and “Charter Guarantee” means any of them.

Charter Guarantor” means any guarantor of a Charterer’s obligations under a Charter.

Charter Termination Fee” means any amount due to the Borrower or Vessel Owner from a Charterer or Charter Guarantor as a result of or in connection with the termination of a Charter.

Charterer” means any charterer of a Collateral Vessel, and “Charterer” shall mean any of them.

Charterer’s Undertaking” means, in respect of any Collateral Vessel which is subject to a Charter which is a demise or bareboat charter, an undertaking from the Charterer in favor of the Security Trustee in substantially the form set out in Exhibit E (or in such other form as the Security Trustee and Borrower may agree).

Classification Society” means Lloyds Register of Shipping, DNV GL, or any other member of the International Association of Classification Societies.

Closing Date” means the date of the Initial Credit Agreement.

Code” means the Internal Revenue Code of 1986.

Collateral Vessel” means each or any, as the context may require, of the Identified Vessels and Additional Vessels which are from time to time the subject of a Borrowing or a Borrowing Request or which are otherwise mortgaged or over which security is granted to secure Program Debt, and any Substitute Vessel that has satisfied the requirements of Section 6.05, but excluding any Collateral Vessel which has been sold and which no longer constitutes part of the Security, in each case in accordance with this Agreement.

 

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Collateral Vessel Delta” means for each Collateral Vessel, the percentage difference between (i) that Collateral Vessel’s Average Efficiency Ratio for the relevant Delta Test Period, and (ii) the then current and applicable IMO Decarbonization Trajectory (for a vessel’s average efficiency ratio) expressed as a positive or negative percentage (+/-)% as calculated by the Lead Sustainability Coordinator with reference to the Decarbonization Certificate and the Compliance Data, on each Delta Test Date per the formula below:

 

LOGO

where LOGO is the required average efficiency ratio for the ship type and size class for the relevant calendar year period as determined by the related IMO Decarbonization Trajectory. For the sake of clarity, a positive Collateral Vessel Delta means that a Collateral Vessel is misaligned and above the then current and applicable IMO Decarbonization Trajectory (for a vessel’s average efficiency ratio). A zero or negative Collateral Vessel Delta means that a Collateral Vessel is aligned and on or below the then current and applicable IMO Decarbonization Trajectory (for a vessel’s average efficiency ratio).

Collection Account” means the account of the Borrower maintained with Bank of Montreal with account number 0004-4624-914.

Commitment Fee” means the fees payable by the Borrower pursuant to Sections 2.09(b) and (c).

Commitments” means, collectively, the Term Loan Commitments and the Revolving Loan Commitments.

Communications” has the meaning specified in Section 9.01(d)(ii).

Compliance Certificate” means the form of certificate attached at Exhibit B.

Compliance Data” means all information necessary for and/or reasonably requested by the Lead Sustainability Coordinator, in order for the Lead Sustainability Coordinator (i) to calculate the AER and/or the Collateral Vessel Delta, including, without limitation, all ship fuel oil consumption data required to be collected and reported in accordance with Regulation 22A of Annex VI and any Statement of Compliance provided by a Recognized Organization, in each case relating to any relevant Collateral Vessel for the relevant Delta Test Period, and (ii) to verify the existence and suitability of a Sustainability Linked Charter Mechanism in a Qualifying Charter Contract, including, without limitation, the relevant extracts (certified by a Responsible Officer of the Borrower) of the provisions of the corresponding Qualifying Charter Contracts, in each case relating to any relevant vessel owned by the Guarantor Group for the relevant Delta Test Period.

Concentration Limit Event” means the occurrence and continuance of any breach of the Concentration Limit Requirements.

Concentration Limit Requirements” has the meaning specified in Schedule 2.02.

Concentration Test Date” means each of the following dates: (a) each Borrowing Date; (b) each Vessel Substitution Date; (c) each Vessel Disposition Date; (d) any date on which a Vessel Owner proposes entering into a new Eligible Charter in respect of a Collateral Vessel; and (e) each other Test Date.

 

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Consolidated Tangible Net Worth” means, as of any date of determination, for the Guarantor on a consolidated basis, total shareholders’ equity as reported in the most recently delivered balance sheet of the Guarantor and its consolidated Subsidiaries adjusted by:

(a)    adding any subordinated debentures (being convertible debentures and other equity linked instruments which are subordinate to the rights of its unsecured creditors generally and which are akin to equity), mezzanine equity and redeemable shares;

(b)    adding the amount referred to in Schedule 1.01 for the date of such balance sheet (as the same may be adjusted from time to time to reflect the sale of any of the vessels referred to in Schedule 1.01 whether or not they are Collateral Vessels or Collateral Vessels at the date of their sale, following the date of this Agreement);

(c)    deducting any amount attributable to goodwill or any other intangible asset; and

(d)    reflecting any variation in the amount of the issued share capital of the Guarantor since the date of such balance sheet.

Contracted Net Cash Flow” means, in respect of any Collateral Vessel and Eligible Charter, the contracted cash flow payable to the applicable Vessel Owner under such Eligible Charter, reduced by US$6,800 per day (which amount shall be escalated on an annual basis at the LTM Rate); provided that such reduction shall not apply to the calculation of the Contracted Net Cash Flow for any Collateral Vessel which is subject to a bareboat or demise charter; and provided further that Contracted Net Cash Flow in respect of any Collateral Vessel and Eligible Charter and any extension period shall be deemed to be zero to the extent that, as of the relevant date, the applicable contracted cash flow payable during such extension period (or part thereof) is uncertain or is not capable of being conclusively calculated.

Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings analogous thereto.

Co-Sustainability Coordinators” means each of Citibank, N.A., Bank of Montreal and Wells Fargo Bank, N.A., in their respective capacities as co-sustainability coordinators.

Credit Extension” means (a) a Borrowing or (b) an L/C Credit Extension.

DCF Value” means the sum of (i) the Present Value of Contracted Net Cash Flow in respect of the relevant Collateral Vessel, plus (ii) the Terminal Value of such Collateral Vessel.

Debtor Relief Laws” means the Bankruptcy Code of the United States of America, 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.

 

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Debtor Relief Plan” means a plan of reorganization or plan of liquidation pursuant to any Debtor Relief Laws.

Decarbonization Certificate” means the form of certificate attached at Exhibit D.

Deed of Covenants” means, in respect of a Collateral Vessel, the deed of covenants entered into or to be entered into by the relevant Vessel Owner and the Security Trustee collateral to the Mortgage over that Collateral Vessel.

Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

Default Rate” means an interest rate (before as well as after judgment) equal to the applicable interest rate set forth in Section 2.08(a) plus 2.00% per annum.

Defaulting Lender” means, subject to Section 2.20(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, any Issuing Bank or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit) within two Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent or any Issuing Bank in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within two (2) Business Days after request by the Borrower or the Administrative Agent, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans and, if applicable, participations in then outstanding Letters of Credit under this Agreement, or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, or (iii) become the subject of a Bail-in Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from (A) the jurisdiction of courts within the United States, or (B) with respect to any Lender that is otherwise subject to the jurisdiction of courts outside the United States, the jurisdiction of such courts, or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.20(b)) upon delivery of written notice of such determination to the Borrower, each Issuing Bank and each Lender.

 

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Delta Test Date” means June 30, 2022 and thereafter each anniversary of such date in each subsequent calendar year provided that if any such date shall not be a Business Day, the relevant Delta Test Date shall be the immediately succeeding Business Day.

Delta Test Period” means the twelve (12) calendar month period commencing on January 1 ending on December 31 immediately prior to the relevant Delta Test Date.

Determination Date” means the last day of each of February, May, August and November in each year.

Dollar” and “$” mean lawful money of the United States.

DSCR Cash Sweep Event” means, as of any date of determination, the failure of the DSCR Ratio as of such date to be at least equal to 1.25:1.0x.

DSCR Ratio” means, with respect to the last two fiscal quarters for the Borrower, the ratio of: (a) EBITDA of the Borrower for such period, to (b) the aggregate amount of scheduled principal and interest payable (excluding any final payments due at maturity) in respect of Program Debt during the applicable period (whether or not actually paid during such period and disregarding any voluntary prepayments made at the Borrower’s election in accordance with Section 2.05(b)(ii)(y)), plus any Commitment Fees payable during such period, plus any amounts paid by the Borrower during such period under any Hedging Agreements.

Earnings” means, in respect of a Collateral Vessel, all present and future moneys and claims which are earned by or become payable to or for the account of the Borrower or Vessel Owner in connection with the operation or ownership of that Collateral Vessel and including but not limited to: (a) freights, passage and hire moneys (howsoever earned); (b) remuneration for salvage and towage services; (c) demurrage and detention moneys; (d) all moneys and claims in respect of the requisition for hire of that Collateral Vessel; (e) payments received in respect of any off-hire insurance; (f) payments received pursuant to any Charter Guarantee relating to that Collateral Vessel; and (g) Charter Termination Fees or other payments in respect of the termination of any Charter, including without limitation, pursuant to legal proceedings, arbitration or other settlement arrangements.

EBITDA” means the net income of the Guarantor (on a consolidated basis) or the Borrower, as applicable, for a Measurement Period as adjusted by:

 

  (a)

adding back taxation;

 

  (b)

adding back Interest Expenses;

 

  (c)

taking no account of any extraordinary item;

 

  (d)

excluding any amount attributable to minority interests;

 

  (e)

adding back depreciation and amortization, including amounts relating to operating leases but with the exception of amortization of dry-docking costs;

 

  (f)

adding back non-cash expenses and deducting non-cash gains, including mark to market on Hedging Agreements and any other financial instruments and stock based compensation;

 

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  (g)

adding bareboat charter fees and deducting bareboat related interest income from leasing;

 

  (h)

taking no account of any revaluation of an asset or any loss or gain over book value, whether or not arising on the disposal of an asset (otherwise than in the ordinary course of trading) by the Guarantor or the Borrower, as applicable, during that Measurement Period; and

 

  (i)

adding proportionate distributions from unconsolidated entities to the Guarantor or the Borrower, as applicable.

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

EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

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

EEOI” means the Energy Efficiency Operational Indicator, developed by the International Maritime Organization in order to allow shipowners to measure the fuel efficiency of a ship in operation.

Eligibility Criteria” means: (a) such vessel shall be a container vessel that satisfies the requirements in respect of a Collateral Vessel set out in this Agreement; (b) such vessel shall be owned by (and not leased or chartered to) a Vessel Owner on the Borrowing Date; (c) its inclusion as a Collateral Vessel shall not give rise to a Default, a Concentration Limit Event, a BB Event or a DSCR Cash Sweep Event; and (d) it and any contract of employment or charter for such vessel shall comply with all requirements set out in the Loan Documents as if it was a Collateral Vessel and its owner was a Vessel Owner.

Eligible Assignee” as the meaning given to it in Section 9.04(b).

Eligible Charter” shall mean any firm contract for the employment of a Collateral Vessel with a Person other than a member of the Guarantor Group which has a remaining fixed term of not less than 3 months (which shall include any extension options which (i) if at the option of the Charterer, have been exercised, (ii) if at the option of the Vessel Owner, have or have not yet been exercised and (iii) are automatically exercised (without any condition, requirement or other arrangement whereby such extension will not occur other than a determination from the Vessel Owner otherwise)), and shall include any charter providing the applicable Vessel Owner with a termination right.

Environmental Approvals” means any permit, license, approval, ruling, variance, exemption or other authorization required under applicable Environmental Laws.

 

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Environmental Laws” means any and all federal, state, local, and foreign statutes, Laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions, including all common law, relating to pollution or the protection of health, safety or the environment or the release of any materials into the environment, including those related to Hazardous Materials, air emissions, discharges to waste or public systems and health and safety matters.

Environmental Liability” means any liability or obligation, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), directly or indirectly, resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment, disposal or permitting or arranging for the disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

Environmental Representative” means each Vessel Owner and the Manager together with their respective employees and all of those persons for whom such Vessel Owner or the Manager is responsible under any Applicable Law in respect of any activities undertaken in relation to any of the Collateral Vessels.

Equity Interests” means, as to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

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

Event of Default” has the meaning specified in Article VII.

Excess Risks” means, in respect of a Collateral Vessel: (a) the proportion of claims for general average, salvage and salvage charges which are not recoverable as a result of the value at which that Collateral Vessel is assessed for the purpose of such claims exceeding her hull and machinery insured value; and (b) collision liabilities not recoverable in full under the hull and machinery insurance by reason of those liabilities exceeding such proportion of the insured value of that Collateral Vessel as is covered by the hull and machinery insurance.

Excluded Collateral Vessels” means each of:

(a) any Collateral Vessel with respect to which (i) any Security Document to which such Collateral Vessel or the applicable Vessel Owner is subject ceases to be valid in any material respect or (ii) any Security Document creating a Security Interest in such Collateral Vessel or the applicable Vessel Owner in favor of the Security Trustee ceases to provide a perfected first priority security interest in favor of the Security Trustee in such Collateral Vessel or the applicable Vessel Owner as a result of the act or inaction of an Obligor; and

 

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(b) any Collateral Vessel with respect to which the registration at the registry of any Approved Flag State is cancelled or any Collateral Vessel that is arrested or otherwise detained and not released within thirty (30) days.

Excluded Taxes” means 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, 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), and (b) any withholding Taxes imposed under FATCA.

FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively 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)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.

Federal Funds Effective Rate” means, for any day, the greater of (a) the rate calculated by the Federal Reserve Bank of New York based on such day’s Federal funds transactions by depositary institutions (as determined in such manner as the Federal Reserve Bank of New York shall set forth on its public website from time to time) and published on the next succeeding Business Day by the Federal Reserve Bank of New York as the Federal funds effective rate and (b) 0%.

Federal Reserve Board” means the Board of Governors of the Federal Reserve System of the United States.

Fee Letters” means any letter between (inter alios) any Finance Party and any Obligor which states that it is a “Fee Letter” for the purposes of this Agreement and “Fee Letter” means any of them.

Fees” means the Commitment Fee and other fees payable pursuant to any Fee Letter.

Finance Party” means, collectively, each Lender, each Issuing Bank, any Receiver and any Administrative Party.

Financial Officer” means, as to any Person, the chief financial officer, principal accounting officer, treasurer or controller of such Person.

Fronting Exposure” means, at any time there is a Defaulting Lender, such Defaulting Lender’s Applicable Percentage of the outstanding L/C Obligations with respect to Letters of Credit issued by such Issuing Bank other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.

GAAP” means, subject to Section 1.03, United States generally accepted accounting principles as in effect as of the date of determination thereof.

General Assignment” means in respect of a Collateral Vessel, the assignment of its Eligible Charter, any Charter Guarantee, any Requisition Compensation and the Earnings granted or to be granted by the relevant Vessel Owner in favor of the Security Trustee, together with any and all notices and acknowledgements entered into in connection therewith.

 

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Global Coordinator” means Citibank, N.A., in its capacity as global coordinator, and left lead mandated lead arranger and joint-bookrunner.

Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state 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 (including any supra-national bodies such as the European Union or the European Central Bank).

Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part) or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien); provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

Guarantor Financial Covenants” means the requirements set forth in Section 6.09(c) to (f).

Guarantor Group” means the Guarantor and each of its Subsidiaries.

Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes, and other substances or wastes of any nature regulated under or with respect to which liability or standards of conduct are imposed pursuant to any Environmental Law.

HK Collection Account” means the account of the Borrower maintained with Citibank, N.A., Hong Kong Branch with account number 1004151018.

Identified Vessels” means the vessels referred to in Exhibit C.

 

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IMO Decarbonization Trajectory” means the standard decarbonization trajectories produced or to be produced (as the case may be) from time to time by the Secretariat of the Poseidon Principles for each ship type and size class, being a representation of how many grams of CO2 a single vessel can emit to move one tonne of goods one nautical mile (gCO2/tnm) over the relevant time horizon, and on any Delta Test Date the IMO Decarbonization Trajectory shall be the most recent standard decarbonization trajectory which is applicable to the relevant Delta Test Period. The IMO Decarbonization Trajectory measured with reference to average efficiency ratio for containerships as of the date hereof (and as may be updated from time to time) is as per below:

 

Size (TEU)    2020      2021      2022      2023      2024      2025      2026  

0-999

     17.663577        17.194349        16.725121        16.255893        15.786665        15.317437        14.848209  

1,000-1,999

     15.480516        15.069280        14.658045        14.246809        13.835574        13.424338        13.013103  

2,000-2,999

     10.429868        10.152802        9.875735        9.598669        9.321602        9.044536        8.767469  

3,000-4,999

     8.677976        8.447448        8.216920        7.986392        7.755864        7.525336        7.294808  

5,000-7,999

     8.199880        7.982053        7.764225        7.546398        7.328570        7.110743        6.892915  

8,000-11,999

     6.982743        6.797249        6.611754        6.426260        6.240765        6.055270        5.869776  

12,000-14,500

     4.844465        4.715773        4.587082        4.458390        4.329698        4.201006        4.072314  

> 14,500

     4.844465        4.715773        4.587082        4.458390        4.329698        4.201006        4.072314  

Incremental Commitment” has the meaning specified in Section 2.21(a).

Incremental Commitment Effective Date” has the meaning specified in Section 2.21(c).

Incremental Lender” has the meaning specified in Section 2.21(b).

Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(b) all direct or contingent obligations of such Person arising under (i) letters of credit (including standby and commercial), bankers’ acceptances and bank guaranties and (ii) surety bonds, performance bonds and similar instruments issued or created by or for the account of such Person;

 

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(c) net obligations of such Person under any Hedging Agreement;

(d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(f) any agreement treated as a finance or capital lease in accordance with GAAP; and

(g) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Hedging Agreement on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any Indebtedness of any Person for purposes of clause (e) that is expressly made non-recourse or limited-recourse (limited solely to the assets securing such Indebtedness) to such Person shall be deemed to be equal to the lesser of (i) the aggregate principal amount of such Indebtedness and (ii) the fair market value of the property encumbered thereby as determined by such Person in good faith.

Indemnified Taxes” means (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 Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.

Indemnitee” has the meaning specified in Section 9.03(b).

Information” has the meaning specified in Section 9.12.

Initial Credit Agreement” means that certain Credit Agreement dated as of May 15, 2019 by and among certain of the parties hereto, as in effect immediately prior to the Restatement Date.

Insurances Assignment” means, in respect of a Collateral Vessel, the assignment of the Obligatory Insurances granted or to be granted in favor of the Security Trustee by the relevant Vessel Owner together with any and all notices and acknowledgments entered into in connection therewith.

Insurers” means the underwriters or insurance companies with whom any Obligatory Insurances are effected and the managers of any protection and indemnity or war risks association in which any or the Collateral Vessels may at any time be entered.

Intercreditor Agreement” means the intercreditor and proceeds agreement dated May 15, 2019 as amended and restated on or about the Restatement Date among, inter alios, the Borrower, the Guarantor, the Administrative Agent and the Security Trustee (as further amended and/or restated from time to time).

 

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Interest and Principal Coverage Ratio” means, as at any date of determination and with respect to any period, the ratio of EBITDA for such period to Interest and Principal Expense for such period.

Interest and Principal Expense” means all Interest Expense incurred and all scheduled payments of principal (excluding any final payment thereof due on the maturity date thereof) made by the Guarantor and its consolidated Subsidiaries during a Measurement Period.

Interest Expense” means all cash interest and cash commitment fees incurred by the Guarantor or the Borrower, as applicable, and its consolidated Subsidiaries during a Measurement Period.

Interest Payment Date” means, in relation to the Term Loans, each Payment Date and, in relation to any Revolving Loan, the last day of each Interest Period in respect thereof, and, in all cases, the Maturity Date.

Interest Period” means, with respect to each Borrowing and the Loans constituting the same, the period commencing on the relevant Borrowing Date and ending on (a) in the case of the Term Loan, the next Interest Payment Date, and thereafter each period commencing on the last day of the preceding Interest Period and ending on the Interest Payment Date immediately succeeding such last day; and (b) in the case of the Revolving Loans, the numerically corresponding day in the calendar month that is one, three or six months thereafter, as selected by the Borrower by notice to the Administrative Agent at least three Business Days before the beginning of such Interest Period, and thereafter each period commencing on the last day of the preceding Interest Period and ending on the date one, three or six months thereafter, as so selected by the Borrower; provided in each case that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period, (iii) no Interest Period shall extend beyond the relevant Maturity Date, and (iv) if no Interest Period is specified with respect to any Revolving Loan Borrowing, the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

Interpolated Rate” means, at any time, the rate per annum determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the rate as displayed on the applicable Reuters page (or on any successor or substitute page or service providing quotations of interest rates applicable to dollar deposits in the London interbank market comparable to those currently provided on such page, as determined by the Administrative Agent from time to time; in each case the “Screen Rate”) for the longest period (for which that Screen Rate is available) that is shorter than the Interest Period and (b) the Screen Rate for the shortest period (for which that Screen Rate is available) that exceeds the Interest Period, in each case, at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

Intra Group Loan” means:

(a) any loan or other Indebtedness advanced by an Obligor, as lender, to any other Obligor (other than the Guarantor), as borrower; and

 

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(b) any loan or other Indebtedness owing by the Borrower to a member of the Guarantor Group which is, as at the Closing Date, the shareholder of the owner of m.v. “Seaspan Thames”, “CMA CGM Tuticorin”, “MOL Brilliance”, “MOL Belief”, “YM World”, YM Wondrous”, “MOL Beauty” or “YM Wreath” or any other vessel owned, as at the Closing Date, directly or indirectly by Greater China Intermodal Investments LLC for purposes of adding a Collateral Vessel to the Collateral.

Intra Group Loan Agreement” means any agreement in respect of an Intra Group Loan .

IRS” means the United States Internal Revenue Service.

ISM Code” means the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organization Assembly as Resolutions A.741(18) and A.788(19), as the same may have been or may be amended or supplemented from time to time. The terms “safety management system”, “Safety Management Certificate”, “Document of Compliance” and “major non-conformity” shall have the same meanings as are given to them in the ISM Code.

ISP” means the International Standby Practices, International Chamber of Commerce Publication No. 590 (or such later version thereof as may be in effect at the applicable time).

ISPS Code” means the International Ship and Port Facility Security Code adopted by the International Maritime Organization Assembly as the same may have been or may be amended or supplemented from time to time.

Issuing Bank” means each Lender as the Borrower may from time to time select as an Issuing Bank hereunder pursuant to Section 2.07; provided that such Lender has agreed to be an Issuing Bank.

Joinder Agreement” means a joinder or similar agreement entered into by any Person (including any Lender) under Section 2.21 pursuant to which such Person shall provide an Incremental Commitment hereunder and (if such Person is not then a Lender) shall become a Lender party hereto.

Laws” means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

L/C Collateral Account” has the meaning specified in Section 2.07(k).

L/C Credit Extension” means, with respect to any Letter of Credit, the issuance or renewal thereof or the extension of the expiry date thereof, or the reinstatement or increase of the amount thereof.

L/C Disbursement” means a payment made by an Issuing Bank pursuant to a Letter of Credit.

 

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L/C Documents” means, as to any Letter of Credit, each application therefor and any other document, agreement and instrument entered into by the Borrower or a Subsidiary with or in favor of the applicable Issuing Bank and relating to such Letter of Credit.

L/C Fee” has the meaning specified in Section 2.09(b).

L/C Issuing Bank Sublimit” means, with respect to any Issuing Bank, $10,000,000 or such other amount as the Borrower and such Issuing Bank may from time to time agree, provided that the L/C Issuing Bank Sublimit in respect of any Issuing Bank which has agreed to issue Single Lender Letters of Credit only shall be the lesser of $10,000,000 and the then outstanding Revolving Loan Commitment of such Issuing Bank in its capacity as Lender.

L/C Obligations” means, at any time, the sum of (a) the aggregate maximum undrawn amount of all outstanding Letters of Credit at such time, including any automatic or scheduled increases provided for by the terms of such Letters of Credit, determined without regard to whether any conditions to drawing could be met at that time, plus (b) the aggregate amount of all L/C Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time. The L/C Obligations of any Revolving Lender at any time shall be its Revolving Commitment Percentage of the total L/C Obligations at such time, provided that the L/C Obligations in respect of any Single Lender Letter of Credit and the applicable Single Lender Issuing Bank shall be the full amount of such Single Lender Letter of Credit. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Article 29(a) of the UCP or Rule 3.13 or Rule 3.14 of the ISP or similar terms of the Letter of Credit itself, or if compliant documents have been presented but not yet honored, such Letter of Credit shall be deemed to be “outstanding” and “undrawn” in the amount so remaining available to be paid, and the obligations of the Borrower and each Lender shall remain in full force and effect until the Issuing Bank and the Lenders shall have no further obligations to make any payments or disbursements under any circumstances with respect to any Letter of Credit.

L/C Sublimit” means the Total Revolving Loan Commitments. The L/C Sublimit is part of, and not in addition to, the Revolving Facility.

Lead Sustainability Coordinator” means Société Générale, Hong Kong Branch, in its capacity as lead sustainability coordinator.

Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall have become party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.

Letter of Credit” means any standby letter of credit issued hereunder.

LIBO Rate” means, for any Interest Period with respect to any Borrowing, the greater of (a) the rate appearing on the applicable Reuters page (or on any successor or substitute page or service providing quotations of interest rates applicable to dollar deposits in the London interbank market comparable to those currently provided on such page, as determined by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period; provided that (i) if such rate is not available at such time for any reason, then the “LIBO Rate” for such Interest Period shall be the Interpolated Rate, and (ii) if the Interpolated Rate is not available, the “LIBO Rate” for such Interest Period shall be the Reference Bank Rate and (b) 0%.

 

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Lien” means any mortgage, pledge, hypothecation, collateral assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

Loans” means, collectively, the Term Loan and the Revolving Loans.

Loan Documents” means, collectively, this Agreement, the Intercreditor Agreement, the Hedging Agreements (in relation to the Loans), any subordination agreement entered into in connection with Section 5.02(g) of the Intercreditor Agreement, the Security Documents, any Borrowing Request, the L/C Documents, the Fee Letters, any agreement creating or perfecting rights in the Cash Collateral pursuant to the provisions of Section 2.19 and any other documents entered into in connection herewith.

LTM Rate” means the most recent US CPI rate as published by the U.S. Bureau of Labor Statistics, provided that the applicable indexation will have a floor of 0% p.a. and a cap of 3% p.a..

Management Agreement” means each management agreement between a Vessel Owner and the Manager in respect of a Collateral Vessel, as the same may be amended from time to time in accordance with this Agreement.

Management Agreement Assignment” means each assignment of a Management Agreement granted or to be granted in favor of the Security Trustee by a Vessel Owner with any and all notices and acknowledgements entered into in connection therewith, one to be entered into between the Manager and the relevant Vessel Owner.

Manager” means Seaspan Management Services Ltd. of Clarendon House, 2 Church Street, Hamilton, HM 11, Bermuda or such other professional manager or managers as may be approved by the Administrative Agent from time to time, provided that V.Group, Anglo-Eastern and Bernhard Schulte Shipmanagement are so approved for these purposes.

Manager’s Undertaking” means, in respect of each Collateral Vessel, a letter of undertaking to be issued by the Manager to the Security Trustee confirming it shall not make a claim to security ranking ahead of the Lenders’ security in respect of that Collateral Vessel in form and substance satisfactory to the Administrative Agent.

Mandated Lead Arrangers” means each of Bank of Montreal, Société Générale, Hong Kong Branch, National Australia Bank Limited, Bank of America, N.A. and Wells Fargo Bank, N.A., in their respective capacities as mandated lead arrangers and joint-bookrunners.

Margin” means (i) from the Restatement Date until September 4, 2022 with respect to any Revolving Loan, 2.00% per annum and with respect to any Term Loan, 1.80% per annum, and (ii) for any Margin Period thereafter, the aggregate of:

(a) the Margin applicable in the immediately preceding Margin Period; and

(b) (i) any Applicable Performance Margin Adjustment for the relevant Margin Period, minus (ii) any Applicable Charter Margin Adjustment in the immediately preceding Margin Period, plus (iii) any Applicable Charter Margin Adjustment for the relevant Margin Period, save that the collective aggregate of the foregoing (b)(i), (b)(ii) and (b)(iii) may not (A) exceed 0.025% per annum or (B) be less than -0.025% per annum, in each case for any single Margin Period (relative to the prior Margin Period),

 

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provided that, the collective aggregate of the foregoing paragraphs (a) and (b) shall not (X) exceed 1.85% per annum with respect to the Term Loan, and 2.05% per annum with respect to a Revolving Loan for any single Margin Period, or (Y) be less than 1.75% per annum with respect to the Term Loan and less than 1.95% per annum with respect to a Revolving Loan for any single Margin Period,

and provided further that, where the Borrower fails to deliver any of the Compliance Data, other items contemplated by Section 5.34(a) hereof and/or any Decarbonization Certificate required by this Agreement, in order to determine any Applicable Charter Margin Adjustment for the relevant Margin Period, the foregoing paragraph (b) shall be replaced with and applied as follows:

 

  “(b)

(i) 0.0125% per annum, minus (ii) any Applicable Charter Margin Adjustment in the immediately preceding Margin Period, save that the collective aggregate of the foregoing (b)(i) and (b)(ii) may not (A) exceed 0.025% per annum or (B) be less than -0.025% per annum, in each case for any single Margin Period (relative to the prior Margin Period),”.

Margin Period” means (i) for the first Margin Period, the period commencing on the Restatement Date and ending on September 4, 2022, and (ii) for any subsequent period, each 12 month period commencing on the September 5 Interest Payment Date which follows a Delta Test Date and ending on September 4, the following year (or if earlier, the Maturity Date).

Marketable Securities” means any bonds, stocks, notes or bills payable in a freely convertible and transferable currency and which are listed on a stock exchange acceptable to the Administrative Agent.

Market Value” means, in respect of any Collateral Vessel, the average of the two values of such Collateral Vessel provided by the Approved Valuers.

Material Adverse Effect” means a material adverse effect on (a) the ability of the Borrower to perform its Obligations, (b) the legality, validity, binding effect or enforceability against the Borrower of any Loan Document to which it is a party or (c) the rights, remedies and benefits available to, or conferred upon, the Administrative Parties, any Lender or any Hedge Counterparties under any Loan Documents.

Maturity Date” means the date falling five (5) years after the Restatement Date or, if such date is not a Business Day, on the immediately preceding Business Day.

Maximum Rate” has the meaning specified in Section 9.14.

Measurement Period” means, at any time, the last four fiscal quarters for the Guarantor or the Borrower, as applicable.

Minimum Collateral Amount” means, at any time, (i) with respect to Cash Collateral consisting of cash or deposit account balances, an amount equal to 102% of the Fronting Exposure of all Issuing Banks with respect to Letters of Credit issued and outstanding at such time and (ii) otherwise, a lower amount determined by the Administrative Agent and the Issuing Banks in their sole discretion.

 

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Mortgage” means, in respect of a Collateral Vessel, the first priority or first preferred ship mortgage, each given or to be given by the relevant Vessel Owner in favor of the Security Trustee and registered with the Approved Flag State registry of such Collateral Vessel.

Non-Consenting Lender” means any Lender that does not approve any consent, waiver or amendment that (a) requires the approval of all or all affected Lenders in accordance with the terms of Section 9.02 and (b) has been approved by the Required Lenders.

Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.

Non-Extension Notice Date” has the meaning specified in Section 2.07(b).

Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, the Borrower arising under any Loan Document or Hedging Agreement or otherwise with respect to any Loan or Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against the Borrower or any other Obligor thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding. Without limiting the foregoing, the Obligations include (a) the obligation to pay principal, interest, Letter of Credit commissions, charges, expenses, fees, indemnities and other amounts payable by the Borrower under any Loan Document or Hedging Agreement and (b) the obligation of the Borrower to reimburse any amount in respect of any of the foregoing that the Administrative Agent or any Lender, in each case in its sole discretion, may elect to pay or advance on behalf of the Borrower.

Obligatory Insurances” means, in respect of each Collateral Vessel: (a) all contracts and policies of insurance and all entries in clubs and/or associations which are from time to time required to be effected and maintained in accordance with this Agreement in respect of each of the Collateral Vessels; and (b) all benefits under the contracts, policies and entries under subsection (a) above and all claims in respect of them and the return of premiums.

Obligor” means the Borrower, the Guarantor and the Vessel Owners.

OFAC” has the meaning specified in Section 3.16(a).

Organizational Documents” means (a) as to any corporation, the charter or certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction), (b) as to any limited liability company, the certificate or articles of formation or organization and operating or limited liability agreement and (c) as to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

Original Financial Statements” means the consolidated financial statements of the Guarantor for the financial year ended 31 December 2020.

 

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Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document.

Participant” has the meaning specified in Section 9.04(d).

Participant Register” has the meaning specified in Section 9.04(d).

PATRIOT Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).

Payment Date” means each March 5, June 5, September 5, December 5 commencing on June 5, 2021, provided that if any such date is not a Business Day, the relevant Payment Date shall be the immediately succeeding Business Day.

Payment Disruption Event” means either or both of:

(a) a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Loan Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or

(b) the occurrence of any other event which results in a disruption (of a technical or systems related nature) to the treasury or payments operations of a Party preventing that, or any other Party: (i) from performing its payment obligations under the Loan Documents; or (ii) from communicating with other Parties in accordance with the terms of the Loan Documents,

(and which (in either such case)) is not caused by, and is beyond the control of, the Party whose operations are disrupted.

Permitted Liens” means, in respect of a Collateral Vessel: (a) Security Interests created by the Security Documents; (b) liens for unpaid crew’s wages including wages of the master and stevedores employed by the Collateral Vessel, outstanding in the ordinary course of trading for not more than one calendar month after the due date for payment; (c) liens for salvage; (d) liens for classification or scheduled dry docking or for necessary repairs to that Collateral Vessel that in each case are outstanding for not more than one month; (e) liens for collision; (f) liens for master’s disbursements incurred in the ordinary course of trading; (g) statutory and common law liens of carriers, warehousemen, mechanics, suppliers, materials men, repairers or other similar liens, including maritime liens, in each case arising in the ordinary course of business, outstanding for not more than one month and (h) liens for damages arising from maritime torts which are unclaimed, or are covered by insurance and any deductible applicable thereto, or in respect of which a bond or other security has been posted on behalf of the relevant Vessel Owner with the appropriate court or other tribunal to prevent the arrest or secure the release of such Collateral Vessel from arrest; provided that in the case of subsections (b) to (g) inclusive the amounts which give rise to such liens are paid when due (or, in the case of subsections (b) or (g) above, within one month of such amount being outstanding) or, if not paid when due are being disputed in good faith by appropriate proceedings (and for the payment of which adequate reserves or security are at the relevant time maintained or provided), provided further that such proceedings, whether by payment of adequate security into court or otherwise, do not give rise to a material risk of the relevant Collateral Vessel or any interest therein being seized, sold, forfeited or otherwise lost or of criminal liability on an Indemnitee.

 

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Platform” means Debt Domain, Intralinks, Syndtrak, DebtX or a substantially similar electronic transmission system.

Poseidon Principles” means the financial industry framework for assessing and disclosing the climate alignment of ship finance portfolios published in June 2019 as the same may be amended or replaced to reflect changes in applicable law or regulation or the introduction of or changes to mandatory requirements of the International Maritime Organization from time to time.

Prepayment Notice” means a notice by the Borrower to prepay Loans, which shall be in such form as the Administrative Agent may approve.

Present Value of Contracted Net Cash Flow” means, in respect of any Collateral Vessel and Eligible Charter, the Contracted Net Cash Flow in respect thereof discounted using a discount rate of 10% per annum (or, where the Terminal Value provider is VesselsValue, 8% per annum).

Program Debt” has the meaning specified in the Intercreditor Agreement.

Program Debt Documents” means (a) the credit agreement dated 30 December 2019 between, among others, the Borrower, the Guarantor, the Administrative Agent and the Lenders (as defined therein) party thereto from time to time, as amended and restated on or about the Restatement Date, (b) the credit agreement dated 14 October 2020 between, among others, the Borrower, the Guarantor, the Administrative Agent and the Lenders (as defined therein) party thereto from time to time, as amended and restated on or about the Restatement Date ((a) and (b) together, the “Existing Program Debt Documents”), and (c) any other Additional Debt Document.

Purchase Agreement” means, in respect of a Collateral Vessel, the memorandum of agreement or purchase agreement entered into or to be entered into between the relevant seller of such Collateral Vessel and the Vessel Owner, as buyer.

QCC Target Ratio” means in respect of any QCC Test Period, the proportion expressed as a percentage (Q) of (i) the number of Qualifying Charter Contracts which are executed and dated during that QCC Test Period (and, if elected by the Borrower, any Qualifying Charter Contracts which are extended or renewed during such period (such Qualifying Charter Contracts being referred to herein as “Renewals”)) and which contain a Sustainability Linked Charter Mechanism, to (ii) the total number of Qualifying Charter Contracts which are executed and dated during such QCC Test Period (and any Renewals) and calculated per the formula below:

 

LOGO

where LOGO [GRAPHIC APPEARS HERE] is the number Qualifying Charter Contracts which are executed and dated during that QCC Test Period (and any Renewals) and which contain a Sustainability Linked Charter Mechanism and [GRAPHIC APPEARS HERE] is the total number Qualifying Charter Contracts which are executed and dated during the same QCC Test Period (and any Renewals).

 

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QCC Test Date” means June 30, 2022 and thereafter each anniversary of such date in each subsequent calendar year provided that if any such date shall not be a Business Day, the relevant QCC Test Date shall be the immediately succeeding Business Day.

QCC Test Period” means the twelve (12) calendar month period commencing on January 1 and ending on December 31 immediately prior to the relevant QCC Test Date.

Qualifying Charter Contracts” means any firm contract for the employment of a vessel owned by a member of the Guarantor Group with a Person other than a member of the Guarantor Group, which has a remaining fixed term of not less than 12 months (which shall include any extension options which (i) if at the option of the Charterer, have been exercised, (ii) if at the option of the relevant vessel owner, have or have not yet been exercised and (iii) are automatically exercised (without any condition, requirement or other arrangement whereby such extension will not occur other than a determination from the relevant vessel owner otherwise)), and shall include any charter providing the applicable vessel owner with a termination right.

Receiver” means a receiver or receiver and manager or administrative receiver of the whole or any part of the Security Assets appointed under any Security Document.

Recipient” means (a) the Administrative Agent, (b) any Lender or (c) any Issuing Bank, as applicable.

Recognized Organization” means, in respect of a Collateral Vessel, an organization approved by the maritime administration of the Collateral Vessel’s flag state to verify that the ship energy efficiency management plans of vessels registered in such flag state are in compliance with Regulation 22A of Annex Vl and to issue “statements of compliance for fuel consumption reporting” confirming that vessels registered in such flag state are in compliance with that regulation, including any Classification Society.

Reference Bank Rate” means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Administrative Agent at its request by the Reference Banks:

(a) (other than where paragraph (b) below applies) as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in the relevant currency and for the relevant period were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period; or

(b) if different, as the rate (if any and applied to the relevant Reference Bank and the relevant currency and period) which contributors to the applicable Screen Rate are asked to submit to the relevant administrator,

provided that if none or only one of the Reference Banks supplies a quotation, there shall be no Reference Bank Rate for the relevant Interest Period.

Reference Banks” means Citibank, N.A., Bank of Montreal and Wells Fargo Bank, N.A., or such banks as otherwise may be appointed from time to time by the Administrative Agent in consultation with the Lenders and with the Borrower.

Register” has the meaning specified in Section 9.04(c).

 

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Related Contracts” means any or all of the following (as the context requires): (a) the Obligatory Insurances; (b) the Eligible Charters; (c) the Management Agreements; and (d) the Charter Guarantees.

Related Parties” means, with respect to any Person, such Person’s Affiliates, head office, other branches and regional offices, and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates, head office, other branches and regional offices.

Relevant Vessel” has the meaning specified in Section 4.02(a)(ii).

Relevant Vessel Owner” has the meaning specified in Section 4.02(a)(iii).

Removal Effective Date” has the meaning specified in Section 8.06(b).

Repayment Schedule” means the repayment schedule prepared in accordance with Section 2.03.

Required Deductible Amount” means, in respect of the Obligatory Insurances for a Collateral Vessel, an amount not to exceed the following amounts:

 

  (a)

in respect of hull cover, US$1,000,000;

 

  (b)

in respect of crew cover, US$30,000;

 

  (c)

in respect of collision cover, US$150,000;

 

  (d)

in respect of cargo cover, US$78,000; and

 

  (e)

in respect of any other cover, US$150,000.

Required Insurance Amount” means, in respect of a Collateral Vessel, the higher of (a) the amount which is 120% of the product of (i) the proportion of the Market Value of such Collateral Vessel to the total Market Value of all Collateral Vessels, multiplied by (ii) the total outstanding amount of the Secured Obligations, and (b) the Market Value of such Collateral Vessel calculated as of the date on which such Collateral Vessel is added to the Security Assets and thereafter as of the date of the annual renewal of the relevant Obligatory Insurances.

Required Lenders” means, at any time, Lenders holding more than 50% of the sum of (i) the aggregate principal amount of the Term Loan outstanding and (ii) the Total Revolving Loan Commitments then in effect. The outstanding Loans and Commitments of any Defaulting Lender shall be disregarded in determining the “Required Lenders” at any time.

Required Revolving Lenders” means, at any time, Lenders holding more than 50% of the Total Revolving Loan Commitments then in effect. The Revolving Loan Commitments of any Defaulting Lender shall be disregarded in determining the “Required Revolving Lenders” at any time.

Required Term Lenders” means, at any time, Term Lenders holding more than 50% of the aggregate principal amount of the Term Loan outstanding. The outstanding Term Loan and Term Loan Commitments of any Defaulting Lender shall be disregarded in determining the “Required Term Lenders” at any time.

 

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Requisition Compensation” means, in respect of a Collateral Vessel, all moneys or other compensation payable by reason of requisition for title to, or other compulsory acquisition of, that Collateral Vessel including requisition for hire.

Resignation Effective Date” has the meaning specified in Section 8.06(a).

Resolution Authority” means, an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.

Responsible Officer” means (a) the chief executive officer, president, executive vice president or a Financial Officer of the Borrower, (b) solely for purposes of the delivery of incumbency certificates and certified Organizational Documents and resolutions pursuant to Section 4.01, any vice president, secretary or assistant secretary of the Borrower and (c) solely for purposes of Borrowing Requests, requests for L/C Credit Extensions, certifying extracts of Qualifying Charter Contracts for the purposes of any Compliance Data, prepayment notices and notices for Commitment terminations or reductions given pursuant to Article II, any other officer or employee of the Borrower so designated from time to time by one of the officers described in clause (a) in a notice to the Administrative Agent (together with evidence of the authority and capacity of each such Person to so act in form and substance satisfactory to the Administrative Agent). Any document delivered hereunder that is signed by a Responsible Officer of the Borrower shall be conclusively presumed to have been authorized by all necessary corporate, partnership or other action on the part of the Borrower and such Responsible Officer shall be conclusively presumed to have acted on behalf of the Borrower.

Restatement Date” means the date on which each of the conditions specified in Section 4.04 is satisfied (or waived in accordance with Section 9.02), such date being May 19, 2021.

Revolving”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are made pursuant to Section 2.01.

Revolving Commitment Percentage” means, with respect to any Revolving Lender, the percentage which such Revolving Lender’s Revolving Loan Commitment then constitutes of the Total Revolving Loan Commitments.

Revolving Credit Exposure” means, as to any Lender at any time, the aggregate principal amount at such time of its outstanding Revolving Loans and such Lender’s participation in L/C Obligations at such time.

Revolving Facility” means the Revolving Loan Commitments and all Credit Extensions thereunder.

Revolving Lender” means each Lender having a Revolving Loan Commitment.

Revolving Loan” means a loan made by a Lender to the Borrower pursuant to Section 2.02(a).

Revolving Loan Availability Period” means the period from the Restatement Date to but excluding the Maturity Date.

 

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Revolving Loan Commitment” means, as to each Revolving Lender, the obligation of such Lender to make, on and subject to the terms and conditions hereof, Revolving Loans to the Borrower pursuant to Section 2.02 in an aggregate principal amount at any one time outstanding up to but not exceeding the amount set forth opposite the name of such Lender in Schedule 2.01 under the heading “Revolving Loan Commitment” or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Revolving Loan Commitment, as applicable, as such amount may be reduced pursuant to Section 2.5 or increased or reduced pursuant to assignments effected in accordance with Section 9.04.

Sanctioned Jurisdiction” means, at any time, a country or territory that is the subject of Sanctions.

Sanctioned Person” means, at any time, (a) any Person listed in, or acting on behalf of a Person listed in, any Sanctions related list maintained by any Sanctions Authority, (b) any Person located, organized, or resident in a Sanctioned Jurisdiction, or (c) any other subject of Sanctions, including, without limitation, any Person controlled or 50 percent or more owned in the aggregate, directly or indirectly, by any subject or subjects of Sanctions.

Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by any Sanctions Authority.

Sanctions Authority” means the United States (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, the U.S. Department of Commerce or through any existing or future statute or Executive Order), the United Kingdom (including, without limitation, Her Majesty’s Treasury), the European Union and any EU member state, the French Republic, the United Nations Security Council, Canada, Australia (including without limitation, the Department of Foreign Affairs and Trade) and Hong Kong Monetary Authority and any other governmental authority with jurisdiction over the Obligors.

Sanctions Target” means a Sanctioned Person or Sanctioned Jurisdiction.

Screen Rate” has the meaning specified in the definition of the term “Interpolated Rate”.

SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

Security Assets” means any asset which is the subject of a Security Interest created by a Security Document.

Security Documents” means: (a) the Mortgages; (b) the Deeds of Covenant; (c) the Insurances Assignments; (d) the Management Agreement Assignments; (e) the General Assignments; (f) the Account Charges; (g) the Manager’s Undertakings; (h) the Share Pledges; (i) any Charterer’s Undertakings, (j) any Additional Security; and (k) any other document designated as such in writing by the Borrower or any Vessel Owner and the Administrative Agent; in each case together with any and all notices and acknowledgements entered into and in connection therewith.

Security Interest” means any mortgage, pledge, lien, charge, assignment, hypothecation or security interest or any other agreement or arrangement having a similar effect.

Security Trustee” means UMB Bank, National Association.

 

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Shareholders’ Equity” means, as of any date of determination, consolidated shareholders’ equity of the Borrower and its Subsidiaries as of such date determined in accordance with GAAP.

Share Pledge” means, in relation to the Borrower and each Vessel Owner, each first priority charge, pledge or mortgage or equivalent over the shares in the Borrower or Vessel Owner (as the case may be) to be given by: (a) in the case of the Borrower, the Guarantor; and (b) in the case of each Vessel Owner, the Borrower, in each case in favor of and in form and substance satisfactory to the Security Trustee and “Share Pledges” means all such share pledges.

Single Lender Issuing Bank” means the Issuing Bank in respect of any Single Lender Letter of Credit.

Single Lender Letter of Credit” means a Letter of Credit issued pursuant to Section 2.02(c) for which the applicable Issuing Bank has no Fronting Exposure to any other Lender.

Statement of Compliance” means a Statement of Compliance related to fuel oil consumption pursuant to regulations 6.6 and 6.7 of Annex VI.

Subsidiary” of a Person means a corporation, partnership, limited liability company, association or joint venture or other business entity of which a majority of the Equity Interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time owned or the management of which is controlled, directly, or indirectly through one or more intermediaries, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

Substitute Vessel” has the meaning set forth in Section 6.05.

Sustainability Linked Charter Mechanism” means, in the sole opinion of the Lead Sustainability Coordinator, acting reasonably, a qualifying contractual provision of a Qualifying Charter Contract providing for the relevant charter rate to be increased and/or reduced, by an amount which is not less than 0.5% of the relevant initial charter rate, and where any such increase and reduction in the charter rate is subject to and dependent on the alignment of the relevant vessel’s carbon intensity, measured by that vessel’s AER, EEOI, or some other broadly accepted emissions metric for which the International Maritime Organization produces a related trajectory, with such trajectory.

Swap” means any trade or transaction entered into by the Borrower and a Hedge Counterparty under or pursuant to a Hedging Agreement.

Swap Termination Value” means, in respect of any one or more Swaps, after taking into account the effect of any legally enforceable netting agreement relating to such Swaps, (a) for any date on or after the date such Swaps have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swaps, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swaps (which may include a Lender or any Affiliate of a Lender).

 

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Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

Terminal Value” means, in respect of any Collateral Vessel: (a) the present value (using a discount rate of 10% per annum) of the forward projected value for such Collateral Vessel as at the maturity of the relevant Eligible Charter (which shall, for these purposes, take account of any extension option which is included for the purposes of the definition of Eligible Charter for such Collateral Vessel) as provided by Maritime Strategies International Ltd; or (b) if the Borrower has elected that VesselsValue valuations shall be used for all Collateral Vessels on the applicable calculation date, the fixed age valuation for such Collateral Vessel as at the maturity of the relevant Eligible Charter (which shall, for these purposes, take account of any extension option which is included for the purposes of the definition of Eligible Charter for such Collateral Vessel) as provided by VesselsValue (with no discount rate applicable). Where the Eligible Charter of any Collateral Vessel has been extended and the Terminal Value on any Test Date would otherwise be calculated on the basis of valuations which pre-date such extension, the Borrower shall be permitted to obtain an updated valuation for such Collateral Vessel which shall be used for the purposes of calculating the Terminal Value of such Collateral Vessel.

Term Lender” means each Lender having a Term Loan Commitment.

Term Loan” has the meaning set forth in Section 2.01.

Term Loan Availability Period” means the period from the Restatement Date to but excluding the Term Loan Availability Termination Date.

Term Loan Availability Termination Date” means the date falling six (6) months after the Restatement Date (or, if such date is not a Business Day, on the next preceding Business Day).

Term Loan Commitment” means, as to each Term Lender, the obligation of such Lender to make, on and subject to the terms and conditions hereof, a Term Loan to the Borrower pursuant to Section 2.01(b) in an aggregate principal amount up to but not exceeding the amount set forth opposite the name of such Lender in Schedule 2.01 under the heading “Term Loan Commitment” or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Term Loan Commitment, as applicable, as such amount may be reduced pursuant to Sections 2.05 or 2.06 or increased or reduced pursuant to assignments effected in accordance with Section 9.04.

Term Loan Required Payments” has the meaning given in Section 2.03(a)(i).

Test Date” means: (a) any BB Test Date; and (b) any Determination Date.

Total Assets” means, in respect of the Guarantor on a consolidated basis, the following, in each case as indicated on the most recently delivered financial statement of the Guarantor and its consolidated Subsidiaries:

(a) all of the assets of the types presented on its consolidated balance sheet; less

(b) assets under any vessel construction or ship purchase agreement (including novation and assignment and assumption agreements) that the Guarantor or any of its Subsidiaries is required to record on its books under GAAP even though such entity is no longer the legal owner of the vessel or legally obligated to take delivery of the vessel.

 

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Total Borrowings” means, in respect of the Guarantor on a consolidated basis and without duplication, in each case as indicated on the most recently delivered financial statement of the Guarantor and its Subsidiaries, the aggregate of the following:

 

  (a)

the outstanding principal amount of any moneys borrowed; plus

 

  (b)

the outstanding principal amount of any acceptance under any acceptance credit; plus

 

  (c)

the outstanding principal amount of any bond, note, debenture or other similar instrument; plus

 

  (d)

the book values of indebtedness under a lease, charter, hire purchase agreement or other similar arrangement which would, in accordance with GAAP, be treated as a finance or capital lease; plus

 

  (e)

the outstanding principal amount of all moneys owing in connection with the sale or discounting of receivables (otherwise than on a non-recourse basis or which otherwise meet any requirements for de-recognition under GAAP); plus

 

  (f)

the outstanding principal amount of any indebtedness arising from any deferred payment agreements arranged primarily as a method of raising finance or financing the acquisition of an asset (except trade payables); plus

 

  (g)

any fixed or minimum premium payable on the repayment or redemption of any instrument referred to in clause (c) above; and plus

 

  (h)

the outstanding principal amount of any indebtedness of any Person other than a Subsidiary of the Guarantor of a type referred to in the above clauses of this definition which is the subject of a guarantee (or other agreement by which recourse is granted to the Guarantor) given by the Guarantor to the extent that such guaranteed indebtedness is determined and given a value in respect of the Guarantor on a consolidated basis in accordance with GAAP.

Notwithstanding the foregoing, “Total Borrowings” shall not include (a) Indebtedness or obligations arising from derivative transactions, such as protecting against interest rate or currency fluctuations or (b) Indebtedness under any vessel construction or ship purchase agreement (including novation and assignment and assumption agreements) that the Guarantor is required to record on its books under GAAP even though the Guarantor is no longer the legal owner of the vessel or legally obligated to take delivery of the vessel.

Total Loss” means in relation to a Collateral Vessel:

(a) actual, constructive, compromised, agreed or arranged total loss of that Collateral Vessel;

(b) requisition for title or other compulsory acquisition of that Collateral Vessel otherwise than by requisition for hire;

(c) capture, seizure, arrest, detention, or confiscation of that Collateral Vessel by any government or by persons acting or purporting to act on behalf of any government or by any other person which deprives the Vessel Owner of that Collateral Vessel or as the case may be the Charterer of the use of that Collateral Vessel for more than sixty (60) days after that occurrence; and

 

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(d) requisition for hire of that Collateral Vessel by any government or by persons acting or purporting to act on behalf of any government which deprives the Vessel Owner or as the case may be the Charterer of the use of that Collateral Vessel for a period of sixty (60) days, other than a Charter of the Collateral Vessel to a government or government agency approved by the Borrower and by the Administrative Agent.

Total Revolving Loan Commitment” means, at any time, the sum of the Revolving Loan Commitments at such time.

UBO” means (a) any of Kyle Washington, Kevin Washington, Dennis Washington or any of their estate, spouse, and/or descendants; (b) any trust for the benefit of the persons listed in (a); (c) Fairfax Financial Holdings Limited; (d) an Affiliate of any of the persons listed in (a), (b) or (c); or (e) a combination of the foregoing.

UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.

UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.

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

Unrelated Parties” has the meaning given in Section 3.35.

Vessel Disposition” has the meaning given to such term in Section 6.06.

Vessel Disposition Date” means the date of any Vessel Disposition in accordance with the requirements set forth in Section 6.06.

Vessel Owner” means any special purpose company that owns a Collateral Vessel and the entire issued share capital of which is acquired or to be acquired by the Borrower.

Vessel Owner Account” means, in respect of any Vessel Owner, any account in the name of the applicable Vessel Owner opened or to be opened with the Account Bank into which Earnings shall be paid, as more particularly described in the relevant Account Charge relating thereto.

Vessel Substitution Date” means the date of any vessel substitution in accordance with the requirements set forth in Section 6.05.

Wholly-Owned” means, as to a Subsidiary of a Person, a Subsidiary of such Person all of the outstanding Equity Interests of which (other than (a) director’s qualifying shares and (b) shares issued to foreign nationals to the extent required by Applicable Law) are owned by such Person and/or by one or more Wholly-Owned Subsidiaries of such Person.

 

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Withholding Agent” means the Borrower and the Administrative Agent.

Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.

SECTION 1.02 Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (e) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

SECTION 1.03 Accounting Terms; Changes in GAAP.

(a) Accounting Terms. Except as otherwise expressly provided herein, all accounting terms not otherwise defined herein shall be construed in conformity with GAAP as in effect on the Closing Date. Financial statements and other information required to be delivered by the Borrower to the Lenders pursuant to Sections 5.01(a) and 5.01(b) shall be prepared in accordance with GAAP as in effect at the time of such preparation. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of the Borrower and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 on financial liabilities shall be disregarded. Notwithstanding any changes in GAAP after the Closing Date, any lease of the Obligors that would be characterized as an operating lease under GAAP as in effect on the Closing Date (whether such lease is entered into before or after the Closing Date) shall not constitute Indebtedness or a capital lease (and shall continue to be characterized as an operating lease) under this Agreement or any other Loan Document as a result of such changes in GAAP.

 

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(b) Changes in GAAP. If the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Closing Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

SECTION 1.04 Rates. The Administrative Agent does not warrant or accept responsibility for, and shall not have any liability with respect to, the administration, submission or any other matter related to the rates in the definition of “LIBO Rate” or with respect to any comparable or successor rate thereto.

SECTION 1.05 Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the amount of such Letter of Credit available to be drawn at such time; provided that with respect to any Letter of Credit that, by its terms or the terms of any L/C Document related thereto, provides for one or more automatic increases in the available amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum amount is available to be drawn at such time.

ARTICLE II

COMMITMENTS

SECTION 2.01 Term Loan Commitments.

(a) Term Loan. Each Term Lender severally, and not jointly with the other Term Lenders, agrees, upon the terms and subject to the conditions herein set forth, to make term loans denominated in US Dollars (the “Term Loan”) available to Borrower during the Term Loan Availability Period in an aggregate principal amount up to but not exceeding such Term Lender’s Term Loan Commitment. The amount of each Borrowing under the Term Loan shall be less than or equal to the Advance Rate therefor. Amounts repaid or prepaid with respect to the Term Loan may not be re-borrowed. Unless previously terminated, the Term Loan Commitment of each Term Lender shall automatically terminate at 5:00 p.m. (New York City time) on the Term Loan Availability Termination Date.

(b) Procedure for Term Loan Borrowing. Borrower may make up to 12 Borrowings under the Term Loan during the Term Loan Availability Period, provided that Borrower shall give the Administrative Agent a revocable Borrowing Request (which must be received by the Administrative Agent prior to 12:00 Noon, New York City time three Business Days prior to the requested Borrowing Date), specifying (i) the amount to be borrowed, (ii) the applicable Collateral Vessel(s) and (iii) the requested Borrowing Date. Each borrowing of the Term Loan shall be in an amount equal to at least US$10,000,000. Upon receipt of any such Borrowing Request from Borrower, the Administrative Agent shall promptly notify each Lender thereof. Each Term Lender will make the amount of its pro rata share of the Term Loan advance available to the Administrative Agent for the account of the Borrower prior to 12:00 Noon, New York time, on the Borrowing Date requested by Borrower in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the Borrower by the Administrative Agent crediting the Collection Account or, at the Borrower’s option, by effecting a wire transfer of such amounts to an account designated by the Borrower to the Administrative Agent. If the Borrower revokes any Borrowing Request, the Borrower shall compensate the Lenders in connection with such revocation in accordance with Section 2.13.

 

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(c) Prefunding Arrangements.

(i) The Borrower shall be permitted to request in any Borrowing Request that the relevant Borrowing be credited to an escrow account (the “Escrow Account”) held by Citibank, N.A. as escrow agent (the “Escrow Agent”) under an escrow agreement in form and substance satisfactory to the Administrative Agent and the Lenders (the “Escrow Agreement”). In such circumstances, the requirement to satisfy the conditions set out in Section 4.02 shall be deferred and such conditions (together with any conditions to the release of the Borrowing from the Escrow Account under the Escrow Agreement) shall instead be required to be satisfied prior to, or simultaneously with, the release of the relevant Borrowing from the Escrow Account. Prior to the release of the relevant Borrowing from the Escrow Account, the Borrower shall have no right or interest in respect of such funds.

(ii) If the relevant Borrowing (or part thereof) is returned to the Administrative Agent pursuant to the terms of the Escrow Agreement, such funds shall be returned by the Administrative Agent to the Lenders and the relevant Borrowing shall (to the extent of the funds so returned to the Lenders) be deemed not to have occurred, provided that the Borrower shall be required to pay interest on the relevant funds on and from the date of payment to the Escrow Account up to but excluding the date on which the funds are returned. Such interest shall be payable on the date the relevant funds are returned and shall be calculated at the rate that would otherwise have applied if such amount constituted a Borrowing for such period.

(iii) If the Administrative Agent is satisfied that the conditions set out in Section 4.02 in relation to any Borrowing which has been credited to an Escrow Account have been satisfied or will upon release of such Borrowing from the Escrow Account be satisfied, the Administrative Agent shall execute a release instruction in respect thereof and the Borrowing Date in relation to the funds so released shall be deemed for all purposes under this Agreement, save for the purposes of the calculation of interest which shall accrue from the date the relevant funds are paid to the Escrow Account, to be the date of such release.

(iv) The Borrower shall indemnify, on written demand, the Finance Parties for (A) in the case of any funds returned to the Administrative Agent pursuant to any Escrow Agreement, amounts set out in Section 2.13 as if such return constituted a prepayment and (B) any other costs, losses and expenses, as the case may be, incurred by the Finance Parties in connection with the arrangements set forth in this Section 2.01(c). For the avoidance of any doubt, the Finance Parties shall not be liable for any costs, expenses or other amounts payable to the Escrow Agent under or pursuant to the Escrow Agreement.

SECTION 2.02 Revolving Loan Commitments.

(a) Revolving Loans. Each Revolving Lender severally, and not jointly with the other Revolving Lenders, agrees, upon the terms and subject to the conditions herein set forth, to make revolving loans to the Borrower at any time and from time to time during the Revolving Loan Availability Period in an aggregate principal amount not to exceed, when added to such Revolving Lender’s LC Exposure (each a “Revolving Loan” and collectively, the “Revolving Loans”), the Revolving Loan Commitment of such Lender, which Revolving Loans may be repaid and re-borrowed in accordance with the provisions of this Agreement. Each Borrowing of a Revolving Loan shall, subject to clause 2.02(c)

 

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below, be made from the Revolving Lenders pro rata in accordance with their respective Revolving Loan Commitments; provided, however, that the failure of any Revolving Lender to make any Revolving Loan shall not in itself relieve the other Revolving Lenders of their obligations to lend. At no time shall the sum of the then outstanding aggregate principal amount of the Revolving Loans plus the LC Exposure exceed the Total Revolving Loan Commitment. Unless previously terminated, the Revolving Loan Commitment of each Revolving Lender shall automatically terminate at 5:00 p.m. (New York City time) on the Maturity Date.

(b) Procedure for Revolving Loan Borrowing. Borrower may borrow Revolving Loans under the Revolving Loan Commitment on any Business Day during the Revolving Loan Availability Period, provided that Borrower shall give the Administrative Agent an irrevocable Borrowing Request (which must be received by the Administrative Agent prior to 12:00 Noon, New York time three Business Days prior to the requested Borrowing Date), specifying (i) the amount to be borrowed, (ii) the requested Borrowing Date, and (iii) the initial Interest Period therefor. Each borrowing of Revolving Loans shall be in an amount equal to at least US$4,000,000 or a whole multiple of US$1,000,000 in excess thereof. Upon receipt of such Borrowing Request from Borrower, the Administrative Agent shall promptly notify each Revolving Lender thereof. Each Revolving Lender will, subject to clause 2.02(c) below, make the amount of its pro rata share of Revolving Loans available to the Administrative Agent for the account of the Borrower prior to 12:00 Noon, New York time, on the Borrowing Date requested by Borrower in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the Borrower by the Administrative Agent crediting the Collection Account or, at the Borrower’s option, by effecting a wire transfer of such amounts to an account designated by the Borrower to the Administrative Agent. Not more than 5 Interest Periods in respect of Revolving Loans shall be outstanding at any time.

(c) Procedure for Single Lender Letters of Credit. If the Borrower requests the issuance of a Single Lender Letter of Credit from a Single Lender Issuing Bank, such issuance shall be made from the Revolving Loan Commitments of the applicable Single Lender Issuing Bank only and not pro rata in accordance with the respective Revolving Loan Commitments of each Revolving Lender. In such circumstances, all subsequent Credit Extensions in respect of Revolving Loans shall be adjusted such that the pro rata share of any Single Lender Issuing Bank is reduced and reallocated to the other Revolving Lenders pro rata so that, as far as possible, the share of all Revolving Lenders in all Credit Extensions in respect of the Revolving Loans is pro rata in accordance with their respective Revolving Loan Commitments.

SECTION 2.03 Repayment Schedules.

(a) Promptly following the issuance of the first Borrowing Request in respect of the Term Loan, the Administrative Agent will, in consultation with the Borrower and the Term Lenders, prepare a repayment schedule in respect of the Term Loan, and promptly following the issuance of each subsequent Borrowing Request in respect of the Term Loan, the Administrative Agent will, in consultation with the Borrower and the Term Lenders, revise the repayment schedule in respect of the Term Loan to take into account the additional advance being made under such Borrowing Request (the “Repayment Schedule”). The Repayment Schedule will be prepared on the basis that:

(i) the Borrower will repay the Term Loan in instalments on each Payment Date (the “Term Loan Required Payments”); and

 

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(ii) the Term Loan will amortize, commencing on the first Borrowing Date in respect of the Term Loan until the Maturity Date, at a rate of 8% per annum, which rate shall be calculated on the basis of the aggregate amount of the Term Loan which has been advanced (excluding any amortization payments which have previously been made) as at the applicable Payment Date, and such annual repayments shall be split pro rata over each of the applicable Payment Dates.

(b) The Administrative Agent and the Borrower will agree such Repayment Schedule prior to the relevant Borrowing Date.

(c) If any optional partial prepayment of the Term Loan is made pursuant to Section 2.05(a), or any amount of the Term Loan is prepaid as a result of a Cash Sweep Event, such amounts shall reduce the Term Loan Required Payments pro rata (or, if the Borrower makes an election in accordance with Section 2.05(b)(ii)(y), the next in time amortization payment(s) only) and the Administrative Agent will, in consultation with the Borrower and the Term Lenders, revise the repayment schedule to take into account the relevant partial prepayment and its required manner of application pursuant hereto. The Administrative Agent and the Borrower will agree such Repayment Schedule. The revised repayment schedule shall thereafter be the “Repayment Schedule” for the purposes of this Agreement

SECTION 2.04 Repayment of the Loans

(a)Term Loan. The Borrower shall repay the Term Loan as follows:

(i) on each Payment Date, the Term Loan Required Payments in accordance with the Repayment Schedule; and

(ii) on the Maturity Date, the outstanding principal balance of the Term Loan.

(b) Revolving Loans. The Borrower shall not be required to repay the principal amount of the Revolving Loans prior to the Maturity Date and, on such date, the Borrower shall repay the outstanding principal amount of the Revolving Loans (together with any accrued but unpaid interest thereon).

SECTION 2.05 Optional Prepayments

(a) Optional Prepayments. The Borrower may, upon notice to the Administrative Agent, at any time and from time to time prepay any Borrowing in whole or in part without premium or penalty; provided that (i) such notice shall be in the form of a written Prepayment Notice, appropriately completed and signed by a Responsible Officer of the Borrower, or may be given by telephone to the Administrative Agent (if promptly confirmed by such a written Prepayment Notice consistent with such telephonic notice) and must be received by the Administrative Agent not later than 11:00 a.m. (New York City time) three Business Days before the date of prepayment; (ii) such Prepayment Notice shall specify (A) whether such prepayment shall be applied to repay the outstanding Revolving Loans of the Revolving Lenders and/or prepay the Term Loans of the Term Lenders and/or prepay outstanding principal under other Program Debt Documents, (B) the prepayment date and (C) the principal amount of each Borrowing or portion thereof to be prepaid; and (iii) each such partial prepayment shall be in an amount not less than $1,000,000 or a larger multiple of $1,000,000. Promptly following receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise the applicable Lenders of the contents thereof. Each Prepayment Notice shall be irrevocable.

 

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(b) Application. Each optional prepayment of a Borrowing shall (i) in the case of an optional prepayment of the Revolving Loan, reduce the outstanding principal amount of the Revolving Loan and, (ii) in the case of an optional prepayment of the Term Loan, be applied (x) to reduce all Term Loan Required Payments pro rata, or (y) if the Borrower so directs in relation to any optional partial prepayment of the Term Loan pursuant to Section 2.05(a), against the next in time amortization payment(s) only. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.08, together with any additional amounts required pursuant to Section 2.13. Any amounts of the Revolving Loans that are repaid under this Section 2.05 may be re-borrowed in accordance with the terms of this Agreement.

(c) Permanent Commitment Reductions. Borrower may, at its option from time to time, permanently reduce, in whole or in part, the Revolving Commitments upon at least three (3) Business Days’ prior written notice to Agent, which notice shall specify the amount and effective date of the reduction and shall be irrevocable once given. Each reduction (i) in the case of a partial reduction, shall be in a minimum amount of $5,000,000 or an increment of $1,000,000 in excess thereof and (ii) shall not reduce the aggregate Revolving Commitments to an amount less than the sum of (A) the aggregate principal amount of Revolving Loans outstanding at such time plus (B) the outstanding L/C Obligations at such time (unless accompanied by a corresponding prepayment of such outstanding Revolving Loans).

SECTION 2.06 Mandatory Prepayments.

(a) [Reserved].

(b) Illegality. If it is or will be unlawful in any jurisdiction for a Lender to perform any of its obligations under any Loan Documents, or to fund or maintain its share in the Loans, or any Obligor is or becomes a Sanctioned Person, and the Lender (or in the case of any Obligor being or becoming a Sanctioned Person, any Lender) has notified the Administrative Agent and the Borrower of the same: (i) the Borrower shall repay or prepay that Lender’s participation in the Loans in full; and (ii) the Commitments of that Lender will be immediately cancelled. The date for repayment or prepayment referred to in (i) above will be, (x) in the case where it is already unlawful for such Lender to perform such obligations or to fund or maintain its share in the Loans, or an Obligor has become a Sanctioned Person, as soon as practicable and (y) in the case of unlawfulness that will occur in the future, the date specified by that Lender in the relevant notification, which shall not be earlier than ten (10) Business Days preceding the last day of any applicable grace period allowed by law and which shall be a date falling at least thirty (30) days from the date of the notice (but in any event no later than the last day of any applicable grace period allowed by law).

(c) Change of Control. Upon the occurrence of a Change of Control, the Borrower shall (i) prepay the Loans in full, together with accrued interest thereon to the date of such prepayment, (ii) discharge all of the L/C Obligations, if any, by Cash Collateralizing such L/C Obligations, and (iii) terminate all of the unused Commitments, if any. Any prepayment of the Loans under this Section 2.06(c) shall be made on the date of occurrence of such Change of Control.

(d) Failure of Security. If any of the Security Documents do not, or shall have ceased to, constitute an enforceable Security Interest over the monies, interests and assets expressed to be assigned, mortgaged, charged, pledged or over which Security Interests are otherwise created or expressed to be created thereby (a “Collateral Defect”), and (if the same is capable of remedy) the same has not been remedied to the satisfaction of the Administrative Agent within 15 Business Days (provided that during such period the Borrower is diligently taking action to remedy such Collateral Defect), the Administrative Agent may by written notice to the Borrower declare that the Loans shall become immediately due and payable in whole or in part by the Borrower, provided that if the Collateral Defect relates to some but not all of the Collateral Vessels, the Borrower may prepay a portion of the Loans pursuant to Section 2.05(a) in such amount as is required such that, following such payment, no BB Event and no DSCR Cash Sweep would be continuing (for these purposes, not taking into account the Collateral Vessel(s) the subject of the Collateral Defect).

 

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(e) Unlawfulness. If it is or becomes unlawful for an Obligor to perform any of its material obligations under the Loan Documents or any Related Contract other than as a result of any action or inaction of an Obligor (an “Unlawfulness Event”), and (if the same is capable of remedy) the same has not been remedied to the satisfaction of the Administrative Agent within 15 Business Days (provided that during such period the Borrower is diligently taking action to remedy such Unlawfulness Event), the Administrative Agent may by written notice to the Borrower declare that the Loans shall become immediately due and payable in whole or in part by the Borrower, provided that if the Unlawfulness Event relates to some but not all of the Collateral Vessels, the Borrower may prepay a portion of the Loans pursuant to Section 2.05(a) in such amount as is required such that, following such payment, no BB Event and no DSCR Cash Sweep would be continuing (for these purposes, not taking into account the Collateral Vessel(s) the subject of the Unlawfulness Event).

(f) Application of Mandatory Prepayments. Any repayment or Prepayment under Section 2.06(c) to (e) (inclusive) shall be applied, pro rata and pari passu, to repay all outstanding principal hereunder and the outstanding principal under any other Program Debt Documents; provided that for the purposes of this Agreement, such amounts shall be applied first to repay any outstanding principal of the Revolving Facility under this Agreement, and second, to repay any outstanding principal of the Term Loan; provided further that if any relevant Secured Party thereunder elects not to receive any such amounts, those amounts shall be applied to repay the outstanding principal of the Term Loan under this Agreement pro rata to the remaining installments.

SECTION 2.07 Letters of Credit.

(a) General. Subject to the terms and conditions set forth herein, in addition to the Loans provided for in Sections 2.01 and 2.02, the Borrower may request any Issuing Bank, in reliance on the agreements of the Revolving Lenders set forth in this Section, to issue, at any time and from time to time during the Revolving Loan Availability Period, Letters of Credit denominated in Dollars for its own account or the account of any of its Subsidiaries in such form as is acceptable to the Administrative Agent and such Issuing Bank in its reasonable determination. Letters of Credit issued hereunder shall constitute utilization of the Revolving Loan Commitments. The Borrower shall not request any issuance of a Letter of Credit unless one or more Lenders have agreed to act as an Issuing Bank hereunder (on such terms and subject to such conditions as the Borrower and the applicable Lender(s) may agree). As at the Restatement Date, Citibank, N.A., Bank of Montreal and Wells Fargo Bank, N.A. have agreed (and each, by its execution of this Agreement, confirms its agreement) to be Issuing Banks in respect of Single Lender Letters of Credit only.

(b) Notice of Issuance, Amendment, Extension, Reinstatement or Renewal. To request the issuance of a Letter of Credit (or the amendment of the terms and conditions, extension of the terms and conditions, extension of the expiration date, or reinstatement of amounts paid, or renewal of an outstanding Letter of Credit), the Borrower shall deliver (or transmit by electronic communication, if arrangements for doing so have been approved by the respective Issuing Bank) to an Issuing Bank selected by it and to the Administrative Agent (at least three (3) Business Days in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, extended, reinstated or renewed, and specifying the date of issuance, amendment, extension, reinstatement or renewal (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with

 

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paragraph (d) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof, the purpose and nature of the requested Letter of Credit, whether such Letter of Credit is a Single Lender Letter of Credit, and such other information as shall be necessary to prepare, amend, extend, reinstate or renew such Letter of Credit. The Administrative Agent shall provide a copy of such notice to each Lender. If requested by the respective Issuing Bank, the Borrower also shall submit a letter of credit application and reimbursement agreement on such Issuing Bank’s standard form in connection with any request for a Letter of Credit. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application and reimbursement agreement or other agreement submitted by the Borrower to, or entered into by the Borrower with, an Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

(c) Limitations on Amounts, Issuance and Amendment. A Letter of Credit shall be issued, amended, extended, reinstated or renewed only if (and upon issuance, amendment, extension, reinstatement or renewal of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, extension, reinstatement or renewal (i) the aggregate amount of the outstanding Letters of Credit issued by any Issuing Bank shall not exceed its L/C Issuing Bank Sublimit, (ii) the aggregate L/C Obligations shall not exceed the L/C Sublimit, (iii) the Revolving Credit Exposure of any Revolving Lender shall not exceed its Revolving Loan Commitment and (iv) the total Revolving Credit Exposures shall not exceed the Total Revolving Loan Commitment.

An Issuing Bank shall not be under any obligation to issue any Letter of Credit if:

(i) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such Issuing Bank from issuing such Letter of Credit, or any Law applicable to such Issuing Bank shall prohibit, or request that such Issuing Bank refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such Issuing Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such Issuing Bank is not otherwise compensated hereunder) not in effect on the Restatement Date, or shall impose upon such Issuing Bank any unreimbursed loss, cost or expense that was not applicable on the Restatement Date and that such Issuing Bank in good faith deems material to it;

(ii) the issuance of such Letter of Credit would violate one or more policies of such Issuing Bank applicable to letters of credit generally;

(iii) except as otherwise agreed by the Administrative Agent and such Issuing Bank, such Letter of Credit is in an initial amount less than $500,000; or

(iv) any Revolving Lender is at that time a Defaulting Lender, unless (A) such Issuing Bank has entered into arrangements, including the delivery of Cash Collateral, satisfactory to such Issuing Bank (in its sole discretion) with the Borrower or such Revolving Lender to eliminate such Issuing Bank’s actual or potential Fronting Exposure (after giving effect to Section 2.20(a)(iv)) with respect to the Defaulting Lender arising from either such Letter of Credit then proposed to be issued or such Letter of Credit and all other L/C Obligations as to which such Issuing Bank has actual or potential Fronting Exposure, as it may elect in its sole discretion or (B) such Issuing Bank is satisfied that the related exposure and Defaulting Lender’s participation in L/C Obligations will be fully allocated to Revolving Lenders which are Non-Defaulting Lenders, and participating interests in any newly issued or increased Letter of Credit shall be allocated among Non-Defaulting Lenders in a manner consistent with Section 2.20(a)(iv) below (and such Defaulting Lender shall not participate therein) or (C) such Letter of Credit is a Single Lender Letter of Credit.

 

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An Issuing Bank shall be under no obligation to amend any Letter of Credit if (A) such Issuing Bank would have no obligation at such time to issue the Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of the Letter of Credit does not accept the proposed amendment to the Letter of Credit.

(d) Expiration Date. Each Letter of Credit shall have a stated expiration date no later than the earlier of (i) the date twelve months after the date of the issuance of such Letter of Credit (or, in the case of any extension of the expiration date thereof, twelve months after the then-current expiration date of such Letter of Credit) and (ii) the date that is five Business Days prior to the Maturity Date.

(e) Participations. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount or extending the expiration date thereof), and without any further action on the part of the applicable Issuing Bank or the Revolving Lenders, such Issuing Bank hereby grants to each Revolving Lender, and each Revolving Lender hereby acquires from such Issuing Bank, a participation in such Letter of Credit equal to such Revolving Lender’s Revolving Commitment Percentage of the aggregate amount available to be drawn under such Letter of Credit. Each Revolving Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute, unconditional and irrevocable and shall not be affected by any circumstance whatsoever, including any amendment, extension, reinstatement or renewal of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments.

In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely, unconditionally and irrevocably agrees to pay to the Administrative Agent, for account of the respective Issuing Bank, such Revolving Lender’s Revolving Commitment Percentage of each L/C Disbursement made by an Issuing Bank promptly upon the request of such Issuing Bank at any time from the time of such L/C Disbursement until such L/C Disbursement is reimbursed by the Borrower or at any time after any reimbursement payment is required to be refunded to the Borrower for any reason, including after the Maturity Date. Such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each such payment shall be made in the same manner as provided in Section 2.02 with respect to Loans made by such Revolving Lender (and Section 2.02 shall apply, mutatis mutandis, to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the respective Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to Section 2.03(f), the Administrative Agent shall distribute such payment to the respective Issuing Bank or, to the extent that the Revolving Lenders have made payments pursuant to this paragraph to reimburse such Issuing Bank, then to such Revolving Lenders and such Issuing Bank as their interests may appear. Any payment made by a Revolving Lender pursuant to this paragraph to reimburse an Issuing Bank for any L/C Disbursement shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such L/C Disbursement.

Each Revolving Lender further acknowledges and agrees that its participation in each Letter of Credit will be automatically adjusted to reflect such Revolving Lender’s Revolving Commitment Percentage of the aggregate amount available to be drawn under such Letter of Credit at each time such Lender’s Commitment is amended pursuant to the operation of Section 2.20 or 2.21, as a result of an assignment in accordance with Section 9.04 or otherwise pursuant to this Agreement.

 

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The provisions of this clause 2.07(e) shall not apply in relation to any Single Lender Letter of Credit.

(f) Reimbursement. If an Issuing Bank shall make any L/C Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such Issuing Bank in respect of such L/C Disbursement by paying to the Administrative Agent an amount equal to such L/C Disbursement not later than 12:00 noon, New York City time, on (i) the Business Day that the Borrower receives notice of such L/C Disbursement, if such notice is received prior to 10:00 a.m., New York City time, or (ii) the Business Day immediately following the day that the Borrower receives such notice, if such notice is not received prior to such time. Other than where the Letter of Credit is a Single Lender Letter of Credit, if the Borrower fails to make such payment when due, the Administrative Agent shall notify each Lender of the applicable L/C Disbursement, the payment then due from the Borrower in respect thereof and such Lender’s Revolving Commitment Percentage thereof.

(g) Obligations Absolute. The Borrower’s obligation to reimburse L/C Disbursements as provided in paragraph (f) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of this Agreement or any Letter of Credit, or any term or provision herein or therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement in such draft or other document being untrue or inaccurate in any respect, (iii) payment by the respective Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply strictly with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder.

None of the Administrative Agent, the Lenders, any Issuing Bank, or any of their Related Parties shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit by the respective Issuing Bank or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms, any error in translation or any consequence arising from causes beyond the control of the respective Issuing Bank; provided that the foregoing shall not be construed to excuse an Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by Applicable Law) suffered by the Borrower that are caused by such Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of an Issuing Bank (as finally determined by a court of competent jurisdiction), an Issuing Bank shall be deemed to have exercised care in each such determination, and that:

(i) an Issuing Bank may replace a purportedly lost, stolen, or destroyed original Letter of Credit or missing amendment thereto with a replacement marked as such or waive a requirement for its presentation;

 

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(ii) an Issuing Bank may accept documents that appear on their face to be in substantial compliance with the terms of a Letter of Credit without responsibility for further investigation, regardless of any notice or information to the contrary, and may make payment upon presentation of documents that appear on their face to be in substantial compliance with the terms of such Letter of Credit and without regard to any non-documentary condition in such Letter of Credit;

(iii) an Issuing Bank shall have the right, in its sole discretion, to decline to accept such documents and to make such payment if such documents are not in strict compliance with the terms of such Letter of Credit; and

(iv) this sentence shall establish the standard of care to be exercised by an Issuing Bank when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof (and the parties hereto hereby waive, to the extent permitted by Applicable Law, any standard of care inconsistent with the foregoing).

Without limiting the foregoing, none of the Administrative Agent, the Lenders, any Issuing Bank, or any of their Related Parties shall have any liability or responsibility by reason of (i) any presentation that includes forged or fraudulent documents or that is otherwise affected by the fraudulent, bad faith, or illegal conduct of the beneficiary or other Person, (ii) an Issuing Bank declining to take-up documents and make payment (A) against documents that are fraudulent, forged, or for other reasons by which that it is entitled not to honor or (B) following a Borrower’s waiver of discrepancies with respect to such documents or request for honor of such documents or (iii) an Issuing Bank retaining proceeds of a Letter of Credit based on an apparently applicable attachment order, blocking regulation, or third-party claim notified to such Issuing Bank.

Unless otherwise expressly agreed by an Issuing Bank and the Borrower when a Letter of Credit is issued by it, the rules of the ISP shall apply to each Letter of Credit. Notwithstanding the foregoing, no Issuing Bank shall be responsible to the Borrower for, and such Issuing Bank’s rights and remedies against the Borrower shall not be impaired by, any action or inaction of such Issuing Bank required or permitted under any law, order, or practice that is required or permitted to be applied to any Letter of Credit or this Agreement, including the Laws or any order of a jurisdiction where such Issuing Bank or the beneficiary is located, the practice stated in the ISP or in the decisions, opinions, practice statements, or official commentary of the International Chamber of Commerce Banking Commission, the Bankers Association for Finance and Trade (BAFT), or the Institute of International Banking Law & Practice, whether or not any Letter of Credit chooses such laws or practice rules.

An Issuing Bank shall act on behalf of the Revolving Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and such Issuing Bank shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article VIII with respect to any acts taken or omissions suffered by such Issuing Bank in connection with Letters of Credit issued by it or proposed to be issued by it and L/C Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article VIII included such Issuing Bank with respect to such acts or omissions, and (B) as additionally provided herein with respect to the such Issuing Bank.

 

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(h) Disbursement Procedures. The Issuing Bank for any Letter of Credit shall, within the time allowed by applicable Laws or the specific terms of the Letter of Credit following its receipt thereof, examine all documents purporting to represent a demand for payment under such Letter of Credit. Such Issuing Bank shall promptly after such examination notify the Administrative Agent and the Borrower in writing of such demand for payment if such Issuing Bank has made or will make an L/C Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse such Issuing Bank and the Revolving Lenders with respect to any such L/C Disbursement.

(i) Interim Interest. If the Issuing Bank for any Letter of Credit shall make any L/C Disbursement, then, unless the Borrower shall reimburse such L/C Disbursement in full on the date such L/C Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such L/C Disbursement is made to but excluding the date that the Borrower reimburses such L/C Disbursement, at the Default Rate applicable to the Revolving Loans. Interest accrued pursuant to this paragraph shall be for account of such Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (f) of this Section to reimburse such Issuing Bank shall be for account of such Revolving Lender to the extent of such payment.

(j) Replacement of an Issuing Bank. Any Issuing Bank may be replaced at any time by written agreement between the Borrower, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent shall notify the Revolving Lenders of any such replacement of an Issuing Bank. At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank. From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit to be issued by it thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to include such successor or any previous Issuing Bank, or such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.

Any Issuing Bank may resign at any time by giving 30 days’ prior notice to the Administrative Agent, the Revolving Lenders and the Borrower. After the resignation of an Issuing Bank hereunder, the retiring Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement and the other Loan Documents with respect to Letters of Credit issued by it prior to such resignation, but shall not be required to issue additional Letters of Credit or to extend, reinstate, renew or increase any existing Letter of Credit.

(k) Cash Collateralization. If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Revolving Lenders (or, if the maturity of the Loans has been accelerated, Revolving Lenders with L/C Obligations representing at least 66-2/3% of the total L/C Obligations) demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall immediately deposit into an account established and maintained on the books and records of the Administrative Agent (the “L/C Collateral Account”) an amount in cash equal to 102% of the total L/C Obligations as of such date plus any accrued and unpaid interest thereon, provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in clause (g) or (h) of Section 7.01. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. In addition, and without limiting the foregoing or paragraph (d) of this Section, if any L/C Obligations remain outstanding after the expiration date specified in said paragraph (d), the Borrower shall immediately deposit into the L/C Collateral Account an amount in cash equal to 102% of such L/C Obligations as of such date plus any accrued and unpaid interest thereon.

 

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The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over the L/C Collateral Account. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in the L/C Collateral Account. Moneys in the L/C Collateral Account shall be applied by Administrative Agent to reimburse each Issuing Bank for L/C Disbursements for which it has not been reimbursed, together with related fees, costs, and customary processing charges, and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the L/C Obligations at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Revolving Lenders with L/C Obligations representing 66-2/3% of the total L/C Obligations), be applied to satisfy other obligations of the Borrower under this Agreement. If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within five Business Days after all Events of Default have been cured or waived.

(l) Letters of Credit Issued for account of Subsidiaries. Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary, the Borrower shall be obligated to reimburse the applicable Issuing Bank hereunder for any and all drawings under such Letter of Credit. The Borrower hereby acknowledges that the issuance of Letters of Credit for the account of Subsidiaries inures to the benefit of the Borrower, and that the Borrower’s business derives substantial benefits from the businesses of such Subsidiaries.

SECTION 2.08 Interest.

(a) Interest Rates. Subject to paragraphs (b) and (e) of this Section, each Loan shall bear interest at a rate per annum equal to the LIBO Rate for the Interest Period therefor plus the Margin.

(b) Default Interest. If any amount payable by any Obligor under this Agreement or any other Loan Document (including principal of any Loan, interest, fees and other amount) is not paid when due, whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a rate per annum equal to the applicable Default Rate. Upon the request of the Required Lenders, while any Event of Default exists, the Borrower shall pay interest on the principal amount of all Loans outstanding hereunder at a rate per annum equal to the applicable Default Rate.

(c) Payment Dates. Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein; provided that (i) interest accrued pursuant to paragraph (b) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any LIBO Rate Borrowing prior to the end of the Interest Period therefor, accrued interest on such Borrowing shall be payable on the effective date of such conversion.

(d) Interest Computation. All interest hereunder shall be computed on the basis of a year of 360 days, and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

 

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(e) Market Disruption. If in respect of any Interest Period (i) at or about 12:00 noon, London time, two Business Days prior to the commencement of such Interest Period the Screen Rate is not available, and there is no Reference Bank Rate, or (ii) before close of business in London on the Business Day prior to the commencement of such Interest Period, the Administrative Agent receives notifications from a Lender or Lenders (whose participations in the Loans exceed 35%) of the aggregate outstanding amount of all the Advances under the applicable Senior Secured Facility) that the cost to it or them of obtaining matching deposits in the interbank market would be in excess of LIBOR, then (in each case) the rate of interest on the relevant Lender’s share of that Loan for the Interest Period shall be the rate per annum which is the sum of: (x) the rate notified to the Administrative Agent by the relevant Lender(s) as soon as practicable and in any event by close of business on the first day of such Interest Period, to be that which expresses as a percentage rate per annum the cost to the relevant Lender(s) of funding its or their participation in the Loans; and (y) the Margin.

(f) Modification and/or discontinuation of certain benchmarks. Without prejudice to any other provisions of this Agreement (including in particular this Section 2.08 and Section 9.02(b) (Amendments, Etc.), each Party acknowledges and agrees for the benefit of each other Party that:

(i) IBOR benchmarks (i) may be subject to methodological or other changes which could affect their value, or (ii) may not comply with applicable laws and regulations (including Regulation (EU) 2016/1011 of the European Parliament and of the Council, as amended (EU Benchmarks Regulation)) and/or (iii) may be permanently discontinued; and

(ii) the occurrence of any of the aforementioned events set out in (f)(i) above and/or events set out in Section 2.16 (Inability to Determine Rates) may have adverse consequences which may materially impact the economics of the financing transaction contemplated under this Agreement.

SECTION 2.09 Fees.

(a) Fee Letters. Fees (other than the Commitment Fee) shall be paid by the Borrower in the amount, in the manner and at the times agreed in the Fee Letters.

(b) Term Loan Commitment Fee. The Borrower agrees to pay to the Administrative Agent for the account of each Term Lender a commitment fee on the daily average unused amount of the Term Loan Commitment of such Term Lender, for each day during the period from the Closing Date until the Term Loan Availability Termination Date, at a rate equal to 0.25% per annum (or, during any period where less than 50% of the aggregate Term Loan Commitments have been utilized, 0.50% per annum), accrued commitment fees to be payable on each Borrowing Date in respect of the Term Loan and upon any termination or expiry of the applicable Term Loan Commitments.

(c) Revolving Loan Commitment Fee. The Borrower agrees to pay to the Administrative Agent for the account of each Revolving Lender a commitment fee on the daily average unused amount of the Revolving Loan Commitment of such Revolving Lender, for each day during the period from the Closing Date until the Maturity Date, at a rate equal to 0.25% per annum (or, during any period where less than 50% of the aggregate Revolving Loan Commitments have been utilized, 0.50% per annum), accrued commitment fees to be payable on each Borrowing Date in respect of the Revolving Loan and upon any termination or expiry of the applicable Revolving Loan Commitments.

(d) L/C Fees. The Borrower agrees to pay to the Administrative Agent for the account of each Lender a Letter of Credit fee with respect to its participations in each outstanding Letter of Credit (the “L/C Fee”) on the daily maximum amount then available to be drawn under such Letter of Credit, which shall accrue at a rate per annum equal to 2% per annum during the period from and including the Closing Date to but excluding the later of the Maturity Date and the date on which such Lender ceases to have any L/C Obligations. Accrued L/C Fees shall be payable in arrears on each Payment Date, commencing on the first such date to occur after the Closing Date, and on the Maturity Date; provided that any such fees accruing after the Maturity Date shall be payable on demand.

 

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(e) L/C Fronting Fees. The Borrower agrees to pay to each Issuing Bank for its own account a fronting fee (the “L/C Fronting Fee”) with respect to each Letter of Credit issued by such Issuing Bank at a rate per annum equal to the percentage separately agreed upon between the Borrower and such Issuing Bank on the daily maximum amount then available to be drawn under such Letter of Credit, during the period from and including the Closing Date to but excluding the later of the Maturity Date and the date on which such Issuing Bank ceases to have any L/C Obligations. Accrued L/C Fronting Fee shall be payable in arrears on each Payment Date, commencing on the first such date to occur after the Closing Date, and on the Maturity Date; provided that any such fees accruing after the Maturity Date shall be payable on demand. In addition, the Borrower agrees to pay to each Issuing Bank for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of such Issuing Bank relating to letters of credit as from time to time in effect, which fees, costs and charges shall be payable to such Issuing Bank within three Business Days after its demand therefor and are nonrefundable.

(f) Fee Computation. All fees payable under this Section shall be computed on the basis of a year of 360 days and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). Each determination by the Administrative Agent of a fee hereunder shall be conclusive absent manifest error.

SECTION 2.10 Evidence of Debt. Each Lender shall maintain in accordance with its usual practice records evidencing the indebtedness of the Borrower to such Lender resulting from each Credit Extension made by such Lender. The Administrative Agent shall maintain the Register in accordance with Section 9.04(c). The entries made in the records maintained pursuant to this paragraph (a) shall be prima facie evidence absent manifest error of the existence and amounts of the obligations recorded therein. Any failure of any Lender or the Administrative Agent to maintain such records or make any entry therein or any error therein shall not in any manner affect the obligations of the Borrower under this Agreement and the other Loan Documents. In the event of any conflict between the records maintained by any Lender and the records maintained by the Administrative Agent in such matters, the records of the Administrative Agent shall control in the absence of manifest error.

SECTION 2.11 Payments Generally; Several Obligations of Lenders.

(a) Payments by Borrower. All payments to be made by the Borrower hereunder and the other Loan Documents shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all such payments shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in immediately available funds not later than 2:00pm (New York City time) on the date specified herein. All amounts received by the Administrative Agent after such time on any date shall be deemed to have been received on the next succeeding Business Day and any applicable interest or fees shall continue to accrue. The Administrative Agent will apply such amounts in accordance with the Intercreditor Agreement.

(b) Application of Insufficient Payments. Subject to Section 4.02 of the Intercreditor Agreement, if at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed L/C Disbursements, interest, fees and other amounts then due hereunder, such funds shall be applied (i) first, to pay interest, fees and other amounts then due

 

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hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest, fees and other amounts then due to such parties, and (ii) second, to pay principal and unreimbursed L/C Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal or unreimbursed L/C Disbursements, as applicable, then due to such parties.

(c) Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Banks hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Banks, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the Issuing Banks, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

(d) Several Obligations of Lenders. The obligations of the Lenders hereunder to make Loans, to fund participations in Letters of Credit and to make payments pursuant to Section 9.03(c) are several and not joint. The failure of any Lender to make any Loan or to fund any such participation or to make any such payment on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participations or to make its payment under Section 9.03(c).

SECTION 2.12 Sharing of Payments. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Revolving Loans or participations in L/C Disbursements or other obligations hereunder resulting in such Lender receiving payment of a proportion of the aggregate amount of its Revolving Loans or participations in L/C Disbursements and accrued interest thereon or other such obligations greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Revolving Loans and participations in L/C Disbursements and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and participations in L/C Disbursements and other amounts owing them; provided that:

(i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

(ii) the provisions of this paragraph shall not be construed to apply to (x) any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (y) the application of Cash Collateral provided for in Section 2.19, or (z) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in L/C Disbursements to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this paragraph shall apply).

 

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The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under Applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

SECTION 2.13 Compensation for Losses. In the event of (a) the payment of any principal other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Revolving Loan into a Term Loan other than on the last day of the Interest Period applicable thereto, (c) the failure for any reason to borrow, convert, continue or prepay any amount of any Loan on the date specified in any notice delivered pursuant hereto, or (d) the assignment of any Loan or part of a Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.18(b), then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. Such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest (as reasonably determined by such Lender) that would have accrued on the principal amount of such Loan had such event not occurred, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest that would accrue on such principal amount for such period at the interest rate that such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the London interbank eurodollar market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

SECTION 2.14 Increased Costs.

(a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender or any Issuing Bank;

(ii) impose on any Lender or any Issuing Bank or the London interbank market any other condition, cost or expense (other than Indemnified Taxes, Other Taxes and Excluded Taxes) affecting this Agreement or Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, converting to, continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Lender, such Issuing Bank or such other Recipient of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender, Issuing Bank or other Recipient hereunder (whether of principal, interest or any other amount) then, upon request of such Lender, Issuing Bank or other Recipient, the Borrower will pay to such Lender, Issuing Bank or other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, Issuing Bank or other Recipient, as the case may be, for such additional costs incurred or reduction suffered.

 

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(b) Capital Requirements. If any Lender or Issuing Bank determines that any Change in Law affecting such Lender or Issuing Bank or any lending office of such Lender or such Lender’s or Issuing Bank’s holding company, if any, regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on such Lender’s or Issuing Bank’s capital or on the capital of such Lender’s or Issuing Bank’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by any Issuing Bank, to a level below that which such Lender or Issuing Bank or such Lender’s or Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or Issuing Bank’s policies and the policies of such Lender’s or Issuing Bank’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or Issuing Bank or such Lender’s or Issuing Bank’s holding company for any such reduction suffered.

(c) Certificates for Reimbursement. A certificate of a Lender or Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section and delivered to the Borrower, shall be conclusive absent manifest error. The Borrower shall pay such Lender or Issuing Bank, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.

(d) Delay in Requests. Failure or delay on the part of any Lender or Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or Issuing Bank’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender or Issuing Bank pursuant to this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions, and of such Lender’s or Issuing Bank’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

SECTION 2.15 Taxes.

(a) Defined Terms. For purposes of this Section, the term “Lender” includes any Issuing Bank and the term “Applicable Law” includes FATCA.

(b) Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrower under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by Applicable Law. If any Applicable Law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with Applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

 

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(c) Payment of Other Taxes by Borrower. The Borrower shall timely pay to the relevant Governmental Authority in accordance with Applicable Law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.

(d) Indemnification by Borrower. The Borrower shall indemnify each Recipient, within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(e) Evidence of Payments. As soon as practicable after any payment of Taxes by the Borrower to a Governmental Authority pursuant to this Section, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(f) Status of Lenders. Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall to the extent legally able to do so, use reasonable efforts to deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. Notwithstanding anything to the contrary in the preceding sentence, (i) nothing herein shall obligate any Lender to disclose any confidential information in connection therewith and (ii) the completion, execution and submission of such documentation shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

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

SECTION 2.16 Benchmark Replacement Setting.

(a) Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Loan Document (and any Hedging Agreement shall be deemed not to be a “Loan Document” for purposes of this Section titled “Benchmark Replacement Setting”), if a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (1) or (2) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (3) of the definition of “Benchmark Replacement”

 

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for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders.

If (i) a Benchmark Replacement Date has occurred and the applicable Benchmark Replacement on such Benchmark Replacement Date is a Benchmark Replacement other than the sum of: (a) Term SOFR and (b) the related Benchmark Replacement Adjustment, (ii) subsequently, the Relevant Governmental Body recommends for use a forward-looking term rate based on SOFR and the Borrower requests that the Administrative Agent review the administrative feasibility of such recommended forward-looking term rate for purposes of this Agreement and (iii) following such request from the Borrower, the Administrative Agent determines (in its sole discretion) that such forward looking term rate is administratively feasible for the Administrative Agent, then the Administrative Agent may (in its sole discretion) provide the Borrower and Lenders with written notice that from and after a date identified in such notice: (i) a Benchmark Replacement Date shall be deemed to have occurred, the Benchmark Replacement on such Benchmark Replacement Date shall be deemed to be a Benchmark Replacement determined in accordance with clause (1) of the definition of “Benchmark Replacement” under this Section titled “Benchmark Replacement Setting”; provided, however, that if upon such Benchmark Replacement Date the Benchmark Replacement Adjustment is unable to be determined in accordance with clause (1) of the definition of “Benchmark Replacement” and the corresponding definition of “Benchmark Replacement Adjustment”, then the Benchmark Replacement Adjustment in effect immediately prior to such new Benchmark Replacement Date shall be utilized for purposes of this Benchmark Replacement (for avoidance of doubt, for purposes of this proviso, such Benchmark Replacement Adjustment shall be the Benchmark Replacement Adjustment which was established in accordance with the definition of “Benchmark Replacement Adjustment” on the date determined in accordance with clauses (1) or (2), as applicable, of the definition of “Benchmark Replacement Date” hereunder) and (ii) such forward looking term rate shall be deemed to be the forward looking term rate referenced in the definition of “Term SOFR” for all purposes hereunder or under any Loan Document in respect of any Benchmark setting and any subsequent Benchmark settings, without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document. For the avoidance of doubt, if the circumstances described in the immediately preceding sentence shall occur, all applicable provisions set forth in this Section titled “Benchmark Replacement Setting” shall apply with respect to such election of the Administrative Agent as completely as if such forward-looking term rate was initially determined in accordance with clause (1) of the definition of “Benchmark Replacement”, including, without limitation, the provisions set forth in clauses (b) and (f) of this Section titled “Benchmark Replacement Setting.”.

(b) Benchmark Replacement Conforming Changes. In connection with the implementation of a Benchmark Replacement, the Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.

 

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(c) Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Borrower and the Lenders of (i) any Benchmark Replacement Date and the related Benchmark Replacement, (ii) the effectiveness of any Benchmark Replacement Conforming Changes, and (iii) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (d) below. For the avoidance of doubt, any notice required to be delivered by the Administrative Agent as set forth in this Section titled “Benchmark Replacement Setting” may be provided, at the option of the Administrative Agent (in its sole discretion), in one or more notices and may be delivered together with, or as part of any amendment which implements any Benchmark Replacement or Benchmark Conforming Changes. Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section titled “Benchmark Replacement Setting,” including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section titled “Benchmark Replacement Setting.”.

(d) Unavailability of Tenor of Benchmark. Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including Term SOFR or USD LIBOR) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is or will be no longer representative, then the Administrative Agent may modify the definition of “Interest Period” for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition of “Interest Period” for all Benchmark settings at or after such time to reinstate such previously removed tenor.

(e) Disclaimer. The Administrative Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to (i) the administration, submission or any other matter related to the London interbank offered rate or with respect to any alternative or successor rate thereto, or replacement rate thereof (including, without limitation any Benchmark Replacement implemented hereunder), (ii) the composition or characteristics of any such Benchmark Replacement, including whether it is similar to, or produces the same value or economic equivalence to USD LIBOR (or any other Benchmark) or have the same volume or liquidity as did USD LIBOR (or any other Benchmark), (iii) any actions or use of its discretion or other decisions or determinations made with respect to any matters covered by this Section titled “Benchmark Replacement Setting” including, without limitation, whether or not a Benchmark Transition Event has occurred, the removal or lack thereof of unavailable or non-representative tenors, the implementation or lack thereof of any Benchmark Replacement Conforming Changes, the delivery or non-delivery of any notices required by clause (c) above or otherwise in accordance herewith, and (iv) the effect of any of the foregoing provisions of this Section titled “Benchmark Replacement Setting.”.

(f) Certain Defined Terms.

As used in this Section titled “Benchmark Replacement Setting”:

 

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Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, any tenor for such Benchmark or payment period for interest calculated with reference to such Benchmark, as applicable, that is or may be used for determining the length of an Interest Period pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to clause (d) of this Section titled “Benchmark Replacement Setting.”.

Benchmark” means, initially, USD LIBOR; provided that if a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred with respect to USD LIBOR or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause (a) of this Section titled “Benchmark Replacement Setting.”.

Benchmark Replacement” means, for any Available Tenor, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date:

 

  (1)

the sum of: (a) Term SOFR and (b) the related Benchmark Replacement Adjustment;

 

  (2)

the sum of: (a) Daily Simple SOFR and (b) the related Benchmark Replacement Adjustment;

 

  (3)

the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for U.S. dollar-denominated syndicated credit facilities at such time and (b) the related Benchmark Replacement Adjustment; provided that, in the case of clause (1), such Unadjusted Benchmark Replacement is displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion.

If the Benchmark Replacement as determined pursuant to clause (1), (2) or (3) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.

Benchmark Replacement Adjustment” means, with respect to any replacement of the then current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement:

 

  (1)

for purposes of clauses (1) and (2) of the definition of “Benchmark Replacement,” the first alternative set forth in the order below that can be determined by the Administrative Agent: (a) the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Interest Period that has been selected or recommended by the Relevant Governmental Body for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for the applicable Corresponding Tenor; (b) the spread adjustment (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Interest Period that would apply to the fallback rate for a derivative transaction referencing the ISDA Definitions to be effective upon an index cessation event with respect to such Benchmark for the applicable Corresponding Tenor; and

 

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(2)

for purposes of clause (3) of the definition of “Benchmark Replacement,” the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date or (ii) any evolving or then prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar denominated syndicated credit facilities; provided that, in the case of clause (1) above, such adjustment is displayed on a screen or other information service that publishes such Benchmark Replacement Adjustment from time to time as selected by the Administrative Agent in its reasonable discretion.

Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, the formula for calculating any successor rates identified pursuant to the definition of “Benchmark Replacement”, the formula, methodology or convention for applying the successor Floor to the successor Benchmark Replacement and other technical, administrative or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

Benchmark Replacement Date” means the earliest to occur of the following events with respect to the then current Benchmark:

 

  (1)

in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof);

 

  (2)

in the case of clause (3) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein; or

 

  (3)

in the case of an Early Opt-in Election, the sixth (6th) Business Day after the date notice of such Early Opt-in Election is provided to the Lenders, so long as the Administrative Agent has not received, by 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Early Opt-in Election is provided to the Lenders, written notice of objection to such Early Opt-in Election from Lenders comprising the Required Lenders.

 

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For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark:

 

  (1)

a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);

 

  (2)

a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or

 

  (3)

a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer representative.

For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).

Corresponding Tenor” with respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.

Daily Simple SOFR” means, for any day, SOFR, with the conventions for this rate (which will include a lookback) being established by the Administrative Agent in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for syndicated business loans; provided, that if the Administrative Agent decides that any such convention is not administratively feasible for the Administrative Agent, then the Administrative Agent may establish another convention in its reasonable discretion.

 

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Early Opt-in Election” means, if the then-current Benchmark is USD LIBOR, the occurrence of the following:

 

  (1)

a notification by the Administrative Agent to (or the request by the Borrower to the Administrative Agent to notify) each of the other parties hereto that at least five currently outstanding U.S. dollar denominated syndicated credit facilities in the U.S. syndicated loan market at such time contain (as a result of amendment or as originally executed) a SOFR-based rate (including SOFR, a term SOFR or any other rate based upon SOFR) as a benchmark rate (and such syndicated credit facilities are identified in such notice and are publicly available for review), and

 

  (2)

the joint election by the Administrative Agent and the Borrower to trigger a fallback from USD LIBOR and the provision by the Administrative Agent of written notice of such election to the Lenders.

Floor” means the benchmark rate floor of zero..

ISDA Definitions” means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time by the International Swaps and Derivatives Association, Inc. or such successor thereto.

Reference Time” with respect to any setting of the then-current Benchmark means (1) if such Benchmark is USD LIBOR, 11:00 a.m. (London time) on the day that is two London banking days preceding the date of such setting, and (2) if such Benchmark is not USD LIBOR, the time determined by the Administrative Agent in its reasonable discretion.

Relevant Governmental Body” means the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto.

SOFR” means, with respect to any Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day published by the SOFR Administrator on the SOFR Administrator’s Website on the immediately succeeding Business Day.

SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).

SOFR Administrator’s Website” means the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.

Term SOFR” means, for the applicable Corresponding Tenor as of the applicable Reference Time, the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.

 

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Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.

USD LIBOR” means the London interbank offered rate for U.S. dollars.

SECTION 2.17 [Reserved].

SECTION 2.18 Mitigation Obligations; Replacement of Lenders.

(a) Designation of a Different Lending Office. If any Lender (x) requests Borrower to repay its Loans in full pursuant to Section 2.06(b), (y) requests compensation under Section 2.14, or (z) requires the Borrower to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.15, then such Lender shall (at the request of the Borrower) use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate the illegality contemplated by Section 2.06(b) or eliminate or reduce amounts payable pursuant to Section 2.14 or 2.15, as the case may be, in the future, and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b) Replacement and Termination of Lenders. If (x) any Lender requests (A) Borrower to repay its Loans in full pursuant to Section 2.06(b) or (B) compensation under Section 2.14, or (y) the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.15 and, in each case, such Lender has declined or is unable to designate a different lending office in accordance with paragraph (a) of this Section, or if any Lender is a Defaulting Lender or a Non-Consenting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, (I) require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 9.04), all of its interests, rights (other than its existing rights to payments pursuant to Section 2.14 or Section 2.15) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment) or (II) prepay such Lender’s Loans in full and permanently reduce the Commitments by the amount of such payment; provided that:

(i) the Borrower shall have paid to the Administrative Agent the assignment fee (if any) specified in Section 9.04;

(ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in L/C Disbursements, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 2.13) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

(iii) in the case of any such assignment resulting from a claim for compensation under Section 2.14 or payments required to be made pursuant to Section 2.15, such assignment will result in a reduction in such compensation or payments thereafter;

 

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(iv) such assignment does not conflict with Applicable Law and such Lender shall have satisfied any know your customer requirements of such Lender in connection with such assignment as required by Applicable Law; and

(v) in the case of any assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

Notwithstanding anything in this Section to the contrary, (i) any Lender that acts as an Issuing Bank may not be replaced hereunder at any time it has any Letter of Credit outstanding hereunder unless arrangements satisfactory to such Lender (including the furnishing of a backstop standby letter of credit in form and substance, and issued by an issuer, reasonably satisfactory to such Issuing Bank or the depositing of cash collateral into a cash collateral account in amounts and pursuant to arrangements reasonably satisfactory to such Issuing Bank) have been made with respect to such outstanding Letter of Credit and (ii) in the event that a Lender acts as the Administrative Agent, such Lender may not be replaced hereunder except in accordance with the terms of Section 8.06.

SECTION 2.19 Cash Collateral.

(a) Obligation to Cash Collateralize. At any time that there shall exist a Defaulting Lender, within one Business Day following the written request of the Administrative Agent or any Issuing Bank (with a copy to the Administrative Agent), the Borrower shall Cash Collateralize the Issuing Banks’ Fronting Exposure with respect to such Defaulting Lender (determined after giving effect to Section 2.20(a)(iv) and any Cash Collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount.

(b) Grant of Security Interest. The Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to the Administrative Agent, for the benefit of the Issuing Banks, and agrees to maintain, a first priority security interest in all such Cash Collateral as security for the Defaulting Lender’s obligation to fund participations in respect of L/C Obligations, to be applied pursuant to clause (c) below. If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent and the Issuing Banks as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrower will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).

(c) Application. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under this Section or Section 2.20 in respect of Letters of Credit shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of L/C Obligations (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

 

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(d) Termination of Requirement. Cash Collateral (or the appropriate portion thereof) provided to reduce any Issuing Bank’s Fronting Exposure shall no longer be required to be held as Cash Collateral pursuant to this Section following (i) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the determination by the Administrative Agent and each Issuing Bank that there exists excess Cash Collateral; provided that, subject to Section 2.20 the Person providing Cash Collateral and each Issuing Bank may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations and provided further that to the extent that such Cash Collateral was provided by the Borrower, such Cash Collateral shall remain subject to the security interest granted pursuant to the Loan Documents.

SECTION 2.20 Defaulting Lenders.

(a) Defaulting Lender Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by Applicable Law:

(i) Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders and Section 9.02(b).

(ii) Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VII or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 9.08 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any Issuing Bank hereunder; third, to Cash Collateralize the Issuing Banks’ Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.19; fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize the Issuing Banks’ future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 2.19; sixth, to the payment of any amounts owing to the Lenders, the Issuing Banks as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the Issuing Banks against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or L/C Disbursements in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Disbursements owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Disbursements owed to, such Defaulting Lender until such time as all Loans and funded and

 

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unfunded participations in L/C Obligations are held by the Lenders pro rata in accordance with the Commitments without giving effect to clause (iv) below. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

(iii) Commitment and L/C Fees.

(A) No Defaulting Lender shall be entitled to receive any Commitment Fee for any period during which that Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

(B) Each Defaulting Lender shall be entitled to receive L/C Fees for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Applicable Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.19.

(C) With respect to any L/C Fee not required to be paid to any Defaulting Lender pursuant to clause (A) or (B) above, the Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in L/C Obligations that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to each Issuing Bank, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such Issuing Bank’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.

(iv) Reallocation of Participations to Reduce Fronting Exposure. All or any part of such Defaulting Lender’s participation in L/C Obligations shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable Percentages (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Commitment. Subject to Section 9.17, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

(v) Cash Collateral. If the reallocation described in clause (iv) above cannot, or can only partially, be effected, the Borrower shall, without prejudice to any right or remedy available to it hereunder or under law, Cash Collateralize the Issuing Banks’ Fronting Exposure in accordance with the procedures set forth in Section 2.19.

(b) Defaulting Lender Cure. If the Borrower, the Administrative Agent and each Issuing Bank agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause

 

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the Loans and funded and unfunded participations in Letters of Credit to be held pro rata by the Lenders in accordance with the Commitments (without giving effect to paragraph (a)(iv) above), whereupon, such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

(c) New Letters of Credit. So long as any Lender is a Defaulting Lender, no Issuing Bank shall be required to issue, extend, increase, reinstate or renew any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.

SECTION 2.21 Increases in Commitments.

(a) Request for Increase. The Borrower may, by notice to the Administrative Agent (who shall promptly notify the Lenders), request an increase in the Term Loan Commitments or Revolving Loan Commitments (each such increase, an “Incremental Commitment”); provided that any such request for an increase shall (i) be in a minimum amount $20,000,000 (or such lesser amount as may be approved by the Administrative Agent), (ii) not result in the aggregate amount of the Loan Secured Obligations and the Additional Secured Obligations referred to in the Intercreditor Agreement to exceed the maximum amount permitted thereunder; and (iii) with respect to any such Incremental Commitment consisting of a Revolving Loan Commitment, not result in the aggregate amount of (x) all Revolving Loan Commitments (accounting for such Incremental Commitment) and (y) all revolving credit facility commitments (howsoever defined) under any Additional Debt Document, to exceed an amount equal to forty per cent. (40%) of the total commitments at such time provided for under all Secured Debt Documents.

(b) Incremental Lenders. An Incremental Commitment may be provided by any existing Lender or other Person that is an Eligible Assignee and is not a Person of the type described in Section 9.04(b)(iv) (each such existing Lender or other Person that agrees to provide an Incremental Commitment, an “Incremental Lender”). Notwithstanding anything herein to the contrary, no Lender shall have any obligation to agree to increase its Commitment, or to provide a Commitment, pursuant to this Section and any election to do so shall be in the sole discretion of such Lender.

(c) Terms of Incremental Commitments. The Administrative Agent and the Borrower shall determine the effective date for such increase pursuant to this Section (an “Incremental Commitment Effective Date”) and, if applicable, the final allocation of such increase among the Persons providing such increase; provided that such date shall be a Business Day at least 10 Business Days after delivery of the request for such increase (unless otherwise approved by the Administrative Agent) and at least 30 days prior to the Maturity Date, provided further that the availability period for any Incremental Commitment consisting of a Revolving Loan Commitment shall end no later than the Maturity Date.

In order to effect such increase, the Borrower, the applicable Incremental Lender(s) and the Administrative Agent (but no other Lenders or Persons) shall enter into one or more Joinder Agreements, each in form and substance satisfactory to the Borrower and the Administrative Agent, pursuant to which the applicable Incremental Lender(s) will provide the Incremental Commitment(s).

Effective as of the applicable Incremental Commitment Effective Date, subject to the terms and conditions set forth in this Section, each Incremental Commitment shall be a Term Loan Commitment or Revolving Loan Commitment (and not a separate facility hereunder), each Incremental Lender providing such Incremental Commitment shall be, and have all the rights of, a Term Lender or a Revolving Lender, as applicable, for all purposes of this Agreement.

 

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(d) Conditions to Effectiveness. Notwithstanding the foregoing, the increase in the Commitments pursuant to this Section shall not be effective with respect to any Incremental Lender unless:

(i) no Default or Event of Default shall have occurred and be continuing on the Incremental Commitment Effective Date and after giving effect to such increase;

(ii) the representations and warranties contained in this Agreement are true and correct on and as of the Incremental Commitment Effective Date and after giving effect to such increase, as though made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date);

(iii) the Administrative Agent shall have received one or more Joinder Agreements contemplated above, providing for Incremental Commitments in the amount of such increase, and satisfied all know your customer requirements (including any know your customer requirements of the Security Trustee) in respect of such Incremental Lender; and

(iv) the Administrative Agent shall have received such legal opinions and other documents reasonably requested by the Administrative Agent in connection therewith.

As of such Incremental Commitment Effective Date, upon the Administrative Agent’s receipt of the documents required by this paragraph (d), the Administrative Agent shall record the information contained in the applicable Joinder Agreement(s) in the Register and give prompt notice of the increase in the Commitments to the Borrower and the Lenders (including each Incremental Lender).

ARTICLE III

REPRESENTATIONS AND WARRANTIES

To induce the other parties (excluding any other Obligors) to enter into this Agreement, the Borrower represents and warrants with respect to itself and each other Obligor to each other party hereto (excluding any other Obligors) that as of the Restatement Date, (other than in respect of the representation and warranty set forth is Section 3.13) each Borrowing Date and, in respect of the representations and warranties set forth in Sections 3.01, 3.02, 3.03, 3.04, 3.06, 3.07, 3.08, 3.09, 3.11, 3.12, 3.16, 3.17, 3.21, 3.22, 3.27, 3.29, 3.30. 3.32, 3.33, 3.34 and 3.35, on each Payment Date:

SECTION 3.01 Status. (a) Each Obligor is a corporation, duly incorporated and validly existing under the laws of the Republic of the Marshall Islands, or in relation to any applicable Vessel Owner, Singapore (or such other jurisdiction as may be acceptable to the Administrative Agent), and (b) each Obligor has the power to own its assets and carry on its business as it is being conducted.

SECTION 3.02 Powers and authority. Each Obligor has the power to enter into and perform, and has taken all necessary action to authorize the entry into and performance of, the Loan Documents to which it is or will be a party and the transactions contemplated by those Loan Documents.

SECTION 3.03 Legal validity. The obligations expressed to be assumed by each Obligor in each Loan Document to which it is a party are legal, valid, binding and enforceable obligations, except as such enforceability may be limited by any applicable bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally and to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

 

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SECTION 3.04 Non-conflict. The entry into and performance by each Obligor of, and the transactions contemplated by, the Loan Documents to which it is a party do not conflict in any material respect with: (a) any law or regulation applicable to it; (b) its constitutional documents; or (c) any document which is binding upon it or any of its assets that, in the case of this clause (c), would reasonably be expected to cause a Material Adverse Effect.

SECTION 3.05 No default. (a) No Default is continuing or will result from the execution of, or the performance of any transaction contemplated by, any Loan Document. (b) No other event is outstanding which constitutes a default under any document which is binding on any Obligor or any of its assets to an extent or in a manner which is reasonably likely to have a Material Adverse Effect.

SECTION 3.06 Authorizations. All authorizations required by each Obligor in connection with the entry into, performance, validity and enforceability of, and the transactions contemplated by, the Loan Documents have been obtained or effected (as appropriate) and are in full force and effect, or, in the case of the registration of any Mortgage in respect of a Collateral Vessel that is the subject of a Loan on a Borrowing Date, shall be promptly obtained or effected following such Borrowing Date and within the period prescribed by the Applicable Law.

SECTION 3.07 Financial statements . The audited consolidated financial statements of the Guarantor most recently delivered to the Administrative Agent (or, until delivery of the first audited financial statements, the Original Financial Statements) together with any other financial information of the Guarantor supplied to the Administrative Agent by the Borrower or the Guarantor: (a) have been prepared in accordance with GAAP, consistently applied; (b) have been audited in accordance with GAAP; and (c) fairly represent its financial condition (consolidated, if applicable) as at the date to which they were drawn up, except, in each case, as disclosed to the contrary in those financial statements or other information.

SECTION 3.08 No misleading information. (a) Any factual information provided in writing (“Written Factual Information”) by or on behalf of any Obligor in connection with the Loan Documents or any Collateral Vessel (other than forward looking information and information of a general economic or industry specific nature) was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated; (b) any financial projections contained in the Written Factual Information were prepared on the basis of recent historical information and on the basis of reasonable assumptions believed by such Obligor to be reasonable at the time made and reflect such Obligor’s judgment based on present circumstances of the most likely set of conditions and course of action for the projected period (it being recognized by the Administrative Agent that such projections are not to be viewed as facts and are subject to significant uncertainties and contingencies many of which are beyond the Obligors’ control, that no assurance can be made that any particular projection will be realized, that actual results may differ from projected results and that such differences may be material); and (c) to the best of the knowledge and belief of the Obligors, nothing has occurred and no information has been given or withheld that results in the information contained in the Written Factual Information, taken as a whole, being untrue or misleading in any material respect.

SECTION 3.09 No Material Adverse Effect. There has been no Material Adverse Effect since the date of the Original Financial Statements.

 

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SECTION 3.10 Litigation. No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency (including, but not limited to, investigative proceedings) which, if adversely determined, might reasonably be expected to have a Material Adverse Effect have (to the best of its knowledge and belief) been started or threatened against any Obligor.

SECTION 3.11 Pari passu ranking. Each Obligor’s payment obligations under the Loan Documents rank at least pari passu with all its other present and future unsecured and unsubordinated payment obligations, except for obligations mandatorily preferred by law applying to companies generally.

SECTION 3.12 Taxes. Each Obligor has filed all Tax returns which are required to have been filed and has paid, or made adequate provisions for the payment of, all of its Taxes which are due and payable, except such Taxes, if any, as are being contested in good faith and by appropriate proceedings and as to which such reserves or other appropriate provisions as may be required by GAAP have been established, and except where failure to file such returns or pay such Taxes, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

SECTION 3.13 Taxes on payments. Assuming for these purposes that no Lender is based or conducting business in the Republic of the Marshall Islands or Hong Kong, all amounts payable by any Obligor to the Administrative Parties under the Loan Documents and the Related Contracts may be made without any deduction or withholding for any Taxes.

SECTION 3.14 Stamp duties. Except as notified in writing to by the Administrative Agent by any Obligor, no stamp or registration duty or similar Tax or charge is payable in its jurisdiction of incorporation in respect of any Loan Document or Related Contract.

SECTION 3.15 Environment. Except as may already have been disclosed by the Borrower in writing to the Administrative Agent: (a) each Vessel Owner and its Environmental Representatives have, without limitation, complied with the provisions of all applicable Environmental Laws in relation to each Collateral Vessel in all material respects; (b) each Vessel Owner and its Environmental Representatives have obtained all requisite Environmental Approvals in relation to each Collateral Vessel and are in compliance with such Environmental Approvals; (c) no Vessel Owner or any of their Environmental Representatives have received notice of any Environmental Liability in relation to a Collateral Vessel which alleges that a Vessel Owner is not in compliance in all material respects with applicable Environmental Laws in relation to such Collateral Vessel or Environmental Approvals in relation to such Collateral Vessel; (d) there is no Environmental Liability in relation to any Collateral Vessel pending or, to the knowledge of the Borrower, threatened which is such that a first class Vessel Owner or operator of vessels such as the Collateral Vessels, making all due enquiries and complying in all respects with its obligations under the ISM Code, ought to have known about; and (e) there has been no release of Hazardous Materials by or in respect of any Collateral Vessel about which a first class borrower or operator of vessels such as the Collateral Vessels making all due enquiries and complying in all respects with its obligations under the ISM Code ought to have known about.

SECTION 3.16 Security Interests. No Security Interest exists over any Obligors’ assets which would cause a breach of Section 6.01.

SECTION 3.17 Security Assets. Each Obligor is solely and absolutely entitled to the Security Assets over which it has or will create any Security Interest pursuant to the Security Documents to which it is, or will be, a party and there is no agreement or arrangement, under which it is obliged to share any proceeds of or derived from such Security Assets with any third party.

 

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SECTION 3.18 Collateral Vessel. (a) Each Collateral Vessel is operational, seaworthy and fit for service and is registered in the name of the applicable Vessel Owner at the relevant registry in the Approved Flag State; and (b) except as approved by the Administrative Agent (acting on the instructions of the Required Lenders), there are no arrangements under which Earnings of any Collateral Vessel may be shared with anyone else.

SECTION 3.19 ISM Code and ISPS Code compliance. In respect of each Collateral Vessel, the relevant Vessel Owner is in compliance with the ISM Code and ISPS Code in respect of that Collateral Vessel in all material respects.

SECTION 3.20 No amendments to Related Contracts. Other than as notified to and agreed by the Administrative Agent in writing, there have been no material amendments to any of the Obligatory Insurance or Management Agreements, and the copies of the Eligible Charters and Charter Guarantees provided to the Administrative Agent prior to the Closing Date are correct and complete (and there have been no material amendments thereto) as of the Closing Date.

SECTION 3.21 Money Laundering. Neither any Borrowings hereunder nor the performance of any of the Obligors’ respective obligations under the Loan Documents or Related Contracts will involve any breach by the Obligors or any of their respective Subsidiaries of any money laundering statutes of any jurisdictions where the Obligors or any of their respective Subsidiaries conduct business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental or regulatory agency (collectively, the “Anti-Money Laundering Laws”).

SECTION 3.22 Anti-Corruption and Sanctions. (a) Each Obligor is conducting and will continue to conduct its business in compliance with Anti-Money Laundering Laws and Anti-Corruption Laws; (b) each Obligor has implemented, maintained, and will continue to maintain in effect policies and procedures to ensure its compliance and the compliance by its directors, officers, employees, and agents, with Anti-Money Laundering Laws and Anti-Corruption Laws; (c) none of the Obligors or any of their subsidiaries is, or, to the knowledge of the Obligors, is owned or controlled by, a Sanctioned Person, or located, organized, or resident in a Sanctioned Jurisdiction; (d) no proceeds of the Program Debt will be made available, directly or indirectly, to or for the benefit of, or used to fund any activities with or business of a Sanctioned Person, or in any country territory that, at the time of such funding, is the subject of Sanctions, or otherwise applied in a manner or for a purpose prohibited by Sanctions or Anti-Corruption Laws, or which would result in a violation of Sanctions by any person (including any person participating in the Program Debt, whether as underwriter, advisor, investor, lender, hedge provider, facility or security agent or otherwise); (e) each Obligor and each of their Subsidiaries is in compliance with all Sanctions, is not, to the best of its knowledge and belief, under investigation for an alleged violation of Sanctions, and shall implement a policy for Sanctions in line with the requirements of this Agreement; (f) each Obligor and each of their Subsidiaries shall not fund all or part of any repayment required to be made pursuant to Program Debt out of proceeds directly or indirectly derived from any business, activities or transactions which would be prohibited by Sanctions or which would otherwise cause any person or a Finance Party to be in breach of Sanctions or to otherwise become the subject or target of Sanctions; and (g) each Obligor and each of their Subsidiaries shall not (and shall procure that no Charterer of any Collateral Vessel will) operate, possess, use, dispose of or otherwise deal with, or procure or allow the ownership, operation, possession, use, disposal of or any other dealing with, each Collateral Vessel or part thereof for any purpose or to any person which would violate or cause any Finance Party to violate, when and as applicable, any Sanctions, any anti-terrorism law or any anti-corruption law in each case applicable to it.

 

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SECTION 3.23 Compliance with laws. To the best of the Borrower’s knowledge and belief, each Obligor is in compliance in all material respects with all laws and regulations applicable to it, including Anti-Corruption Laws and Anti-Money Laundering Laws and is not under investigation for an alleged violation thereof.

SECTION 3.24 Investments Company Act. No Obligor is required to register as an “investment company,” as defined in the United States Investment Company Act of 1940, as amended without reliance on Section 3(c)(1) and/or Section 3(c)(7) of the Investment Company Act. No Obligor is a “covered fund” for purposes of the regulations adopted to implement Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (commonly referred to as the “Volcker Rule”). In making this determination, the Borrower has made this determination on the basis that no Obligor falls within the definition of “investment company” in Section 3(a)(1) of the Investment Company Act, although other bases or exceptions may be available.

SECTION 3.25 Regulation U. No Obligor is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Federal Reserve Board). No proceeds of the Program Debt will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock.

SECTION 3.26 Insolvency. (a) No Obligor is unable, nor admits or has admitted its inability, to pay its debts as such debts become due or has suspended making payments on any of its debts; (b) no Obligor, by reason of actual or anticipated financial difficulties neither has commenced, nor intends to commence, negotiations with one or more of its creditors with a view to rescheduling any of its Indebtedness; (c) the value of the assets of the Borrower is not less than its liabilities (taking into account contingent and prospective liabilities); (d) no moratorium has been, or may, in the reasonably foreseeable future be, declared in respect of any Obligors’ Indebtedness; and (e) no reorganization or liquidation of any Obligor has occurred.

SECTION 3.27 Immunity. (a) The execution by each Obligor of each Loan Document to which it is a party constitutes, and the exercise by it of its rights and performance of its obligations under each such Loan Document will constitute, private and commercial acts performed for private and commercial purposes; and (b) no Obligor will be entitled to claim immunity from suit, execution, attachment or other legal process in any proceedings taken in its jurisdiction of incorporation in relation to any Loan Document.

SECTION 3.28 [Reserved].

SECTION 3.29 Jurisdiction and governing law. (a) Each of the following are legal, valid and binding under the Laws of each Obligor’s jurisdiction of incorporation: (i) its irrevocable submission under this Agreement to the jurisdiction of the courts of the State of New York sitting in New York County, and of the United States District Court of the Southern District of New York, and any appellate court from any thereof; (ii) its agreement that this Agreement is governed by the law of the State of New York; and (iii) its agreement not to claim any immunity to which it or its assets may be entitled; (b) Any judgment obtained in the State of New York will be recognized and be enforceable by the courts of each Obligor’s jurisdiction of incorporation, subject to any statutory or other conditions of such jurisdiction.

SECTION 3.30 Accounts. Except for the Charged Accounts, no Obligor (other than the Guarantor) has opened or instructed any other Person to open, any accounts.

 

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SECTION 3.31 Charters. On each Borrowing Date, any Eligible Charter relating to a Collateral Vessel which is the subject of such Borrowing shall be in full force and effect.

SECTION 3.32 Ownership. The Borrower is a wholly owned Subsidiary of the Guarantor. Each Vessel Owner is a wholly owned Subsidiary of the Borrower. No Obligor (other than the Guarantor) has any Subsidiaries other than Subsidiaries which are themselves Obligors.

SECTION 3.33 Use of proceeds. The proceeds of the Program Debt will be used by the Borrower (a) to finance or refinance in part the acquisition of the Collateral Vessels purchased or to be purchased by the Vessel Owners (including by refinancing Revolving Loans with Term Loans); (b) for the general corporate purposes of the Borrower and the Guarantor.

SECTION 3.34 Special purpose representations. Except, in each case, with respect to the Guarantor (a) no Obligor has any employees; (b) no Obligor is a party to any contract or agreement with any person, or has conducted any business, or has otherwise created or incurred any liability to any person, other than in connection with the acquisition, chartering and disposition of the Security Assets, the making of Loans or otherwise as permitted by the Loan Documents and activities ancillary thereto; (c) no Obligor is a partner or joint venturer in any partnership or joint venture; and (d) each Obligor has complied in all material respects with all corporate and/or other legal formalities required by its certificate of incorporation, certificate of formation and by-laws, operating agreement, memorandum and articles of association, constitution or similar formation documents, as applicable, and as duly amended prior to the Closing Date, and by Applicable Law, including, among other things, the observance of all restrictions on activity and corporate or other legal form of each such entity’s organizational documents.

SECTION 3.35 Separateness. (a) The Borrower, on behalf of each Obligor (other than the Guarantor) represents that it conducts its business such that it is a separate and readily identifiable business from, and independent of, any Person that is not a Subsidiary, including the Guarantor and each seller under a Purchase Agreement and their respective affiliates (collectively, “Unrelated Parties”), and further covenants as follows:

(i) each Obligor (other than the Guarantor) observes all corporate formalities necessary to remain a legal entity separate and distinct from, and independent of, each Unrelated Party;

(ii) each Obligor (other than the Guarantor) maintains its assets and liabilities separate and distinct from those of each Unrelated Party other than the Borrower, and will not commingle its assets with those of any Unrelated Party other than the Borrower;

(iii) each Obligor (other than the Guarantor) maintains its accounts and funds separate and distinct from the accounts and funds of each Unrelated Party other than the Borrower and will receive, deposit, withdraw and disburses its funds separately from any funds of any Unrelated Party other than the Borrower;

(iv) each Obligor (other than the Guarantor) maintains records, books, accounts and minutes separate from those of any Unrelated Party;

(v) each Obligor (other than the Guarantor) conducts its own business in its own name, and not in the name of any Unrelated Party;

 

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(vi) each Obligor (other than the Guarantor) maintains an arm’s-length relationship with its Affiliates;

(vii) each Obligor (other than the Guarantor) maintains separate financial statements from each Unrelated Party, or if part of a consolidated group, then it will be shown as a separate member of such group;

(viii) each Obligor (other than the Guarantor) pays its own liabilities and obligations out of its own funds, whether in the ordinary course of business or not, as a legal entity separate from each Unrelated Party, provided that liabilities and obligations of Vessel Owners may be paid by Borrower;

(ix) no later than ninety days following the Closing Date, each Obligor (other than the Guarantor) uses separate stationery, invoices and checks from those of each Unrelated Party;

(x) each Obligor (other than the Guarantor) holds itself out as a separate entity, and shall correct any known misunderstanding regarding its status as a separate entity;

(xi) each Obligor (other than the Guarantor) has not agreed to pay or become liable for any Indebtedness of any Unrelated Party;

(xii) each Obligor (other than the Guarantor) has not held out that it is a division of any Unrelated Party, or that any Unrelated Party is a division of it;

(xiii) each Obligor (other than the Guarantor) has not induced any third party to rely on the creditworthiness of any Unrelated Party other than the Guarantor in order that such third party will be induced to contract with it;

(xiv) each Obligor (other than the Guarantor) has not entered into any transactions between it and any Unrelated Party that are more favorable to the Unrelated Party than transactions that the parties would have been able to enter into at such time on an arm’s-length basis with a non-affiliated third party, other than any agreements in effect on the Closing Date;

(xv) each Obligor (other than the Guarantor) observes all corporate or other procedures, including minimum capitalization requirements, required under applicable law and under its constitutive documents; and

(xvi) each Obligor’s (other than the Guarantor) directors acts in accordance with their duties at law and to exercise independent judgment, and shall not breach those duties or act solely in accordance with any direction, opinion, recommendation or instruction of any Unrelated Party in relation to the approval or rejection of, or the exercise of any voting power in relation to, any transaction approval requirements.

(b) The Borrower generally carries on its business and manages its affairs as an independent business separate and identifiable from the business of each Unrelated Party and any other person.

 

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SECTION 3.36 Beneficial Ownership Certification. As of the Restatement Date, to the best knowledge of the Borrower, the information included in the Beneficial Ownership Certification provided on or prior to the Closing Date to any Lender in connection with this Agreement is true and correct in all respects.

ARTICLE IV

CONDITIONS

SECTION 4.01 Initial Borrowing Date. The obligation of each Lender (including each Issuing Bank) to make Credit Extensions under this Agreement (as amended and restated on the Restatement Date) is subject to the satisfaction (or waiver in accordance with Section 9.02) of the following conditions (and, in the case of each document specified in this Section to be received by the Administrative Agent, such document shall be in form and substance satisfactory to the Administrative Agent and each Lender, and shall only be required to the extent not already provided to the Administrative Agent on or prior to the Restatement Date):

(a) Loan Documents. Copies of counterparts of each of the following documents duly executed by all parties thereto:

(i) this Agreement;

(ii) the Intercreditor Agreement, together with, if applicable, an Additional Secured Debt Designation, a Reaffirmation Agreement and Intercreditor Joinder (as each such term is defined in the Intercreditor Agreement);

(iii) the Fee Letters;

(iv) any Intra Group Loan Agreement;

(v) the Share Pledge in respect of the Borrower (together, to the extent relevant, with any ancillary document required to be provided thereunder, including directors’ resignation letters and letters of authority, signed undated share transfer forms and irrevocable proxies);

(vi) the Account Charge(s) in respect of the Charged Accounts, along with each notice and acknowledgement of charge to the extent applicable;

(b) Corporate Documents. In respect of each of the Guarantor and the Borrower:

(i) a copy, certified by a duly authorized representative of such person to be a true, complete and up to date copy, of the constitutional documents of that person;

(ii) a copy, certified by a duly authorized representative of such person to be a true copy and as being in full force and effect and not amended or rescinded, of a resolution of the board of directors of such person:

(A) approving the terms of, and the transactions contemplated by, the Loan Documents to which it is a party and resolving that it execute, deliver and perform the Loan Documents to which it is a party;

 

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(B) authorizing a person or persons to execute and deliver, on behalf of that person, the Loan Documents to which it is party and any notices or other documents to be given pursuant thereto;

(iii) a copy, certified by a duly authorized representative of that person to be a true copy and as being in full force and effect and not amended or rescinded of the power of attorney (if any) issued by or on behalf of that person, and not amended or rescinded, authorizing the execution by the attorneys named therein of the Loan Documents to which it is a party; and

(iv) specimen signatures of the signatories of that person (including any attorney named in the power of attorney referred to in paragraph (iii) above), certified by an officer of that person.

(c) Service of Process. Evidence that the process agent specified in any of the Loan Documents by an Obligor has accepted its appointment in relation to the relevant Obligor.

(d) “Know your customer”.

(i) Each of the Finance Parties shall have received satisfactory information in order to satisfy their respective “know your customer” requirements.

(ii) To the extent the Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, at least five days prior to the Closing Date, any Lender that has requested, in a written notice to the Borrower at least 10 days prior to the Closing Date, a Beneficial Ownership Certification in relation to the Borrower shall have received such Beneficial Ownership Certification (provided that, upon the execution and delivery by such Lender of its signature page to this Agreement, the condition set forth in this Section (ii) shall be deemed to be satisfied).

(e) Opinions.

(i) A due execution, capacity and enforcement legal opinion from Marshall Islands’ counsel as to matters of Marshall Islands’ law, and, if applicable, Singapore counsel as to matters of Singapore’s law and/or such other counsel where any relevant Obligor may be incorporated in respect of matters of law in such jurisdiction.

(ii) If required, reliance letter(s) issued by Marshall Islands and/or Singapore counsel and/or such other counsel as may be relevant with respect to any previous legal opinions(s) issued on matters of law in such other jurisdiction.

(iii) A legal opinion from Milbank LLP as to matters of New York law, and if applicable, reliance letter(s) issued with respect to any previous legal opinion issued on such matters.

(iv) A due execution and capacity legal opinion from Bermudan counsel as to matters of Bermudan law, or if applicable, reliance letter(s) issued by Bermudan counsel with respect to any previous legal opinion issued on such matters.

(v) An enforceability legal opinion from Hong Kong counsel as to matters of Hong Kong law, or if applicable, reliance letter(s) issued by Hong Kong counsel with respect to any previous legal opinion(s) issued on such matters.

 

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(vi) An enforceability legal opinion from British Columbian counsel as to matters of British Columbia law, or if applicable, reliance letter(s) issued by British Columbian counsel with respect to any previous legal opinion issued on such matters.

(vii) A second party opinion from Sustainalytics (acting through its entity Jantzi Research Inc. incorporated in Canada) as to the alignment of the Loans with the Sustainability Linked Loan Principles.

(f) Fees and Expenses. The Obligors shall have paid all fees, costs and expenses (including legal fees and expenses) agreed in writing to be paid by it to the Finance Parties in connection herewith (including pursuant to the Fee Letters) to the extent invoiced at least two (2) Business Days prior to closing (and, in the case of expenses, including legal fees and expenses), provided that any amounts not invoiced two (2) Business Days prior to closing shall be paid promptly, and not later than 10 days after, demand therefor.

(g) Representations and Warranties. The representations and warranties made in Article 3 are true and correct.

(h) No Default. No Default is outstanding or would result from such initial Borrowing.

(i) Other Documents. The Administrative Agent shall have received such other documents as the Administrative Agent or the Required Lenders (through the Administrative Agent) may reasonably request.

Without limiting the generality of Section 8.03(c), for purposes of determining satisfaction of the conditions specified in this Section, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Borrowing Date specifying its objection thereto.

SECTION 4.02 Conditions to Borrowings. The obligation of each Lender to make a Borrowing available (including its initial Borrowing) is additionally subject to the satisfaction (or waiver in accordance with Section 9.02) of the following conditions (and, in the case of each document specified in this Section to be received by the Administrative Agent, such document shall be in form and substance satisfactory to the Administrative Agent and each Lender):

(a) Loan Documents and Related Contracts. Each of the following documents duly executed by all parties thereto, to the extent applicable:

(i) copy of the Borrowing Request;

(ii) to the extent such Borrowing is used to acquire a Collateral Vessel (any such Borrowing, a “Vessel Borrowing”), an original Mortgage (and evidence satisfactory to the Administrative Agent that such Mortgage has been or will be, immediately following the Borrowing, duly registered with applicable registry of the Approved Flag State) in respect of each relevant Collateral Vessel subject to the Borrowing (each a “Relevant Vessel”);

(iii) a copy (with originals to follow promptly following closing) of an executed Share Pledge in respect of each relevant Vessel Owner (each a “Relevant Vessel Owner”), together, to the extent relevant, with any ancillary document required to be provided thereunder, including directors’ resignation letters and letters of authority, signed undated share transfer forms and irrevocable proxies;

 

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(iv) copies of each Intra Group Loan Agreement;

(v) solely in the case of a Vessel Borrowing, a copy (with originals to follow promptly following closing) of the Intercreditor Joinder (Grantor) (as such term is defined in the Intercreditor Agreement) in respect of each Relevant Vessel Owner;

(vi) solely in the case of a Vessel Borrowing, a copy (with originals to follow promptly following closing) of an executed Account Charge in respect of each relevant Vessel Owner Account, where applicable;

(vii) solely in the case of a Vessel Borrowing, a copy (with originals to follow promptly following closing) of an executed General Assignment in respect of each Relevant Vessel;

(viii) solely in the case of a Vessel Borrowing, a copy (with originals to follow promptly following closing) of an executed Deed of Covenant in respect of each Relevant Vessel, where applicable;

(ix) solely in the case of a Vessel Borrowing, a certified copy of the Management Agreement in respect of each Relevant Vessel;

(x) solely in the case of a Vessel Borrowing, an original Management Agreement Assignment in respect of each Relevant Vessel;

(xi) solely in the case of a Vessel Borrowing, an original Manager’s Undertaking;

(xii) solely in the case of a Vessel Borrowing, an original Insurances Assignment in respect of each Relevant Vessel;

(xiii) solely in the case of a Vessel Borrowing, a certified copy of any Eligible Charter in respect of each Relevant Vessel, where applicable;

(xiv) solely in the case of a Vessel Borrowing, a certified copy of any Charter Guarantee in respect of each Relevant Vessel, where applicable;

(xv) solely in the case of a Vessel Borrowing, a certified copy of the Purchase Agreement in respect of each Relevant Vessel, along with each of the documentary conditions precedent set out therein to the extent requested by the Administrative Agent;

(xvi) solely in the case of a Vessel Borrowing, a copy of the Bill of Sale and the protocol of delivery and acceptance in respect of each Relevant Vessel (and evidence satisfactory to the Administrative Agent that, to the extent required, such documents have been or will be, immediately following the Borrowing, duly registered with applicable registry of the Approved Flag State); and

(xvii) executed copies (with originals to follow promptly following closing) of all notices and acknowledgments of assignment required to be served under each Security Document referred to above, provided that any acknowledgements to be provided by any Person which is not a member of the Guarantor Group shall be permitted to be provided within fourteen (14) Business Days of the applicable Borrowing Date and the requirement to provide any acknowledgement from a Charterer shall be subject to the provisions of Section 5.24.

 

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(b) Relevant Vessel documents. Certified copies of: (i) a classification certificate (including a confirmation of class or equivalent certificate) in respect of each Relevant Vessel showing each Relevant Vessel to be in class free from any overdue recommendation, condition or qualification affecting class or, in the event that this is not available, a faxed copy with a certified copy to follow as soon as practicable; (ii) a valid Safety Management Certificate for each Relevant Vessel; (iii) a valid Document of Compliance in respect of each Relevant Vessel; (iv) a valid International Ship Security Certificate for each Relevant Vessel; and (v) to the extent the applicable Relevant Vessel owner has or is required to have such certificate, the certificate listing all the potentially hazardous materials on board each Relevant Vessel.

(c) Obligatory Insurances.

(i) Certified copies of the Obligatory Insurances in respect of each Relevant Vessel; and

(ii) Fax or email confirmation from each broker and club concerned with the Obligatory Insurances of each Relevant Vessel that:

(A) the relevant cover is in effect;

(B) they will accept notice of assignment of the Obligatory Insurances in favor of the Security Trustee and execute an acknowledgement of the notice in the form reasonably acceptable to the Security Trustee;

(C) they will restrict their lien for unpaid premiums under any fleet policy to unpaid premiums in respect of such Relevant Vessel only;

(D) they will issue a letter of undertaking in the form provided for in the Insurances Assignment;

(E) they will accept endorsement of a loss payable clause on the policies in the form provided for in the Insurances Assignment (in the case of brokers and insurers other than clubs) or will note the interest of the Administrative Agent in the entry for the Relevant Vessel by way of a loss payable clause in their current standard form (in the case of clubs); and

(F) they are not aware of any mortgage, charge, assignment or other encumbrance affecting the Obligatory Insurances with which they are concerned (other than any previously disclosed by the Borrower or the Vessel Owner to the Administrative Agent in writing),

or in form and substance satisfactory to the Administrative Agent’s insurance adviser.

(iii) Receipt by the Administrative Agent of a final insurance report prepared by BankServe Insurance Services Limited verifying Borrower’s compliance with the insurance requirements set forth in Section 5.26 and 5.27.

 

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(d) Compliance Certificate. A Compliance Certificate signed by the Borrower and certifying, taking account of the proposed Borrowing: (i) the BB Ratio and that no BB Event will occur or is continuing (including confirmation as to any Excluded Collateral Vessels or exclusions of Asset Values due to any Concentration Limit Event); (ii) the DSCR Ratio and that no DSCR Cash Sweep Event will occur or is continuing; (iii) compliance with the Guarantor Financial Covenants; (iv) compliance with the Concentration Limit Requirements; and (v) compliance with the Hedging Requirement. Such Compliance Certificate will also attach appraisals in form and substance satisfactory to the Administrative Agent setting out (in reasonable detail) the Asset Value and Terminal Value of each Relevant Vessel.

(e) Borrower and Guarantor corporate documents. A bring-down certificate from each of the Borrower and the Guarantor in respect of the items referred to in Section 4.01(b) and, in the case of the Borrower’s bring-down certificate, certifying: (i) that no Default has occurred and is continuing; (ii) that the representations and warranties made in Article 3 shall be true and correct both before and after giving effect to the Borrowing; and (iii) to the Borrower’s knowledge, that the parties to any Eligible Charter in respect of each Relevant Vessel shall be in compliance with the requirements of such Eligible Charter.

(f) Relevant Vessel Owner and Manager corporate documents. In respect of each Relevant Vessel Owner and the Manager:

(i) a copy, certified by a duly authorized representative of such Person to be a true, complete and up to date copy, of the constitutional documents of that Person;

(ii) a copy, certified by a duly authorized representative of such Person to be a true copy and as being in full force and effect and not amended or rescinded, of a resolution of the board of directors of such Person:

(A) approving the terms of, and the transactions contemplated by, the Loan Documents to which it is a party and resolving that it execute, deliver and perform the Loan Documents to which it is a party;

(B) authorizing a person or persons to execute and deliver, on behalf of that person, the Loan Documents to which it is party and any notices or other documents to be given pursuant thereto;

(iii) a copy, certified by a duly authorized representative of that person to be a true copy and as being in full force and effect and not amended or rescinded of the power of attorney (if any) issued by or on behalf of that person, and not amended or rescinded, authorizing the execution by the attorneys named therein of the Loan Documents to which it is a party; and

(iv) specimen signatures of the signatories of that person (including any attorney named in the power of attorney referred to in paragraph (c) above), certified by an officer of that person.

(g) Service of Process. Evidence that the process agent specified in any of the Loan Documents by an Obligor has accepted its appointment in relation to the relevant Obligor.

(h) “Know your customer”. Each of the Finance Parties shall have received satisfactory information in order to satisfy their respective “know your customer” requirements.

 

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(i) Opinions.

(i) A due execution, capacity and enforcement legal opinion from Marshall Islands’ counsel as to matters of Marshall Islands’ law, and/or from such other counsel as to matters of such other jurisdiction where any Obligor may be incorporated;

(ii) A legal opinion from Milbank LLP as to matters of New York law.

(iii) A legal opinion in relation to the registration and enforceability of the Mortgage (if applicable) under the laws of Hong Kong or the laws of such Approved Flag State, as may be applicable.

(j) Existing Security. If applicable, evidence in form and substance satisfactory to the Administrative Agent of the release and discharge of any existing mortgage or other Security Interest affecting any Relevant Vessel, or any other releases in connection with any interest which would or might otherwise, in the Administrative Agent’s opinion, adversely affect the security constituted by the Security Documents.

(k) Taxes. Evidence that any Taxes due and payable by the Borrower or any Relevant Vessel Owner in connection with the Relevant Vessel Owner’s purchase of the Relevant Vessel have been paid and discharged in full.

(l) Fees and Expenses. The Obligors shall have paid all fees, costs and expenses (including legal fees and expenses) invoiced at least two (2) Business Days prior to the applicable Borrowing Date and agreed in writing to be paid by it to the Finance Parties in connection herewith (including pursuant to the Fee Letters) to the extent due (and, in the case of expenses, including legal fees and expenses), provided that any amounts not invoiced two (2) Business Days prior to closing shall be paid promptly, and not later than 10 days after, demand therefor.

(m) No Default. No Default is outstanding or would result from the Borrowing Date.

(n) Other Documents. The Administrative Agent shall have received such other documents as the Administrative Agent or the Required Lenders (through the Administrative Agent) may reasonably request.

SECTION 4.03 Conditions to L/C Credit Extension. The obligation of each Issuing Bank to make an L/C Credit Extension (including its initial Credit Extension) is additionally subject to the satisfaction of the following conditions:

(a) the Administrative Agent and, the applicable Issuing Bank shall have received a written request for L/C Credit Extension, as applicable, in accordance with the requirements hereof;

(b) the representations and warranties of the Borrower set forth in this Agreement and in any other Loan Document shall be true and correct in all material respects (or, in the case of any such representation or warranty already qualified by materiality, in all respects) on and as of the date of such L/C Credit Extension;

(c) no Default shall have occurred and be continuing or would result from such Credit Extension or from the application of proceeds thereof

 

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(d) a Compliance Certificate signed by the Borrower and evidencing no Cash Sweep Event or BB Event shall be continuing or would result from such L/C Credit Extension;

(e) the Borrower and the applicable Issuing Bank shall have agreed the fronting fee with respect to each Letter of Credit issued by such Issuing Bank pursuant to Section 2.09(e); and

(f) the Administrative Agent being satisfied that all applicable Security Documents in connection with such L/C Credit Extension have been duly executed.

Each request for an L/C Credit Extension by the Borrower hereunder and each L/C Credit Extension shall be deemed to constitute a representation and warranty by the Borrower on and as of the date of the applicable L/C Credit Extension as to the matters specified in clauses (b) and (c) above in this Section 4.03.

SECTION 4.04 Conditions to Restatement. This Agreement shall not become effective until the date on which each of the following conditions is satisfied (and, in the case of each document specified in this Section to be received by the Administrative Agent, such document shall be in form and substance satisfactory to the Administrative Agent and each Lender):

(a) Loan Restatement Documents. The Administrative Agent (or its counsel) shall have received from each party hereto executed counterparts of:

(i) this Agreement;

(ii) Intercreditor Agreement (as amended and restated on or about the date hereof);

(iii) the amendment agreement in respect of the Account Charge relating to the HK Collection Account, together with any and all notices and acknowledgements entered into in connection therewith; and

(iv) each of the Existing Program Debt Documents (as amended and restated on or about the date hereof).

(b) Security Confirmation. The Administrative Agent (or its counsel) shall have received from each of the Manager and any sub-managers, confirmations as to any existing security granted in connection with this Agreement and any other Secured Debt Documents.

(c) Fee Letters. Each of the Agent and the other Finance Parties party hereto shall have received from each other party thereto executed counterparts of any Fee Letters entered into in connection with this Agreement.

(d) Opinions. The Administrative Agent (or its counsel) and each Lender shall have received:

(i) a due execution, capacity and enforcement legal opinion from Marshall Islands’ counsel as to matters of Marshall Islands’ law, from Singapore counsel as to matters of Singapore law and/or from such other counsel as to matters of such other jurisdiction where any Obligor may be incorporated;

(ii) a legal opinion from Bermudan counsel as to matters of Bermudan law;

 

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(iii) a legal opinion from Hong Kong counsel as to matters of Hong Kong law; and

(iv) a legal opinion from Milbank LLP as to matters of New York law.

(e) Corporate Documents. In respect of each of the Guarantor, the Borrower, each Vessel Owner and the Manager:

(i) a copy, certified by a duly authorized representative of such person to be a true, complete and up to date copy, of the constitutional documents of that person;

(ii) a copy, certified by a duly authorized representative of such person to be a true copy and as being in full force and effect and not amended or rescinded, of a resolution of the board of directors of such person:

(A) approving the terms of, and the transactions contemplated by, the Intercreditor Agreement and this Agreement and any other Loan Documents to which it is a party and resolving that it execute, deliver and perform the Loan Documents to which it is a party;

(B) authorizing a person or persons to execute and deliver, on behalf of that person, the Loan Documents to which it is party and any notices or other documents to be given pursuant thereto;

(iii) a copy, certified by a duly authorized representative of that person to be a true copy and as being in full force and effect and not amended or rescinded of the power of attorney (if any) issued by or on behalf of that person, and not amended or rescinded, authorizing the execution by the attorneys named therein of the Loan Documents to which it is a party; and

(iv) specimen signatures of the signatories of that person (including any attorney named in the power of attorney referred to in paragraph (iii) above), certified by an officer of that person.

(f) Know your customer.

(i) Each of the Finance Parties shall have received satisfactory information in order to satisfy their respective “know your customer” requirements.

(ii) To the extent the Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, at least five days prior to the Restatement Date, any Lender that has requested, in a written notice to the Borrower at least 10 days prior to the Restatement Date, a Beneficial Ownership Certification in relation to the Borrower shall have received such Beneficial Ownership Certification (provided that, upon the execution and delivery by such Lender of its signature page to this Agreement, the condition set forth in this Section (ii) shall be deemed to be satisfied).

(g) Fees and Expenses. The Obligors shall have paid all fees, costs and expenses (including legal fees and expenses) agreed in writing to be paid by it to the Finance Parties in connection herewith (including pursuant to the Fee Letters) to the extent invoiced at least two (2) Business Days prior to the Restatement Date (and, in the case of expenses, including legal fees and expenses), provided that any amounts not invoiced two (2) Business Days prior to the Restatement Date shall be paid promptly, and not later than 10 days after, demand therefor.

 

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(h) Representations and Warranties. The representations and warranties made in Article 3 are true and correct.

(i) No Default. No Default is outstanding or would result from the Restatement Date.

(j) Other Documents. The Administrative Agent shall have received such other documents as the Administrative Agent or the Required Lenders (through the Administrative Agent) may reasonably request.

SECTION 4.05 Post-Restatement Items. Within 1 Business Day of the Restatement Date, the Administrative Agent shall have received evidence satisfactory to it that the Account Bank in respect of the Collection Account, has received and acknowledged receipt of, a copy of the Intercreditor Agreement (as amended and restated on or about the date hereof).

ARTICLE V

AFFIRMATIVE COVENANTS

Until the Commitments have expired or been terminated, all Obligations shall have been paid in full and all Letters of Credit shall have expired or been canceled (without any pending drawings), the Borrower covenants and agrees with the Lenders that:

SECTION 5.01 Financial Statements. The Borrower will furnish to the Administrative Agent and each Lender: (a) the audited consolidated financial statements of the Guarantor for each of its financial years ending after the Restatement Date; and (b) quarterly consolidated statements of the Guarantor for each quarter of each of their financial years ending after the Restatement Date. All financial statements must be supplied promptly after they are available and: (i) in the case of audited financial statements, within 180 days of the end of the relevant financial period; and (ii) in the case of quarterly financial statements, within 90 days of the end of the relevant financial period. The Borrower must ensure that each set of the financial statements supplied under this Agreement fairly represents in all material respects the financial condition (consolidated or otherwise) of the Guarantor as at the date to which those financial statements were drawn up, subject, in the case of interim financial statements, to year-end adjustments and the absence of footnotes. The Borrower must notify the Administrative Agent of any change to the basis on which the Guarantor’s audited financial statements are prepared. If requested by the Administrative Agent, the Borrower must supply or procure that the following are supplied to the Administrative Agent: (A) a full description of any change notified above; and (B) sufficient information to enable the Lenders to make a proper comparison between the financial position shown by the set of financial statements prepared on the changed basis and its most recent audited consolidated financial statements delivered to the Administrative Agent and the Lenders under this Agreement. If requested by the Administrative Agent, the Guarantor must enter into discussions for a period of not more than thirty (30) days with a view to agreeing to any amendments required to be made to this Agreement to place the Administrative Agent and the Lenders in the same position as it would have been in if the change had not happened. If no such agreement is reached on the required amendments to this Agreement, the Borrower must ensure that the Guarantor’s or its auditors certify those amendments; the certificate of the auditors will be, in the absence of manifest error, binding on all the Parties.

 

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SECTION 5.02 Compliance Certificates. The Borrower will deliver to the Administrative Agent a Compliance Certificate certified by the Borrower and the Guarantor in the form set out in Exhibit B on the following dates:

(a) within 2 Business Days following each Determination Date;

(b) five (5) days prior to a Vessel Disposition and if any related Net Sale Proceeds shall be used by the Borrower in making a prepayment in accordance with this Agreement and Section 4.02(e) of the Intercreditor Agreement, as of the date of such prepayment;

(c) the date of any Total Loss of a Collateral Vessel (as determined by the Administrative Agent and notified to the Borrower);

(d) five (5) days prior to a Vessel Substitution Date;

(e) upon the release of any Security Assets; and

(f) upon any Borrowing Date.

Each Compliance Certificate supplied by the Borrower and the Guarantor shall, amongst other things, set out (in reasonable detail) computations as to compliance with the financial covenants set forth in Section 6.09 below and the Concentration Limit Requirements and must be signed by an officer of the Guarantor.

SECTION 5.03 Valuation.

(a) The valuation of a Collateral Vessel shall be the mean average of two valuations each certified in Dollars and carried out by two of the Approved Valuers (without physical inspection of the relevant Collateral Vessel), reporting to the Administrative Agent by way of written reports in form and substance satisfactory to the Administrative Agent (acting reasonably) on the basis of a sale for prompt delivery of the Collateral Vessel for cash (free of Security Interests), on a without charter basis and at arm’s-length on normal commercial terms as between willing seller and buyer.

(b) There shall be deducted from any value or valuation produced in accordance with this Section 5.03 an amount equal to the sum of (i) the amount which is owing at such time plus (ii) the amount which is scheduled to become due prior to the due date of the next valuation pursuant to clause (d) of this Section 5.03, in each case under the foregoing clauses (b)(i) and (ii), solely to the extent such amount is secured on the Collateral Vessel concerned by any prior or equal ranking Security Interest (other than in favor of the Security Trustee to secure the Secured Obligations).

(c) Prior to each Borrowing Date in respect of the acquisition of one or more Collateral Vessels, the Borrower will procure a valuation in relation to each such Collateral Vessel, on the basis described in subsections 5.03(a) and (b) above.

(d) In respect of the Collateral Vessels, the Borrower will procure updated valuations on the basis described in this Section 5.03 every six months as of December 31 and June 30, provided that if a BB Event occurs and is not cured on the immediately succeeding Payment Date, the Borrower shall procure updated valuations on each Determination Date until such BB Event is cured. Such valuations shall be (or have been) used as the basis for determining the BB Ratio and shall be attached to each Compliance Certificate delivered pursuant to Section 5.02.

 

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(e) The Borrower will procure in favor of the Administrative Agent and the Approved Valuers, all such information as they may reasonably require in order to effect such valuations.

(f) All valuations shall be at the expense of the Borrower.

(g) Any valuation under this Section 5.03 shall be binding and conclusive (save for manifest error).

SECTION 5.04 Access to Books and Records. Upon the request of the Administrative Agent, the Obligors shall provide the Administrative Agent and any of its representatives, professional advisors and contractors with access to, and permit inspection of, its books and records, in each case at reasonable times and upon reasonable notice; provided that unless an Event of Default has occurred and is continuing, such inspections shall not occur more than one time during any calendar year.

SECTION 5.05 Information—miscellaneous. Each of the Borrower and the Guarantor must supply to the Administrative Agent in sufficient copies (which may take the form of an electronic copy) for all the Lenders:

(a) information with respect to the Collateral Vessels reasonably requested by Administrative Agent and copies of any publicly available information regarding the Obligors;

(b) promptly upon becoming aware of them, details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against it and which would reasonably be expected, if adversely determined, to have a Material Adverse Effect;

(c) promptly upon becoming aware of them, details of any claim, lawsuit, action, proceedings or investigation which are current, threatened or pending against it with respect to Sanctions; and

(d) promptly on request (i) such further information, in sufficient copies for all the Lenders, regarding the financial condition and operations of the Obligors as the Administrative Agent or as the Lenders may reasonably request and (ii) information and documentation reasonably requested by the Administrative Agent or any Lender for purposes of compliance with the Beneficial Ownership Regulation.

SECTION 5.06 Notification of Default.

(a) Unless the Administrative Agent has already been so notified, the Borrower must notify the Administrative Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence.

(b) Promptly on request by the Administrative Agent but not more often than once in any 3 month period, unless the Administrative Agent, acting reasonably, believes an Event of Default has occurred and is continuing (in which event the Administrative Agent shall specify the applicable Event of Default and shall be entitled to make such requests as and when it considers it appropriate to do so), the Borrower must supply to the Administrative Agent a certificate, signed by two (2) of its authorized signatories on its behalf, certifying that no Event of Default is continuing or, if an Event of Default is continuing, specifying the Event of Default and the steps, if any, being taken to remedy it.

 

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SECTION 5.07 Know your customer checks.

(a) If:

(i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;

(ii) any change in the status of an Obligor after the date of this Agreement; or

(iii) a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,

obliges the Administrative Agent or any Lender (or, in the case of Section 5.07(a)(iii), any prospective new Lender) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, the Borrower shall promptly upon the request of the Administrative Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Administrative Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in Section 5.07(a)(iii), on behalf of any prospective new Lender) in order for the Administrative Agent, such Lender or, in the case of the event described in Section 5.07(a)(iii), any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Loan Documents,

(b) Each Lender shall promptly upon the request of the Administrative Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Administrative Agent (for itself) in order for the Administrative Agent to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Loan Documents.

(c) The Borrower shall promptly upon the request of the Administrative Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Administrative Agent (for itself or on behalf of any Lender) or any Lender in order for the Administrative Agent or such Lender to refresh and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Loan Documents, provided that the Borrower shall not be required to comply with any such request from the Administrative Agent or any Lender more than once in any twelve (12) month period.

SECTION 5.08 Use of websites. The Borrower acknowledges and agrees that any information under this Agreement may be delivered to a Lender (through the Administrative Agent) on to an electronic website if:

(a) the Administrative Agent and the Lender agree;

(b) the Administrative Agent appoints a website provider and designates an electronic website for this purpose;

(c) the designated website is used for communication between the Administrative Agent and the Lenders;

 

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(d) the Administrative Agent notifies the Lenders of the address and password for the website;

(e) the information can only be posted on the website by the Administrative Agent; and

(f) the information posted is in a format agreed between the Borrower and the Administrative Agent.

The cost of the website shall be borne by the Borrower, subject to such cost being agreed by the Borrower beforehand. Any Lender may request, through the Administrative Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the designated website. The Borrower shall at its own cost comply with any such request within ten (10) Business Days.

SECTION 5.09 Authorizations. Each Obligor must promptly obtain, maintain and comply, in all material respects, with the terms of any authorization required under any Applicable Law to enable it to perform its obligations under, or for the validity or enforceability of, any Loan Document.

SECTION 5.10 Compliance with laws. Each Obligor must comply and must procure that the Manager complies in all material respects with all Applicable Laws to which it is subject.

SECTION 5.11 Pari passu ranking. Each Obligor must ensure that its payment obligations under the Loan Documents rank at least pari passu with all its other present and future unsecured and unsubordinated payment obligations, except for obligations mandatorily preferred by law applying to companies generally.

SECTION 5.12 Place of business. Each Obligor must:

(a) establish and maintain a place of business in, and shall keep its corporate documents and records at any of Hong Kong, the Republic of Singapore and Vancouver, or any of them, provided the Administrative Agent is satisfied that such establishment in such location does not adversely affect the validity, enforceability or effectiveness of any Loan Document and does not give rise to any requirement under any Applicable Law for a deduction for withholding Tax; and

(b) except with respect to the Guarantor, will not establish, or do anything as a result of which it would be deemed to have, a place of business in any other location other than Hong Kong, the Republic of Singapore and Vancouver without the consent of the Administrative Agent (acting on the instructions of the Required Lenders, such consent not to be unreasonably withheld or delayed).

SECTION 5.13 Security. Each Obligor:

(a) will procure that each Mortgage to which it is a party is, and continues to be, registered as a first priority mortgage on the registry of the relevant Approved Flag State;

(b) without prejudice to paragraph (a) will procure that the Mortgages and any other security conferred by it under any Security Document are registered as a first priority interest with the relevant authorities within the period prescribed by the Applicable Laws and is maintained and perfected with the relevant authorities;

(c) will at its own cost, use best efforts to ensure that any Loan Document to which it is a party validly creates the obligations and Security Interests which it purports to create; and

 

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(d) without limiting the generality of paragraph (a) above, will at its own cost, promptly register, file, record or enroll any Loan Document to which it is a party with any court or authority, pay any stamp, registration or similar tax payable in respect of any such Loan Document, give any notice or take any other step which, in the reasonable opinion of the Administrative Agent, is or has become necessary for any such Loan Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.

SECTION 5.14 Separateness Covenants. Each Obligor (other than the Guarantor) shall conduct its business such that it is a separate and readily identifiable business from, and independent of, any Unrelated Party, and further covenants as follows:

(a) Each Obligor (other than the Guarantor) will observe all corporate formalities necessary to remain a legal entity separate and distinct from, and independent of, each Unrelated Party;

(b) Each Obligor (other than the Guarantor) shall maintain its assets and liabilities separate and distinct from those of each Unrelated Party other than the Borrower, and will not commingle its assets with those of any Unrelated Party other than the Borrower;

(c) Each Obligor (other than the Guarantor) shall maintain its accounts and funds separate and distinct from the accounts and funds of each Unrelated Party other than the Borrower and will receive, deposit, withdraw and disburse its funds separately from any funds of any Unrelated Party other than the Borrower;

(d) Each Obligor (other than the Guarantor) shall maintain records, books, accounts and minutes separate from those of any Unrelated Party;

(e) Each Obligor (other than the Guarantor) shall conduct its own business in its own name, and not in the name of any Unrelated Party;

(f) Each Obligor (other than the Guarantor) shall maintain an arm’s-length relationship with its Affiliates;

(g) Each Obligor (other than the Guarantor) shall maintain separate financial statements from each Unrelated Party, or if part of a consolidated group, then it will be shown as a separate member of such group;

(h) Each Obligor (other than the Guarantor) shall pay its own liabilities and obligations out of its own funds, whether in the ordinary course of business or not, as a legal entity separate from each Unrelated Party, provided that liabilities and obligations of Vessel Owners may be paid by Borrower;

(i) Each Obligor (other than the Guarantor) shall use separate invoices and checks from those of each Unrelated Party;

(j) Each Obligor (other than the Guarantor) shall hold itself out as a separate entity, and correct any known misunderstanding regarding its status as a separate entity;

(k) Each Obligor (other than the Guarantor) shall not agree to pay or become liable for any Indebtedness of any Unrelated Party;

(l) Each Obligor (other than the Guarantor) shall not hold out that it is a division of any Unrelated Party, or that any Unrelated Party is a division of it;

 

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(m) Each Obligor (other than the Guarantor) shall not induce any third party to rely on the creditworthiness or any Unrelated Party other than the Guarantor in order that such third party will be induced to contract with it;

(n) Each Obligor (other than the Guarantor) shall not enter into any transactions between it and any Unrelated Party that are more favorable to the Unrelated Party than transactions that the parties would have been able to enter into at such time on an arm’s-length basis with a non-affiliated third party, other than any agreements in effect on the Closing Date; and

(o) Each Obligor (other than the Guarantor) shall observe all corporate or other procedures required under applicable law and under its constitutive documents; and

(p) Each Obligor (other than the Guarantor) shall procure that each of its directors will act in accordance with their duties at law and to exercise independent judgment, and shall not in breach of those duties, act solely in accordance with any direction, opinion, recommendation or instruction of any Unrelated Party in relation to the approval or rejection of, or the exercise of any voting power in relation to, any transaction approval requirements.

SECTION 5.15 Registration of the Collateral Vessels. Each Obligor shall and procure that the Manager shall:

(a) procure and maintain the valid and effective provisional registration of the Collateral Vessels under the flag of an Approved Flag State and shall effect permanent registration of the Collateral Vessel within two months following the Borrowing Date, and shall ensure nothing is done or omitted by which the registration of the Collateral Vessels would or might be defeated or imperiled; and

(b) not change the name or port of registration of the Collateral Vessels without the prior written notice to the Administrative Agent.

SECTION 5.16 Classification and repair. Each Obligor will, and will procure that the Manager will:

(a) ensure that the Collateral Vessels are surveyed from time to time as required by the Classification Society in which that Collateral Vessel is for the time being entered and maintain and preserve each Collateral Vessel in good working order and repair, ordinary wear and tear excepted, and in any event in such condition as will entitle each to classification free of all recommendations or conditions against class that are not overdue;

(b) procure that all repairs to or replacement of any damaged, worn or lost parts or equipment shall be effected in such manner (both as regards workmanship and quality of materials) as not to diminish the value of the Collateral Vessels;

(c) unless required to comply with clause (e) below, not remove any material part of any of the Collateral Vessels, or any item of equipment installed on any of the Collateral Vessels unless 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 Security Interest (other than any Permitted Liens) or any right in favor of any person other than the Administrative Agent and becomes on installation on that Collateral Vessel the property of the relevant Vessel Owner and subject to the security constituted by the relevant Security Document(s) provided that such Vessel Owner may install and remove equipment owned by a third party if the equipment can be removed without any risk of material damage to a Collateral Vessel;

 

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(d) ensure that each Collateral Vessel complies in all material respects with all Applicable Laws from time to time applicable to vessels registered under the laws and flag of the relevant Approved Flag State;

(e) not without the prior written consent of the Administrative Agent (such consent not to be unreasonably withheld), cause or permit to be made any substantial change in the structure, type or performance characteristics of any of the Collateral Vessels and provide notification of such substantial changes in structure, type or performance characteristics of any of the Collateral Vessels to the Administrative Agent and, furthermore, provide confirmation to the Administrative Agent that such substantial change in structure, type or performance characteristics of any of the Collateral Vessels shall not result in a breach of any covenant under this Agreement; provided, however, that this Section 5.16(e) shall not apply to (i) modifications of any Collateral Vessel with respect to ballast water treatment systems, bulbous bows, and scrubbers provided that there is no reduction in the value of such Collateral Vessel, and (ii) mandatory modifications to any Collateral Vessel required by Applicable Law from time to time;

(f) maintain a safe sustainable and socially responsible policy with respect to dismantling of the Collateral Vessels;

(g) ensure that any Collateral Vessel controlled by it or sold to an intermediary with the intention of being scrapped prior to the Discharge of Secured Obligations, is recycled at a recycling yard which conducts its recycling business in a socially and environmentally responsible manner, in accordance with the provisions of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 (the “Hong Kong Convention”) and/or Regulation (EU) No 1257/2013 of the European Parliament and of the Council of 20 November 2013 on ship recycling and amending Regulation (EC) No 1013/2006 and Directive 2009/16/EC, as applicable; and

(h) procure, with effect from the earlier of (i) December 31, 2020 and (ii) the date the Hong Kong Convention comes into force, obtain an Inventory of Hazardous Material in respect of the Collateral Vessel owned by it which shall be maintained until the Discharge of Secured Obligations. For the purposes of this clause, “Inventory of Hazardous Material” means a statement of compliance issued by the relevant Classification Society which includes a list of any and all materials known to be potentially hazardous present in a Collateral Vessel’s structure and equipment, also referred to as “List of Hazardous Materials” or “Green Passport”.

SECTION 5.17 Lawful and safe operation. Each Obligor will, and will procure that the Manager will:

(a) operate each Collateral Vessel and cause each Collateral Vessel to be operated in a manner consistent in all material respects with any and all laws, regulations, treaties and conventions (and all rules and regulations issued thereunder) from time to time applicable to that Collateral Vessel;

(b) not cause or permit any of the Collateral Vessels to trade with, or within the territorial waters of any country in which her safety could reasonably be expected to be imperiled by exposure to piracy, terrorism, arrest, requisition, confiscation, forfeiture, seizure, destruction or condemnation as prize;

(c) not cause or permit any of the Collateral Vessels to be employed in any manner which will or may give rise to any reasonable degree of likelihood that such Collateral Vessel would be liable to requisition, confiscation, forfeiture, seizure, destruction or condemnation as prize;

 

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(d) not cause or permit any of the Collateral Vessels to be employed in any trade or business which is forbidden by international law or is illicit or in knowingly carrying illicit or prohibited goods;

(e) in the event of hostilities in any part of the world (whether war be declared or not) not cause or permit any of the Collateral Vessels to be employed in carrying any contraband goods and that she does not trade in any zone after it has been declared a war zone by any authority or by any of that Collateral Vessel’s war risks Insurers unless that Collateral Vessel’s Insurers shall have confirmed to the Borrower that such Collateral Vessel is held covered under the Obligatory Insurances for the voyage(s) in question; and

(f) not charter any of the Collateral Vessels or permit any of the Collateral Vessels to serve under any contract of affreightment with any foreign country or national of any foreign country which would be contrary to Applicable Law or would render any Loan Document or the security conferred by the Security Documents unlawful.

SECTION 5.18 Repair of the Collateral Vessels. No Obligor will and each Obligor will procure that the Manager will not, put any of the Collateral Vessels into the possession of any person for the purpose of work being done upon her beyond the amount of US$5,000,000 (or equivalent), other than for classification or scheduled dry docking unless such person shall have given an undertaking to the Administrative Agent not to exercise any lien on that Collateral Vessel or Obligatory Insurances for the cost of that work or otherwise.

SECTION 5.19 Arrests and liabilities. Each Obligor will, and will procure that the Manager will, at all times:

(a) pay and discharge all obligations and liabilities whatsoever which have given or may give rise to liens (other than Permitted Liens) on or claims enforceable against any of the Collateral Vessels and take all reasonable steps to prevent a threatened arrest of any of the Collateral Vessels;

(b) notify the Administrative Agent promptly in writing of the levy of either distress on any of the Collateral Vessels or her arrest, detention, seizure, condemnation as prize, compulsory acquisition or requisition for title or use and (save in the case of compulsory acquisition or requisition for title or use) obtain her release within thirty (30) days;

(c) pay and discharge when due all dues, taxes, assessments, governmental charges, fines and penalties lawfully imposed on or in respect of any of the Collateral Vessels or any Obligor except those which are being disputed in good faith by appropriate proceedings (and for the payment of which adequate reserves have been provided or are and continue to be available) and provided that the continued existence of such dues, taxes, assessments, governmental charges, fines or penalties does not give rise to any reasonable degree of likelihood that any of the Collateral Vessels would be liable to arrest, requisition, confiscation, forfeiture, seizure, destruction or condemnation as prize; and

(d) pay and discharge all other obligations and liabilities whatsoever in respect of any of the Collateral Vessels and the Obligatory Insurances except those which are being disputed in good faith by appropriate proceedings (and for the payment of which adequate reserves have been provided or are and continue to be available) and provided that the continued existence of those obligations and liabilities in respect of any of the Collateral Vessels and the Obligatory Insurances does not give rise to any reasonable degree of likelihood that such Collateral Vessel would be liable to arrest, requisition, confiscation, forfeiture, seizure, destruction or condemnation as prize and provided always that each Collateral Vessel remains properly managed and insured at all times in accordance with the terms of the Loan Documents.

 

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SECTION 5.20 Environment. Each Obligor shall, and shall procure that the Manager shall, at all times:

(a) comply with all applicable Environmental Laws including, without limitation, requirements relating to the establishment of financial responsibility (and shall require that all Environmental Representatives of such Obligor comply with all applicable Environmental Laws and obtain and comply with all required Environmental Approvals, which Environmental Laws and Environmental Approvals relate to any of the Collateral Vessels or her operation or her carriage of cargo); and

(b) promptly upon the occurrence of any of the following events in relation to a Collateral Vessel, provide to the Administrative Agent a certificate of an officer of the Borrower or of the Borrower’s agents specifying in detail the nature of the event concerned:

(i) the receipt by the Borrower or any Environmental Representative (where the Borrower has knowledge of the receipt) of any Environmental Claim; or

(ii) any release of Hazardous Materials.

SECTION 5.21 Information regarding the Collateral Vessels. Each Obligor shall, and shall procure that the Manager shall, at all times:

(a) promptly notify the Administrative Agent of the occurrence of any accident, casualty or other event which has caused or resulted in or may cause or result in a Collateral Vessel being or becoming a Total Loss;

(b) promptly notify the Administrative Agent of any material requirement or recommendation made by any insurer or Classification Society or by any competent authority which is not complied with in a timely manner;

(c) if requested by the Administrative Agent (not more than once in any calendar year), provide the Administrative Agent with a schedule setting out and all intended dry dockings of any of the Collateral Vessels;

(d) promptly notify the Administrative Agent of any Environmental Claim being made in connection with any of the Collateral Vessels or its operation;

(e) promptly notify the Administrative Agent of any claim for breach of the ISM Code being made in connection with any of the Collateral Vessels or its operation;

(f) promptly notify the Administrative Agent of any claim for breach of the ISPS Code being made in connection with any of the Collateral Vessels or its operation;

(g) give to the Administrative Agent from time to time on request such information, in sufficient copies (which may take the form of electronic copies) for all the Lenders, as the Administrative Agent may reasonably request regarding any of the Collateral Vessels, her employment, position and engagements;

 

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(h) provide the Administrative Agent with copies of the classification certificate of the Collateral Vessels and of all periodic damage or survey reports on any of the Collateral Vessels which the Administrative Agent may reasonably request;

(i) promptly furnish the Administrative Agent with full information of any casualty or other accident or damage to any of the Collateral Vessels involving an amount in excess of US$1,500,000 (or equivalent);

(j) give to the Administrative Agent and its duly authorized representatives reasonable access to any of the Collateral Vessels for the purpose of conducting on board inspections and/or surveys of such Collateral Vessel provided that (i) the Administrative Agent shall co-operate with the Borrower in respect of the timing for and the place where such surveys take place in order to minimize disruption to the activities of such Collateral Vessel, and (ii) unless a Default has occurred and is continuing or such on board inspection and/or survey demonstrates that a Default is continuing, such inspections and/or surveys shall (x) not occur more than one time during any calendar year and (y) not take place at the expense of the Borrower; and

(k) if the Administrative Agent reasonably believes an Event of Default may have occurred and the Administrative Agent specifies such Event of Default, furnish to the Administrative Agent from time to time upon reasonable request certified copies of the ship’s log in respect of any of the Collateral Vessels.

SECTION 5.22 Provision of further information. Each Obligor shall, and shall procure that the Manager shall, as soon as practicable following receipt of a request by the Administrative Agent, provide the Administrative Agent, with sufficient copies for all the Lenders, with any additional or further financial or other information relating to any of the Collateral Vessels, the Obligatory Insurances or to any other matter relevant to, or to any provision of, a Loan Document which the Administrative Agent may reasonably request. The Borrower will furnish to the Administrative Agent and each Lender prompt written notice of any change in the information provided in the Beneficial Ownership Certification delivered to such Lender that would result in a change to the list of beneficial owners identified in such certification.

SECTION 5.23 Management. Each Obligor shall, and shall procure that the Manager shall, ensure that at all times:

(a) the relevant Collateral Vessel is managed by the Manager; and

(b) no Manager shall terminate or materially vary (or agree to materially vary) the terms of its management.

There shall be no change in the Manager or appointment of an alternative manager unless such replacement or alternative manager is a Manager and the terms of its appointment are approved by the Administrative Agent, and, simultaneously with its appointment, the management agreement with such manager is assigned to the Security Trustee and the manager enters into a Manager’s Undertaking, each on substantially the same terms as applicable to the previous manager, and such other documents and evidence of the kind referred to in Section 4.01 and Section 4.02 in respect of the management arrangements are provided in respect of such replacement management arrangements.

SECTION 5.24 Charters. Each Vessel Owner shall be entitled to let its Collateral Vessels, pursuant to an Eligible Charter or other Charter, provided always that each Vessel Owner complies with the terms of this Agreement and the other Loan Documents (including the Concentration Limit Requirements) and:

 

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(a) if a Vessel Owner enters into a Charter in respect of a Collateral Vessel, it promptly notifies the Administrative Agent thereof;

(b) such Vessel Owner shall either promptly obtain the consent (if required) of the Charterer to the assignment of that Charter pursuant to the General Assignment or ensure that the terms of such Charter permit assignment of that Charter without consent;

(c) such Vessel Owner serves a notice of assignment upon the Charterer pursuant to the terms of the General Assignment and, if such Vessel Owner is party to a Charter with a term that exceeds twelve (12) months (including any extension options) such Vessel Owner shall obtain an acknowledgement from the Charterer (and such Vessel Owner shall use reasonable endeavors to obtain such acknowledgement in a signed writing as opposed to by email, which shall otherwise be acceptable if such Charterer refuses to provide such acknowledgement in a signed writing);

(d) Vessel Owners may only enter into bareboat or demise charters with Eligible Bareboat Charterers, as such term is defined in Schedule 2.02, and, prior to entering into any such bareboat or demise charter, the Borrower shall procure that a Charterer’s Undertaking is provided by the applicable Charterer (unless, after using commercially reasonable efforts to procure such Charterer’s Undertaking, the Borrower is unable to reach agreement with the relevant Charterer for the provision of such Charterer’s Undertaking and the Administrative Agent consents to the foregoing). In addition, the Borrower shall procure that any such bareboat or demise charter includes an undertaking from the Charterer to the effect that such Charterer will not permit the use or operation of the applicable Collateral Vessel (i) in any country or territory that at such time is the subject of Sanctions, or (ii) in any other manner that will result in a violation by any Person, the Finance Parties or any other person participating in the Program Debt (whether as underwriter, advisor, investor or otherwise) of Sanctions;

(e) Vessel Owners shall procure the prior written consent of the Administrative Agent for any charter where more than six (6) months charterhire is paid in advance;

(f) Vessel Owners shall procure the prior written consent of the Administrative Agent for any arrangement under which Earnings of any Collateral Vessel may be shared with anyone else; and

(g) Vessel Owners shall procure the prior written consent of the Administrative Agent for any charter with any Affiliate of the Guarantor or which is otherwise than on arm’s length terms.

SECTION 5.25 Termination of Eligible Charters. At all times until the Maturity Date, each Obligor shall advise the Administrative Agent of any of the following events:

(a) any breach (other than a technical breach which is cured promptly) by the relevant Charterer or the Vessel Owner of the terms of an Eligible Charter of which such Obligor becomes aware;

(b) the termination of an Eligible Charter by either the relevant Vessel Owner or the relevant Charterer; and

 

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(c) as soon as it becomes aware of such event, the occurrence of an insolvency event of the nature referred to in Section 7.01(f), (g), (h) or (j) in respect of a Charterer.

SECTION 5.26 Scope of Obligatory Insurances. Each Vessel Owner will, or in the case of a Collateral Vessel subject to a Charter which is a demise or bareboat charter, shall procure that the Charterer of such Collateral Vessel will, in respect of each Collateral Vessel:

(a) at all times for a Collateral Vessel, keep that Collateral Vessel insured in the applicable Required Insurance Amount, in Dollars in the name of the relevant Vessel Owner or in the joint names of the Vessel Owner, the Charterer (if such Collateral Vessel is subject to a Charter which is a demise or bareboat charter), the Manager (except if such Collateral Vessel is subject to a Charter which is a demise or bareboat charter to a person not a member of the Guarantor Group), any crewing agents (except if such Collateral Vessel is subject to a Charter which is a demise or bareboat charter to a person not a member of the Guarantor Group) and (if the Administrative Agent so requires) the Security Trustee (provided that all such Persons, other than the Security Trustee, any third party crewing agents (outside the Guarantor Group) and, in respect of protection and indemnity liability insurances only, any crewing agents within the Guarantor Group, have provided an assignment of their interests in such insurances to (i) the Security Trustee, or (ii) in the case of Collateral Vessels that are subject to a demise or bareboat charter, to the relevant Vessel Owner or the Security Trustee; provided further that in such cases, the terms of any assignment of insurances in favor of the relevant Vessel Owner shall expressly provide that the Vessel Owner shall assign its rights thereunder in favor of the Security Trustee, and the relevant Vessel Owner provides such onward assignment and assignment of its own interests in such insurances to the Security Trustee)) without the Administrative Agent or the Security Trustee being liable for but having the right to pay premiums, through brokers approved by the Administrative Agent against fire and usual marine risks (including hull and machinery and Excess Risks) with approved underwriters or insurance companies approved by the Administrative Agent and by policies in form and content approved by the Administrative Agent with a deductible which is a Required Deductible Amount or in an amount reasonably satisfactory to the Administrative Agent;

(b) at all times for a Collateral Vessel, keep that Collateral Vessel insured in the applicable Required Insurance Amount in the same manner as above against war risks (including risks of mines and all risks, whether or not regarded as war risks, London Blocking and Trapping Addendum and Lost Vessel clause, excepted by the free of capture and seizure clauses in the standard form of Lloyds marine policy) either:

(i) with underwriters or insurance companies approved by the Administrative Agent and by policies in form and content approved by the Administrative Agent; or

(ii) by entering the relevant Collateral Vessel in an approved war risks association,

and for the avoidance of doubt, such war risks insurance will include protection and indemnity liability up to at least the applicable Required Insurance Amount, excluding any liability in respect of death, injury or damage to crew, and shall include a deductible which is a Required Deductible Amount or in an amount reasonably satisfactory to the Administrative Agent;

(c) at all times for a Collateral Vessel, keep that Collateral Vessel entered in respect of her full value and tonnage in an approved protection and indemnity association against all risks as are normally covered by such protection and indemnity association (including pollution risks and the proportion not recoverable in case of collision under the running down clause inserted in the ordinary Lloyds policies), such cover for pollution risks to be for:

 

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(i) a minimum amount of US$1,000,000,000 or such other amount of cover against pollution risks as shall at any time be comprised in the basic entry of each Collateral Vessel with either a protection and indemnity association which is an acceptable member of either the International Group of protection and indemnity associations (or any successor organization designated by the Administrative Agent for this purpose) or the International Group (or such successor organization) itself; or

(ii) if the International Group or any such successor ceases to exist or ceases to provide or arrange any cover for pollution risks (or any supplemental cover for pollution risks over and above that afforded by the basic entry of each Collateral Vessel with its protection and indemnity association), such aggregate amount of cover against pollution risks as shall be available on the open market and by basic entry with a protection and indemnity association for ships of the same type, size, age and flag as each respective Collateral Vessel,

provided that, if any Collateral Vessel has ceased trading or is in lay up and in either case has unloaded all cargo, the level of pollution risks cover afforded by ordinary protection and indemnity cover available through a member of the International Group or such successor organization or, as the case may be, on the open market in such circumstances shall be sufficient for such purposes; and

(d) at all times for a Collateral Vessel, whenever any Collateral Vessel is trading to Japanese territorial waters and when so required by the Administrative Agent, maintain in full force and effect social responsibility insurance in respect of the Collateral Vessel with underwriters or insurance companies approved by the Administrative Agent and by policies in form and content approved by the Administrative Agent, provided always that a first class Vessel Owner or operator of vessels such as the Collateral Vessels would maintain and effect such social responsibility insurance.

SECTION 5.27 Obligatory Insurances. Without prejudice to its obligations under Section 5.26, each Vessel Owner will, or, in the case of a Collateral Vessel subject to a Charter which is a demise or bareboat charter to a person who is not a member of the Guarantor Group, shall procure that the Charterer of such Collateral Vessel will:

(a) not without the prior consent of the Administrative Agent materially alter any Obligatory Insurance nor make, do, consent or agree to any act or omission which would or might render any Obligatory Insurance invalid, void, voidable or unenforceable or render any sum paid out under any Obligatory Insurance repayable in whole or in part;

(b) not cause or permit any Collateral Vessel to be operated or traded in any way inconsistent with the provisions or warranties of, or implied in, or outside the cover provided by, or which would trigger the exclusion clause (or similar) under, any Obligatory Insurance or to be engaged in any voyage or to carry any cargo not permitted by any Obligatory Insurances without first covering the relevant Collateral Vessel in the relevant Required Insurance Amount and her freights for an amount approved by the Administrative Agent in Dollars or another approved currency with the Insurers;

(c) duly and punctually pay when due all premiums, calls, contributions or other sums of money from time to time payable in respect of any Obligatory Insurance;

(d) renew all Obligatory Insurances at least three (3) days before the relevant policies or contracts expire and procure that the approved brokers and/or war risks and protection and indemnity clubs and associations shall promptly confirm in writing to the Administrative Agent as and when each renewal is effected;

 

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(e) forthwith upon the effecting of any Obligatory Insurance, give written notice of the insurance to the Administrative Agent stating the full particulars (including the dates and amounts) of the insurance, and on request produce the receipts for each sum paid by it pursuant to paragraph (c) above;

(f) not settle, release, compromise or abandon any claim in respect of any Total Loss unless the Administrative Agent is satisfied that such release, settlement, compromise or abandonment will not prejudice the interests of the Finance Parties under or in relation to any Loan Document;

(g) arrange for the execution and delivery of such guarantees as may from time to time be required by any protection and indemnity or war risks club or association;

(h) procure that the interest of the Security Trustee is noted on all policies of insurance;

(i) procure that a loss payee provision in the form scheduled to the Insurances Assignment is endorsed on all policies of insurance relating to the Collateral Vessels;

(j) obtain from the relevant insurance brokers and P&I Club letters of undertaking in the forms scheduled to the Insurances Assignments; and

(k) in the event that the Vessel Owner (or, where applicable, the relevant Charterer of a Collateral Vessel which is subject to a Charter which is a demise or bareboat charter to a person who is not a member of the Guarantor Group) receives payment of any moneys under the Insurance Assignment, save as provided in the loss payable clauses scheduled to the Insurance Assignment, forthwith pay over the same to the Security Trustee and, until paid over, such moneys (to the extent they are held by any Obligor) shall be held in trust for the Security Trustee.

SECTION 5.28 Power of Administrative Agent to insure. If the Obligors (and/or, where applicable, the relevant Charterer(s) of a Collateral Vessel which is subject to a Charter which is a demise or bareboat charter to a person who is not a member of the Guarantor Group) fail to effect and keep in force Obligatory Insurances in accordance with this Agreement, it shall be permissible, but not obligatory, for the Administrative Agent to effect and keep in force insurance or insurances in the amounts required under this Agreement and entries in a protection and indemnity association or club and, if it deems necessary or expedient, to insure the war risks upon any Collateral Vessel, and the Borrower will reimburse the Administrative Agent for the costs of so doing.

SECTION 5.29 ISM Code. Each Vessel Owner shall, and shall procure that the Manager shall (or in the case of a Collateral Vessel which is subject to a Charter which is a demise or bareboat charter to a person who is not a member of the Guarantor Group, shall procure that the Charterer of such Collateral Vessel shall):

(a) at all times be responsible for compliance by itself and by each Collateral Vessel with the ISM Code; and

(b) at all times ensure that:

 

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(i) each Collateral Vessel has a valid Safety Management Certificate (as defined in the ISM Code);

(ii) each Collateral Vessel is subject to a safety management system (as defined in the ISM Code) which complies with the ISM Code; and

(iii) there is a valid Document of Compliance (as defined in the ISM Code), which is held on board the Collateral Vessel,

(c) and shall deliver to the Administrative Agent, a copy of a valid Safety Management Certificate and a valid Document of Compliance in respect of the relevant Collateral Vessel, in each case duly certified by an officer of the Borrower;

(d) promptly notify the Administrative Agent of any actual or, upon becoming aware of the same, threatened withdrawal of an applicable Safety Management Certificate or Document of Compliance;

(e) promptly notify the Administrative Agent of the identity of the person ashore designated for the purposes of paragraph 4 of the ISM Code and of any change in the identity of that person; and

(f) promptly upon becoming aware of the same notify the Administrative Agent of the occurrence of any material accident or major non-conformity (as defined in the ISM Code) requiring action under the ISM Code.

SECTION 5.30 ISPS Code. Each Obligor shall, and shall procure that the Manager shall, or, in the case of a Collateral Vessel subject to a Charter which is a demise or bareboat charter to a person who is not a member of the Guarantor Group, shall procure that the Charterer of such Collateral Vessel at all times shall:

(a) comply and be responsible for compliance by itself and by each Collateral Vessel with the ISPS Code; and

(b) ensure that:

(i) each Collateral Vessel has a valid International Ship Security Certificate;

(ii) each Collateral Vessel’s security system and its associated security equipment comply with section 19.1 of Part Appendix 1 of the ISPS Code;

(iii) each Collateral Vessel’s security system and its associated security equipment comply in all respects with the applicable requirements of Chapter XI-2 of SOLAS and Appendix 1 of the ISPS Code; and

(iv) an approved ship security plan is in place.

SECTION 5.31 Dry Docking. The Guarantor shall ensure that each Obligor shall meet all of that Obligor’s obligations with respect to the cost of scheduled dry docking in relation to the Collateral Vessel owned by such Obligor and that such costs are paid when due except those costs which are being disputed in good faith by appropriate proceedings (and for the payment of which adequate reserves have been provided or are and continue to be available).

 

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SECTION 5.32 Rating. If, following the Closing Date, the Obligors obtain a credit rating from a rating agency as required by any Program Debt, the Borrower shall, solely during the period for which such rating is required to be maintained by the applicable Program Debt, be required to maintain a rating with the relevant rating agency or any replacement rating agent selected by Borrower. For the avoidance of any doubt, the requirement to maintain a rating shall not be breached if the rating changes (upwards or downwards) and, if a rating is provided by a rating agency but, prior to its publication, the ratings process is withdrawn, the Borrower shall not be required to maintain such rating.

SECTION 5.33 Taxation.

(a) Each Obligor shall pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:

(i) such payment is being contested in good faith;

(ii) in each case to the extent required by GAAP, adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to the Administrative Agent under Section 5.01; and

(iii) such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse Effect.

(b) No Obligor (other than the Guarantor) may change its residence for Tax purposes except with the consent of the Administrative Agent, such consent not to be unreasonably withheld.

SECTION 5.34 Decarbonization Certificates

(a) The Borrower must supply to, or procure the supply to, the Administrative Agent on or before 10 Business Days prior to each Delta Test Date, in sufficient copies (which may take the form of an electronic copy) for the Lead Sustainability Coordinator and all Lenders:

(i) all Compliance Data in support of the Decarbonization Certificate to be delivered on the next in time Delta Test Date and such other information required by the Lead Sustainability Coordinator (requested by the Administrative Agent if so directed by or on behalf of the Lead Sustainability Coordinator) in order to populate the Draft DC (defined below) in accordance with sub-section 5.34(b), provided that where such Collateral Vessel is subject to a bareboat or demise charter with an Eligible Bareboat Charterer, the Borrower shall use reasonable efforts to obtain such Compliance Data from that Eligible Bareboat Charterer. Where the Borrower is unable to procure such Compliance Data after reasonable efforts, the Lead Sustainability Coordinator shall have reference to corresponding reasonable estimates for the applicable Delta Test Period obtained from a Classification Society at the Borrower’s cost, in place of any unavailable “Compliance Data” when calculating the AER and/or the Collateral Vessel Delta on the relevant Delta Test Date; and

(ii) the relevant extracts of the provisions of any Qualifying Charter Contract including a Sustainability Linked Charter Mechanism, certified by a Responsible Officer of the Borrower,

provided always that none of the Lenders shall publicly disclose such information delivered under this Section 5.34(a) with the identity of the relevant vessel without the prior written consent of the Borrower. For the avoidance of doubt, such information shall be “Confidential Information” for the purposes of Section 9.12 (Treatment of Certain Information; Confidentiality) but the Borrower acknowledges that, in accordance with the Poseidon Principles, such information will form part of the information published regarding each relevant Lender’s portfolio climate alignment,

 

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and provided further that if the Borrower fails to comply with the conditions set out in, or deliver when due any of the documents and/or items contemplated by, this Section 5.34, then no Default or Event of Default will result therefrom, and the only consequence shall be a pricing adjustment (if applicable) to the Margin as otherwise contemplated by this Agreement.

(b) Within 5 Business Days of receipt of the Compliance Data and any other information to be provided in accordance with Section 5.34(a) above, the Lead Sustainability Coordinator shall send to the Borrower, with a copy to the Administrative Agent, a draft (which may be in electronic form), of the populated Decarbonization Certificate to be delivered by the Borrower for the applicable Delta Test Period, on the next in time Delta Test Date ( “Draft DC”).

(c) Subject to any revisions and/or amendments to the Draft DC prepared by the Lead Sustainability Coordinator pursuant to Section 5.34(b) above being prior agreed in writing between the Administrative Agent, the Lead Sustainability Coordinator and the Borrower (the “Amended Draft DC”), on or before 2 Business Days before such next in time Delta Test Date, the Borrower must supply to, or procure the supply to, the Administrative Agent in sufficient copies (which may take the form of an electronic copy) for the Lead Sustainability Coordinator and all Lenders, a completed Decarbonization Certificate for the applicable Delta Test Period, in a form reflective of either the Draft DC or Amended Draft DC, as applicable, and which is signed by a Responsible Officer of the Borrower.

(d) Notwithstanding anything in this Agreement to the contrary, the Lead Sustainability Coordinator shall not:

(i) have any duty to verify and/or confirm the accuracy of any information, calculations and/or other details (including but not limited to any Compliance Data provided to it in accordance with this Section 5.34) included and/or reflected in any Draft DC, Amended Draft DC and/or Decarbonization Certificate; and

(ii) shall not be liable to the Borrower or any other party for:

(A) any inaccuracies or errors in such information, calculations and/or other details (including but not limited to transposing any Compliance Data provided to it in accordance with this Section 5.34) included and/or reflected in any Draft DC, Amended Draft DC and/or Decarbonization Certificate; and/or

(B) any failure to deliver, or delay in delivering, a Draft DC to and/or any failure to agree, or delay in agreeing an Amended DC with, the Borrower and the Administrative Agent in accordance with this Section 5.34, if such failure and/or delay in delivering any Draft DC and/or agreeing any Amended DC, arises as a result of, or in connection with, the Borrower’s (x) failure to deliver and/or delay in delivering, any Compliance Data and/or other information required by the Lead Sustainability Coordinator and/or a Decarbonization Certificate, and/or (y) failure to agree, or delay in agreeing, any Amended DC, in each case in accordance with the terms of this Section 5.34,

 

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and the Borrower hereby confirms and acknowledges for the benefit of the Lead Sustainability Coordinator, that notwithstanding any of the provisions of this Agreement, the contents of any Decarbonization Certificate, signed by a Responsible Officer of the Borrower and delivered in accordance with this Section 5.34, shall be verified by the Borrower only, and shall be true and accurate in all material respects.

ARTICLE VI

NEGATIVE COVENANTS

Until the Commitments have expired or been terminated, all Obligations have been paid in full and all Letters of Credit have expired or been canceled (without any pending drawings), the Borrower covenants and agrees with the Lenders that:

SECTION 6.01 Security Interests. Each Obligor shall not, and each Obligor shall procure that the Manager does not, create or permit to subsist any Security Interest over the Obligatory Insurances or any other Security Assets or any Related Contract other than:

(a) Permitted Liens; or

(b) with the prior written consent of the Administrative Agent.

SECTION 6.02 Mergers. No Obligor (other than the Guarantor) shall enter into any amalgamation, demerger, merger or corporate reconstruction (other than intercompany mergers and amalgamations which would not otherwise lead to a contravention of this Agreement or any other Loan Document).

SECTION 6.03 Special Purpose Covenants. Unless otherwise stated, references to “Obligor” in this Section 6.03 shall be deemed, for this Section only, to exclude the Guarantor:

(a) No Obligor shall have any employees.

(b) No Obligor shall enter into any contract or agreement with any Person, or conduct any business, or otherwise create or incur any liability to any Person, other than in connection with the acquisition, chartering and disposition of the Security Assets, the making of Loans or otherwise as permitted by the Loan Documents and activities ancillary thereto.

(c) No Obligor shall incur any Indebtedness other than (i) Indebtedness normally associated with the day to day operation of the Collateral Vessels, or otherwise in the normal course of business, (ii) Indebtedness under the Related Contracts and the Loan Documents, (iii) Indebtedness under Intra Group Loans.

(d) No Obligor (other than the Guarantor) shall principally engage in any business other than the direct or indirect ownership, operation and chartering of container vessels and any business incidental or related thereto. The Guarantor shall not principally engage in any business other than the direct or indirect ownership, operation and chartering of seagoing vessels and any business incidental or related thereto.

(e) No Obligor shall own, or otherwise have title to, any deposit account or securities account other than the Charged Accounts.

(f) No Obligor shall create or own any Subsidiary except, in the case of the Borrower, any Vessel Owner.

 

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(g) No Obligor shall be party to any Intra Group Loan Agreement unless the lender under such Intra Group Loan Agreement has fully subordinated its rights thereunder and provided certain other undertakings in accordance with Section 5.02 of the Intercreditor Agreement and, in no circumstances, shall the maturity date in respect of any such Intra Group Loan occur on or prior to the Maturity Date.

SECTION 6.04 Payment of dividends. No Obligor shall pay any dividends or make any other distributions (whether by loan or otherwise) to shareholders unless, (a) under Applicable Law and accounting principles in its jurisdiction of incorporation, it is entitled to pay such dividends or make such other distribution, and (b) no Default has occurred and is continuing.

SECTION 6.05 Vessel Substitutions. A Vessel Owner may not substitute a Collateral Vessel with one or more vessels (each a “Substitute Vessel”) unless such vessel substitution is completed subject to and in accordance with the following conditions:

(a) the Borrower provides notice thereof at least five (5) Business Days prior to the date that it wishes the Substitute Vessel to become a Collateral Vessel and the existing Collateral Vessel to be released as a Collateral Vessel;

(b) each Substitute Vessel satisfies the requirements for being a Collateral Vessel hereunder and, on the date on which it becomes a Collateral Vessel, the Administrative Agent shall receive all conditions precedent it would be entitled to receive under Article IV in form and substance satisfactory to the Administrative Agent;

(c) the Borrower provides a Compliance Certificate evidencing such substitution will not give rise to a Default, a Concentration Limit Event, a breach of the Guarantor Financial Covenants, a BB Event or a DSCR Cash Sweep Event, assuming for the purposes of the calculation of such requirements that the substitution had taken place, and no such event shall be continuing; and

(d) such Substitute Vessel shall become a Collateral Vessel on the same date as the existing Collateral Vessel ceases to be a Collateral Vessel for the purposes of the Loan Documents.

SECTION 6.06 Vessel Dispositions and Removals. A Vessel Owner may not sell or dispose of a Collateral Vessel (a “Vessel Disposition”) unless the Vessel Disposition is completed subject to and in accordance with the following conditions:

(a) the Administrative Agent shall have received five (5) Business Days’ prior written notice (a “Disposition Notice”) of any such Vessel Disposition from the Borrower, and such Disposition Notice shall specify the proposed date of the Vessel Disposition, the relevant Collateral Vessel subject of the Vessel Disposition, the proposed buyer, the purchase price, levels of cash deposit and/or letter of credit provided by or on behalf of the proposed buyer and the anticipated Net Sale Proceeds (it being acknowledged that such information may change);

(b) such Vessel Disposition shall not be permitted if, after giving effect to the application of the proceeds thereof, a Default, Concentration Limit Event, breach of the Guarantor Financial Covenants, BB Event or DSCR Cash Sweep Event would occur;

 

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(c) such Vessel Disposition shall not be permitted at any time when a Default, a Concentration Limit Event, a breach of the Guarantor Financial Covenants, a BB Event or a DSCR Cash Sweep Event is continuing, unless such Vessel Disposition or the application of the proceeds thereof would cure such Default, Concentration Limit Event, breach of the Guarantor Financial Covenants, BB Event or DSCR Cash Sweep Event, as applicable; and

(d) the Administrative Agent shall have received no later than three (3) Business Days prior to the date of such Vessel Disposition a written confirmation from the Borrower:

(i) confirming that such Vessel Disposition is proceeding;

(ii) confirming the date on which such Vessel Disposition is scheduled to be completed (it being acknowledged that such date may change);

(iii) incorporating a representation and warranty from the Borrower in connection with the matters referred to in subsections (b), (c) and (d) above and certifying the BB Ratio and DSCR Ratio following such Vessel Disposition (including the supporting calculations).

In addition, a Vessel Owner may from time to time designate any Collateral Vessel to cease to be a Collateral Vessel, and thereby cause such Vessel to cease to be subject to the terms and conditions of this Agreement, so long as the Vessel Owner would be permitted pursuant to the above provisions to sell or dispose of such Collateral Vessel in circumstances where the proceeds thereof are zero, assuming that all references to any disposition of such Collateral Vessel pursuant to the above provisions referred instead to its removal as a Collateral Vessel.

SECTION 6.07 Year end. No Obligor shall change its financial year end except with prior notice to the Administrative Agent and, in the case of any Obligor other than the Guarantor, prior consent of the Administrative Agent (not to be unreasonably withheld or delayed).

SECTION 6.08 Related Contracts. Subject to Obligors’ right to release, substitute and dispose of Collateral Vessels, no Obligor shall take any action, enter into any document or agreement or omit to take any action or to enter into any document or agreement which would, or could reasonably be expected to, cause any Obligatory Insurances or Management Agreement to cease to remain in full force and effect and shall use commercially reasonable efforts to procure that each other party to such Related Contract does not take any action, enter into any document or agreement or omit to take any action or to enter into any document or agreement which would, or could reasonably be expected to, cause such Related Contract to cease to remain in full force and effect.

SECTION 6.09 Financial Covenants.

(a) Borrowing Base Ratio. If on any BB Test Date it is determined that a BB Event has occurred and is continuing, the Borrower shall, on the next Payment Date, prepay the Loan in accordance with Section 4.02(a)(viii) of the Intercreditor Agreement; provided that the Borrower shall be permitted to deposit or pledge Additional Security pursuant to Section 6.10 in an amount sufficient to ensure that a BB Event is not continuing after giving effect to such pledge or deposit.

(b) Debt Service Coverage Ratio. On any Test Date a DSCR Cash Sweep Event shall occur if the DSCR Ratio is less than 1.25:1.

(c) Consolidated Tangible Net Worth. The Guarantor must ensure that its Consolidated Tangible Net Worth always equals or exceeds four hundred and fifty million Dollars ($450,000,000).

 

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(d) Gearing. The Guarantor must ensure that its Total Borrowings are always less than 65% of its Total Assets.

(e) Interest and Principal Coverage Ratio. The Guarantor must ensure that its Interest and Principal Coverage Ratio is always greater than or equal to 1.1:1.

(f) Guarantor Cross Default. The Guarantor must ensure its Indebtedness is paid when due (having due regard to any applicable grace period), provided that it shall not be a breach of this subsection if the Guarantor fails to pay its Indebtedness when due but the aggregate amount of such Indebtedness is less than $50,000,000 or its equivalent.

Each of the Guarantor Financial Covenants set forth in Sections 6.09(c) to (f) (inclusive) above shall be tested on each Determination Date by reference to each rolling twelve (12) month Measurement Period, and compliance shall be evidenced in the Compliance Certificates.

SECTION 6.10 Creation of Additional Security. The value of any additional security which the Borrower offers to provide pursuant to Section 6.09(a) will only be taken into account for the purposes of determining the BB Ratio if and when:

(a) that additional security, its value and the method of its valuation have been approved by the Administrative Agent (and, where required, the holders of any Additional Secured Debt), provided that (i) cash and (ii) any vessel which could be a Substitute Vessel (by meeting the criteria set forth in Section 6.05 and said conditions are met (other than, for the avoidance of doubt, the removal of any Collateral Vessel)), shall be approved additional security;

(b) a Security Interest over that security has been constituted in favor of the Security Trustee in an approved form and manner;

(c) the Loan Documents have been unconditionally amended in such a manner as the Administrative Agent and Borrower reasonably agree in consequence of that additional security being provided; and

(d) the Administrative Agent, or its duly authorized representative, has received such documents and evidence it may reasonably require in relation to that amendment and additional security including documents and evidence of the type referred to in Article IV in relation to that amendment and additional security and its execution and (if applicable) registration.

SECTION 6.11 No amendment to Related Contracts. No Obligor shall amend or agree to any material amendment to the Obligatory Insurances or the Management Agreements without the prior written consent of the Administrative Agent.

SECTION 6.12 Anti-corruption law. (a) Each Obligor and its Subsidiaries shall conduct their business in compliance with Anti-Corruption Laws; and (b) Each Obligor shall ensure that no proceeds of the Program Debt will be applied in a manner or for a purpose prohibited by Anti-Corruption Laws.

SECTION 6.13 Sanctions. (a) Each Obligor shall ensure that no proceeds of the Program Debt will be made available, directly or indirectly, to or for the benefit of, or used to fund any activities with or business of a Sanctioned Person, or in any country territory that, at the time of such funding, is the subject of Sanctions, or otherwise applied in a manner or for a purpose prohibited by Sanctions or Anti-Corruption Laws, or which would result in a violation of Sanctions by any person

 

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(including any person participating in the Program Debt, whether as underwriter, advisor, investor, lender, hedge provider, facility or security agent or otherwise); (b) each Obligor and its Subsidiaries shall remain in compliance with all Sanctions and shall implement a policy for Sanctions in line with the requirements in this Agreement; (c) no Obligor nor their respective Subsidiaries shall fund all or part of any repayment required to be made pursuant to Program Debt out of proceeds directly or indirectly derived from any business, activities or transactions which would be prohibited by Sanctions or which would otherwise cause any Person or a Lender to be in breach of Sanctions or to otherwise become the subject or target of Sanctions; (d) no Obligor nor their respective Subsidiaries shall (and shall procure that no Charterer of any Collateral Vessel will) operate, possess, use, dispose of or otherwise deal with, or procure or allow the ownership, operation, possession, use, disposal of or any other dealing with, each Collateral Vessel or part thereof for any purpose or to any person which would violate or cause any Finance Party to violate, when and as applicable, any Sanctions, any anti-terrorism law or any anti-corruption law in each case applicable to it; and (e) no Obligor will permit the use or operation of any Collateral Vessel (i) in any country or territory that at such time is the subject of Sanctions, (ii) by a Sanctioned Person, or (iii) in any other manner that will result in a violation by any Person, the Finance Parties or any other person participating in the Program Debt (whether as underwriter, advisor, investor or otherwise) of Sanctions.

SECTION 6.14 Additional Secured Debt. Each Obligor shall ensure that the terms of any Program Debt Documents (or any amendments thereto and restatements thereof) entered into after the date hereof (other than terms related to interest rates and fees), shall (i) not be on more beneficial terms to the relevant Secured Parties thereunder than the terms of the Loan Documents are to the Finance Parties, and (ii) if such Additional Secured Debt shall be of the same facility or debt instrument type as the Obligations arising hereunder (excluding in respect of any revolving credit facility), not amortize more quickly, or have a shorter term, than the Obligations (unless prior to the effectiveness of such Program Debt Document or its amendment and/or restatement, such amendments are made to the Loan Documents to ensure the terms of the Loan Documents are at least as favorable as the terms of the relevant Program Debt Documents).

ARTICLE VII

EVENTS OF DEFAULT

SECTION 7.01 Events of Default. If any of the following events (each, an “Event of Default”) shall occur:

(a) any Obligor shall fail to pay any amount payable by it under the Loan Documents in the manner required under the Loan Documents, unless the non-payment is remedied within three Business Days of the due date;

(b) an Obligor shall fail to comply with any term of Sections 3.22, 5.26, 5.27(a), (b), (c) and (f), 6.01, 6.03, 6.09(c) to (e), 6.12 and 6.13;

(c) an Obligor shall fail to comply with any other term of the Loan Documents not already referred to in Section 7.01(b) above (excluding Section 5.34), unless the non-compliance: (i) is capable of remedy; and (ii) is remedied within thirty (30) days (or, in the case of Section 5.06(a), three (3) Business Days) of the earlier of (i) the date on which written notice of such failure is delivered to Guarantor and (ii) any Obligor having knowledge of such failure to comply;

 

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(d) a representation made or repeated by an Obligor in any Loan Document or in any document delivered by or on behalf of the Obligor under any Loan Document is incorrect in any material respect when made or deemed to be repeated, unless the circumstances giving rise to the misrepresentation: (i) are capable of remedy; and (ii) are remedied within thirty (30) days of the earlier of (i) the date on which written notice of such misrepresentation is delivered to Guarantor and (ii) any Obligor having knowledge of such misrepresentation;

(e) a BB Event shall occur and continue uncured for more than six (6) months;

(f) any of the following occurs in respect of an Obligor: (i) any of its Indebtedness is not paid when due (after the expiry of any originally applicable grace period); (ii) any of its Indebtedness: (A) becomes prematurely due and payable; or (B) is placed on demand; or (C) is capable of being declared by a creditor to be prematurely due and payable or being placed on demand, in each case, as a result of an event of default (howsoever described) and after the expiry of any applicable grace period; or (iii) any commitment for its Indebtedness is cancelled or suspended as a result of an event of default (howsoever described), unless, in the case of the Guarantor, the aggregate amount of Indebtedness falling within (i) to (iii) above is less than US$50,000,000 or its equivalent;

(g) any of the following occurs in respect of an Obligor: (i) it is deemed for the purposes of any Applicable Law to be, unable to pay its debts as they fall due or insolvent; (ii) it admits its inability to pay its debts as they fall due; (iii) it suspends making payments on any of its debts or announces an intention to do so; or (iv) a moratorium is declared in respect of any of its indebtedness, provided that if a moratorium occurs in respect of an Obligor, the ending of the moratorium will not remedy any Event of Default caused by the moratorium;

(h) any of the following occurs in respect of an Obligor: (i) any step is taken with a view to a moratorium, a composition, assignment or similar arrangement with any of its creditors; (ii) a meeting of its shareholders, directors or other officers is convened for the purpose of considering any resolution to petition for or to file documents with a court for its winding-up, administration or dissolution or any such resolution is passed; (iii) any person presents a petition, or files documents with a court for its winding-up, administration or dissolution; (iv) an order for its winding-up, administration or dissolution is made; (v) any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, receiver and manager, administrative receiver, administrator or similar officer is appointed in respect of it or any of its assets; (vi) its directors, shareholders or other officers request the appointment of or give notice of their intention to appoint a liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, receiver and manager, administrative receiver, administrator or similar officer; or (vii) any other analogous step or procedure is taken or appointment is made in any jurisdiction, provided that subsections (i) to (vii) above shall not apply to a frivolous or vexatious petition for winding-up presented by a creditor in respect of an Obligor which is being contested in good faith and with due diligence and is discharged or struck out within, in the case of an Obligor (other than Guarantor), thirty (30) days or, in the case of the Guarantor, sixty (60) days;

(i) any attachment, sequestration, distress, execution, enforcement action or analogous event affects any asset(s) of the Obligors and, in relation to the Guarantor only, the same is not discharged or stayed pending appeal within sixty (60) days;

(j) an Obligor suspends, ceases, or threatens to suspend, cease, to carry on all or, in the case of the Guarantor, a material portion of its business, provided that lay-up of a Collateral Vessel or other action in the ordinary course of business shall not constitute a suspension of business by a Vessel Owner for these purposes;

 

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(k) (i) an Obligor (other than Guarantor) fails to comply with or pay any sum due from it under any final judgment or any final order made or given by any court of competent jurisdiction in a non-appealable judgment or order with respect to which the amount in controversy exceeds $25,000 or (ii) Guarantor fails to comply with or pay any sum due from it under any final judgment or any final order made or given by any court of competent jurisdiction in a non-appealable judgment or order with respect to which the amount in controversy exceeds $50,000,000;

(l) the Borrower ceases to be a direct wholly owned Subsidiary of the Guarantor;

(m) any Obligor (other than the Borrower or the Guarantor) ceases to be a wholly owned subsidiary of the Borrower, except in connection with a permitted disposal of a Collateral Vessel in accordance with the Loan Documents;

(n) it is or becomes unlawful for an Obligor to perform any of its material obligations under the Loan Documents or any Related Contract as a result of the act or inaction of an Obligor; or any material provision of a Loan Document is not effective or is alleged by the Borrower to be ineffective for any reason; or any material provision of a Loan Document is not effective or is alleged by any Party (other than a Finance Party, the Borrower or the Account Bank) to be ineffective for any reason; or an Obligor repudiates any material provision of a Loan Document or evidences an intention to repudiate any material provision of a Loan Document; or any Party (other than a Finance Party or the Account Bank) repudiates or rescinds any material provision of a Loan Document or evidences an intention to repudiate or rescind any material provision of a Loan Document;

(o) any of the Security Documents ceases to be valid in any material respect or any of those Security Documents creating a Security Interest in favor of the Security Trustee ceases to provide a perfected first priority security interest in favor of the Security Trustee as a result of the act or inaction of an Obligor, provided that no Event of Default shall occur under this provision (i) if (A) the applicable Security Documents relate to certain Collateral Vessels only and the Asset Values of such Collateral Vessels account for no more than seven point five per cent. (7.5%) of the aggregate Asset Values of all Collateral Vessels, and (B) the Borrower remedies such circumstances within 10 days (and during such period the Borrower is diligently taking action to remedy such circumstances), or (ii) if, on the date any Security Document to which a Collateral Vessel or the applicable Vessel Owner is subject ceases to be valid in any material respect or any Security Document creating a Security Interest in such Collateral Vessel or the applicable Vessel Owner in favor of the Security Trustee ceases to provide a perfected first priority security interest in favor of the Security Trustee in such Collateral Vessel or the applicable Vessel Owner, such Collateral Vessel is subject to a Vessel Disposition or otherwise ceases to be a Collateral Vessel under and in accordance with the provisions of Sections 6.05 or 6.06;

 

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(p) [Reserved];

(q) the registration of any Collateral Vessel at the registry of any Approved Flag State is cancelled or any Collateral Vessel is arrested or otherwise detained and such Collateral Vessel is not released within thirty (30) days, provided that no Event of Default shall occur under this provision (i) if (A) the applicable circumstances relate to certain Collateral Vessels only and the Asset Values of such Collateral Vessels account for no more than ten per cent. (10%) of the aggregate Asset Values of all Collateral Vessels, and (B) the Borrower remedies such circumstances within 10 days (and during such period the Borrower is diligently taking action to remedy such circumstances), which period shall, in the case of any arrest or detention be in addition to the thirty (30) day period above, or (ii) if, on the date of the applicable cancellation in the case of any cancellation of the registration of any Collateral Vessel at the registry of any Approved Flag State or prior to the expiry of the thirty (30) day in the case of arrest or detention of a Collateral Vessel, such Collateral Vessel is subject to a Vessel Disposition or otherwise ceases to be a Collateral Vessel under and in accordance with the provisions of Sections 6.05 or 6.06;

(r) any Obligor, or anyone acting through an Obligor, makes any withdrawal from, or instructs an Account Bank to make any payment from, any Charged Account, other than in accordance with article IV of the Intercreditor Agreement;

(s) any other event or circumstance occurs which gives rise to a Material Adverse Effect;

then, and in every such event (other than an event with respect to the Borrower described in clause (g) or (h) of this Section), and at any time thereafter during the continuance of such event, the Administrative Agent may (but without any obligation to do so), and at the request of the Required Lenders shall, by notice to the Borrower, take any or all of the following actions, at the same or different times:

(i) terminate the Commitments, and thereupon the Commitments shall terminate immediately;

(ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other Obligations of the Borrower accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower;

(iii) require that the Borrower Cash Collateralize the L/C Obligations as provided in Section 2.19(a); and

(iv) exercise on behalf of itself, the Lenders and the Issuing Banks all rights and remedies available to it, the Lenders and the Issuing Banks under the Loan Documents and/or in respect of the Security Assets;

provided that, in case of any event with respect to the Borrower described in clause (g) or (h) of this Section, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other Obligations accrued hereunder, shall automatically become due and payable, and the obligation of the Borrower to Cash Collateralize the L/C Obligations as provided in clause (iii) above shall automatically become effective, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

 

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ARTICLE VIII

AGENCY

SECTION 8.01 Appointment and Authority. Each of the Lenders and the Issuing Banks hereby irrevocably appoints the Administrative Agent to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The Administrative Agent shall, unless a contrary indication appears in a Loan Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Administrative Agent in accordance with any instructions given to it by (a) all Lenders or the relevant proportion of the Lenders if the relevant Loan Document stipulates the matter is, as applicable, an all Lender decision or a decision requiring some specified proportion of the Lenders and (b) in all other cases, the Required Lenders. Except as otherwise provided in Section 8.06(b), the provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Banks, and the Borrower shall not have rights as a third-party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan Document (or any other similar term) with reference to the Administrative Agent 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.

SECTION 8.02 Rights as a Lender. The Person serving as the Administrative Agent hereunder shall, if applicable, have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity, if applicable. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for, and generally engage in any kind of business with, the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

SECTION 8.03 Exculpatory Provisions.

(a) The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent:

(i) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(ii) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or Applicable Law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and

 

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(iii) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

(b) The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 8.01 and 9.02), or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent in writing by the Borrower, a Lender or an Issuing Bank.

(c) The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

(d) If a payment is made by the Administrative Agent (or its Affiliates) in error or if a Lender or another recipient of funds is not otherwise entitled to receive such funds, then such Lender or recipient shall promptly following demand, but in any event not later than two Business Days following such demand, repay to the Administrative Agent the portion of such payment that was made in error (or otherwise not intended to be received) in same day funds, together with interest thereon in respect of each day from and including the date such amount was made available by the Administrative Agent (or its Affiliate) to such Lender or recipient to the date such amount is repaid to the Administrative Agent in same day funds at the applicable overnight rate from time to time in effect. Each Lender and other party hereto waives the discharge for value defense in respect of any such payment.

SECTION 8.04 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance, extension, increase, reinstatement or renewal of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an Issuing Bank, the Administrative Agent may presume that such condition is satisfactory to such Lender or Issuing Bank unless the Administrative Agent shall have received notice to the contrary from such Lender or Issuing Bank prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

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SECTION 8.05 Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

SECTION 8.06 Resignation of Administrative Agent.

(a) The Administrative Agent may at any time give notice of its resignation to the Lenders, the Issuing Banks and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in New York, New York, or an Affiliate of any such bank with an office in New York, New York. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall not be obligated to), on behalf of the Lenders and the Issuing Banks, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that in no event shall any such successor Administrative Agent be a Defaulting Lender. Whether or not a successor has been appointed, such resignation of such retiring Administrative Agent shall become effective in accordance with such notice on the Resignation Effective Date.

(b) With effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (i) the retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents and (ii) except for any indemnity payments owed to the retiring or removed Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and Issuing Bank directly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring or removed Administrative Agent (other than any rights to indemnity payments owed to the retiring or removed Administrative Agent), and the retiring or removed Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring or removed Administrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Article and Section 9.03 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Administrative Agent was acting as Administrative Agent.

 

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SECTION 8.07 Non-Reliance on Agents and Other Lenders. Each Lender and Issuing Bank acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Agent or Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and Issuing Bank also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

SECTION 8.08 No Other Duties. Anything herein to the contrary notwithstanding, the Structuring Agent, the Global Coordinator, the Mandated Lead Arrangers and the Co-Sustainability Coordinators, each listed on the cover page hereof, shall not have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or an Issuing Bank hereunder.

SECTION 8.09 Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to the Borrower, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Banks and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Issuing Banks and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the Issuing Banks and the Administrative Agent under Section 9.03) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and Issuing Bank to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the Issuing Banks, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Section 9.03.

SECTION 8.10 Intercreditor Agreement

Each of the Lenders, each Issuing Bank and each Hedge Counterparty hereby instructs the Administrative Agent to enter into the Intercreditor Agreement and agrees, for the enforceable benefit of all holders of all existing and future Secured Obligations and each existing and future Secured Lien Representative, to each of the matters set out in paragraphs (1) to (3) of the definition of Lien Sharing and Priority Confirmation in the Intercreditor Agreement.

 

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ARTICLE IX

MISCELLANEOUS

SECTION 9.01 Notices; Public Information.

(a) Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile or email as follows:

(i) if to the Borrower, to it at Unit 2, 16/F., W668 Building, Nos. 668 Castle Peak Road, Cheung Sha Wan, Kowloon, Hong Kong, China, Attention of Chief Financial Officer (Facsimile No. +852 3010 1868; Telephone No. +852 3588 9400; Email: gtalbot@atlascorporation.com and legal@seaspanltd.ca);

(ii) if to the Guarantor, to it at Unit 2, 16/F., W668 Building, Nos. 668 Castle Peak Road, Cheung Sha Wan, Kowloon, Hong Kong, China, Attention of Chief Financial Officer (Facsimile No. +852 3010 1868; Telephone No. +852 3588 9400; Email: gtalbot@atlascorporation.com and legal@seaspanltd.ca);

(iii) if to the Administrative Agent, to Citibank, N.A. at Citibank Delaware, 1615 Brett Road, OPS III, New Castle, DE 19720, USA, Attention of Agency Operations (Facsimile No. +1 (646) 274-5080; Telephone No. +1 (302) 894-6010; Email: GlAgentOfficeOps@Citi.com);

(iv) if to any Issuing Bank, to it at the address provided in writing to the Administrative Agent and the Borrower at the time of its appointment as an Issuing Bank hereunder; and

(v) if to a Lender, to it at its address (or facsimile number or email address) set forth in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications, to the extent provided in paragraph (b) below, shall be effective as provided in said paragraph (b).

(b) Electronic Communications. Notices and other communications to the Lenders and the Issuing Banks hereunder may be delivered or furnished by electronic communication (including e-mail, FpML, and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or Issuing Bank pursuant to Article II if such Lender or Issuing Bank, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

 

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Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its e-mail address as described in the foregoing clause (i), of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.

(c) Change of Address, etc. Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto.

(d) Platform.

(i) The Borrower agrees that the Administrative Agent may, but shall not be obligated to, make the Communications (as defined below) available to the Issuing Banks and the other Lenders by posting the Communications on the Platform.

(ii) The Platform is provided “as is” and “as available.” The Agent Parties (as defined below) do not warrant the adequacy of the Platform and expressly disclaim liability for errors or omissions in the Communications. No warranty of any kind, express, implied or statutory, including any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Communications or the Platform. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Borrower, any Lender or any other Person or entity for damages of any kind, including direct or indirect, special, incidental or consequential damages, losses or expenses (whether in tort, contract or otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of communications through the Platform. “Communications” means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of the Borrower pursuant to any Loan Document or the transactions contemplated therein that is distributed to the Administrative Agent, any Lender or any Issuing Bank by means of electronic communications pursuant to this Section, including through the Platform.

(e) [Reserved]

SECTION 9.02 Waivers; Amendments.

(a) No Waiver; Remedies Cumulative; Enforcement. No failure or delay by the Administrative Agent, any Issuing Bank or any Lender in exercising any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege, or any abandonment or discontinuance of steps to enforce such a right remedy, power or privilege, preclude any other or further exercise thereof or the exercise of any other right remedy, power or privilege. The rights, remedies, powers and privileges of the Administrative Agent, the Issuing Banks and the Lenders hereunder and under the Loan Documents are cumulative and are not exclusive of any rights, remedies, powers or privileges that any such Person would otherwise have.

 

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Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Obligors (and to direct instruct the Security Trustee in accordance with the Intercreditor Agreement) shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 8.01 for the benefit of all the Lenders and the Issuing Banks; provided that the foregoing shall not prohibit (i) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (ii) each Issuing Bank from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as an Issuing Bank) hereunder and under the other Loan Documents, (iii) any Lender from exercising setoff rights in accordance with Section 9.08 (subject to the terms of Section 2.12) or (iv) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to the Borrower under any Debtor Relief Law; provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (x) the Required Lenders shall have the rights otherwise provided to the Administrative Agent pursuant to Section 8.01 and (y) in addition to the matters set forth in clauses (ii), (iii) and (iv) of the preceding proviso and subject to Section 2.12, any Lender may, with the consent of the Required Lenders, enforce any rights or remedies available to it and as authorized by the Required Lenders.

(b) Amendments, Etc. Except as otherwise expressly set forth in this Agreement, no amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower therefrom, shall be effective unless in writing executed by the Guarantor, the Borrower and the Required Lenders, and acknowledged by the Administrative Agent, or by the Guarantor, the Borrower and the Administrative Agent with the consent of the Required Lenders, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided that no such amendment, waiver or consent shall:

(i) extend or increase any Commitment of any Lender without the written consent of such Lender (it being understood that a waiver of any condition precedent set forth in Article IV or the waiver of any Default shall not constitute an extension or increase of any Commitment of any Lender);

(ii) reduce the principal of, or rate of interest specified herein on, any Loan or any L/C Disbursement, or any fees or other amounts payable hereunder or under any other Loan Document, without the written consent of each Lender directly and adversely affected thereby (provided that only the consent of the Required Lenders shall be necessary (x) to amend the definition of “Default Rate” or to waive the obligation of the Borrower to pay interest at the Default Rate or (y) to amend any financial covenant (or any defined term directly or indirectly used therein), in each case even if the effect of such amendment would be to reduce the rate of interest on any Loan or other Obligation or to reduce any fee payable hereunder);

(iii) postpone any date scheduled for any payment of principal of, or interest on, any Loan or any L/C Disbursement, or any fees or other amounts payable hereunder or under any other Loan Document, or reduce the amount of, waive or excuse any such payment, without the written consent of each Lender directly and adversely affected thereby;

 

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(iv) change Section 2.12 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender directly and adversely affected thereby;

(v) waive any condition set forth in Article IV without the written consent of, in the case of any condition set forth in Section 4.01, Section 4.02(h) and Section 4.04(e), each Lender and, in the case of any other condition set forth in Article IV, the consent of the Required Lenders but as if the reference in the definition of Required Lenders to “50%” referred to “662/3%”;

(vi) change Section 2.05(d) in a manner that would permit the expiration date of any Letter of Credit to occur after the Commitment Termination Date without the consent of each Lender;

(vii) waive or amend any provision of Sections 3.22, 6.12 or 6.13 and any related sanctions definitions therein without the consent of each Lender; or

(viii) change any provision of this Section or the percentage in the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender;

provided, further, that no such amendment, waiver or consent shall amend, modify or otherwise affect the rights or duties hereunder or under any other Loan Document of (A) the Administrative Agent, unless in writing executed by the Administrative Agent, (B) any Issuing Bank, unless in writing executed by such Issuing Bank, and (C) any Hedge Counterparty, unless in writing executed by such Hedge Counterparty, in each case in addition to the Borrower and the Lenders required above, provided that the consent of any Hedge Counterparty shall only be required in these circumstances if the applicable Hedge Counterparty or an Affiliate of that Hedge Counterparty is a Lender and if the applicable amendment, waiver or consent has the effect of (1) changing the position or priority of any Hedge Counterparty in the application of payments as set out in Section 4.02 of the Intercreditor; (2) changing the entitlement of any Hedge Counterparty to share in the Collateral and/or its interest therein; or (3) imposing an obligation on any Hedge Counterparty.

Notwithstanding anything herein to the contrary, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent that by its terms requires the consent of all the Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders, except that (x) the Commitment of any Defaulting Lender may not be increased or extended, or the maturity of any of its Loan may not be extended, the rate of interest on any of its Loans may not be reduced and the principal amount of any of its Loans may not be forgiven, in each case without the consent of such Defaulting Lender and (y) any amendment, waiver or consent requiring the consent of all the Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than the other affected Lenders shall require the consent of such Defaulting Lender.

In addition, notwithstanding anything in this Section to the contrary, if the Administrative Agent and the Borrower shall have jointly identified an obvious error or any error or omission of a technical nature, in each case, in any provision of the Loan Documents, then the Administrative Agent and the Borrower shall be permitted to amend such provision, and, in each case, such amendment shall become effective without any further action or consent of any other party to any Loan Document if the same is not objected to in writing by the Required Lenders to the Administrative Agent within ten Business Days following receipt of notice thereof.

 

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SECTION 9.03 Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Lenders, the Administrative Agent and their Affiliates (including the reasonable and documented fees, charges and disbursements of counsel for the Administrative Agent, where applicable, in accordance with previously agreed fee arrangements) in connection with the syndication of the Facilities, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents, or any amendments, modifications or waivers of the provisions hereof or thereof, including in connection with the implementation of a Benchmark Replacement and/or any Benchmark Replacement Conforming Changes pursuant to Section 2.16 (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by any Issuing Bank in connection with the issuance, amendment, extension, reinstatement or renewal of any Letter of Credit or any demand for payment thereunder, and (iii) all out-of-pocket expenses incurred by the Administrative Agent, any Lender or any Issuing Bank (including the documented fees, charges and disbursements of one counsel for the Administrative Agent and one additional counsel in any applicable local jurisdiction, one counsel for the Lenders and any Issuing Bank as a whole (and one additional counsel in the event of an actual conflict of interest) and, in each case, such other counsel as may be agreed with the Borrower) in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

(b) Indemnification by the Borrower. The Borrower shall indemnify the Administrative Party (and any sub-agent thereof), the Account Bank, each Lender, each Hedge Counterparty, each Issuing Bank, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee) incurred by any Indemnitee or asserted against any Indemnitee by any Person (including the Borrower) arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by any Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, (iv) any costs associated with any Default hereunder or the enforcement of the Security Documents or acceleration of the Loans, or (v) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.

 

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(c) Reimbursement by Lenders. To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under paragraph (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), any Issuing Bank or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), such Issuing Bank or such Related Party, as the case may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought based on each Lender’s Applicable Percentage at such time) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by such Lender); provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or such Issuing Bank in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) or such Issuing Bank in connection with such capacity.

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by Applicable Law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit, or the use of the proceeds thereof. No Indemnitee referred to in paragraph (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

(e) Payments. All amounts due under this Section shall be payable not later than 10 days after demand therefor.

(f) Survival. Each party’s obligations under this Section shall survive the termination of the Loan Documents and payment of the obligations hereunder.

SECTION 9.04 Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither the Borrower nor the Guarantor may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender, and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of paragraph (b) of this Section, (ii) by way of participation in accordance with the provisions of paragraph (d) of this Section, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of paragraph (e) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in paragraph (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

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(b) Assignments by Lenders. Any Lender may at any time assign or transfer to any bank, financial institution, insurance company or a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in financing loans (an “Eligible Assignee”) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that the Administrative Agent shall have no duty or obligation at any time to determine if an entity constitutes an Eligible Assignee, and provided further that any such assignment shall be subject to the following conditions:

(i) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment assigned.

(ii) Required Consents. The consent of the Borrower (such consent not to be unreasonably withheld or delayed, and shall be deemed given if the Borrower has not rejected the proposed assignment within 10 Business Days of the Borrower’s receipt of written request for consent) shall be required unless the assignee is a Lender or an Affiliate of a Lender (so long as such Affiliate is engaged in making commercial loans or similar extensions of credit in the ordinary course of its business), or any Event of Default has occurred and is continuing at the time of assignment.

(iii) Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $5,000; provided that the Administrative Agent may, in its sole discretion or upon instruction by the Structuring Agent, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

(iv) No Assignment to Certain Persons. No such assignment shall be made to (A) the Borrower or any of the Borrower’s Affiliates or Subsidiaries or (B) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute a Defaulting Lender or a Subsidiary thereof.

(v) Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, each Issuing Bank and each other Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit in accordance with its Applicable Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under Applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

 

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Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 2.14 and 9.03 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this Section.

(c) Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices in New York, New York a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(d) Participations. Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural Person, or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural Person, or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the Borrower, the Administrative Agent, the Issuing Banks and Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement, and (iv) such Lender retains the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement, provided that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in Section 9.02(b) which requires the consent of all Lenders. For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 9.03(b) with respect to any payments made by such Lender to its Participant(s).

The Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.13, 2.14 and 2.15 (subject to the requirements and limitations therein) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Section 2.18 as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under Section 2.14 or 2.15, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 2.18(b) with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it

 

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were a Lender; provided that such Participant agrees to be subject to Section 2.12 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary 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 Loans or other obligations under the Loan Documents (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, letters of credit or its other obligations under any Loan Document) 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 Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(e) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

SECTION 9.05 Survival. All covenants, agreements, representations and warranties made by the Borrower herein and in any Loan Document or other documents delivered in connection herewith or therewith or pursuant hereto or thereto shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery hereof and thereof and the making of the Credit Extensions hereunder, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, any Issuing Bank or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or any Letter of Credit shall remain outstanding and so long as the Commitments have not expired or been terminated. The provisions of Sections 2.13, 2.14, 9.03, 9.15 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the payment in full of the Obligations, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.

SECTION 9.06 Counterparts; Integration; Effectiveness; Electronic Execution.

(a) Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents, and any separate letter agreements with respect to fees payable to the Administrative Agent, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (e.g., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement.

 

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(b) Electronic Execution of Assignments. The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any Applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

SECTION 9.07 Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this Section, if and to the extent that the enforceability of any provision of this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent or any Issuing Bank, as applicable, then such provision shall be deemed to be in effect only to the extent not so limited.

SECTION 9.08 Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender, each Issuing Bank, and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by Applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held, and other obligations (in whatever currency) at any time owing, by such Lender, such Issuing Bank or any such Affiliate, to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement or any other Loan Document to such Lender or such Issuing Bank or their respective Affiliates, irrespective of whether or not such Lender, Issuing Bank or Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrower may be contingent or unmatured or are owed to a branch office or Affiliate of such Lender or such Issuing Bank different from the branch office or Affiliate holding such deposit or obligated on such indebtedness.

SECTION 9.09 Governing Law; Jurisdiction; Etc.

(a) Governing Law. This Agreement and the other Loan Documents and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement or any other Loan Document (except, as to any other Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the law of the State of New York.

(b) Jurisdiction. The Borrower irrevocably and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against the Administrative Agent, any Lender, any Issuing Bank, or any Related Party of the foregoing in any way relating to this Agreement or any other Loan Document or the transactions relating hereto or thereto, in any forum other than the courts of the State of New York sitting in New York County, and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such

 

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action, litigation or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by Applicable Law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or in any other Loan Document shall affect any right that the Administrative Agent, any Lender or any Issuing Bank may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or its properties in the courts of any jurisdiction.

(c) Waiver of Venue. The Borrower irrevocably and unconditionally waives, to the fullest extent permitted by Applicable Law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by Applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d) Service of Process. Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by Applicable Law.

SECTION 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 9.11 Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

SECTION 9.12 Treatment of Certain Information; Confidentiality. Each of the Parties or any person who becomes a Party, whether or not any such Party or person ceases to be a Party, shall not (i) without the express prior written consent of the other Parties, issue any press release in relation to the transactions evidenced by this Agreement and the other Loan Documents, or (ii) disclose to any other person (other than another Party to a Loan Document) the Loan Documents or any Confidential Information (as defined below), except that Confidential Information may be disclosed (a) to its Affiliates and to its Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (b) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners); (c) to the extent required by Applicable Laws or by any subpoena or similar legal process; (d) to any other party hereto; (e) in connection with the

 

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exercise of any remedies hereunder or under any other Loan Document or any Security Document or any action or proceeding relating to this Agreement or any other Loan Document or any Security Document or the enforcement of rights hereunder or thereunder; (f) to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights and obligations under this Agreement, or (ii) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Borrower and its obligations, this Agreement or payments hereunder, in each case provided such recipient(s) have signed a confidentiality agreement consistent with this Section 9.12; (g) on a confidential basis to (i) any rating agency in connection with rating the Borrower or its Subsidiaries or this Agreement or the Facilities or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to the Facilities; (h) to any central bank or Federal Reserve Bank to whom or for whose benefit a Lender charges, assigns or otherwise creates Security Interest (or may do so) pursuant to Section 9.04(e); (i) with the consent of the Party who has provided such Confidential Information; (j) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section, or (y) becomes available to the Administrative Agent, any Lender, any Issuing Bank or any of their respective Affiliates on a non-confidential basis from a source other than the Borrower who did not acquire such information as a result of a breach of this Section, or (k) to its auditors, legal, insurance or other professional advisors or insurers or underwriters of any member of the group of companies of which such party is a member. In addition, the Administrative Agent and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry and service providers to the Agents or any Lender in connection with the administration of this Agreement, the other Loan Documents, and the Commitments.

For purposes of this Section, “Confidential Information” means this Agreement and the other Loan Documents and the transactions contemplated hereby and all information received from any other Party to this Agreement or any of its Subsidiaries or any of their respective businesses, relating to such Party’s business, financial or other covenants, other than any such information that is available to the receiving Party on a nonconfidential basis prior to disclosure by the disclosing Party; provided that, in the case of such information received after the Closing Date, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Confidential Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

SECTION 9.13 PATRIOT Act. The Administrative Agent and each Lender subject to the PATRIOT Act hereby notifies the Borrower that, pursuant to the requirements of the PATRIOT Act, it may be required to obtain, verify, record and update certain information relating to individuals and entities which maintain a business relationship with the Administrative Agent and such Lender, , which information includes the name and address of the Borrower and Obligors and other information that will allow the Administrative Agent and such Lender to identify the Borrower and Obligors in accordance with the PATRIOT Act. Accordingly, each Party agrees to provide to the Administrative Agent and each such Lender upon their request from time to time such identifying information and documentation as may be available in order to enable the Administrative Agent and each such Lender to comply with the requirements of the PATRIOT Act.

SECTION 9.14 Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts that are treated as interest on such Loan under Applicable Law (collectively, “charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) that may be contracted for, charged, taken,

 

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received or reserved by the Lender holding such Loan in accordance with Applicable Law, the rate of interest payable in respect of such Loan hereunder, together with all charges payable in respect thereof, shall be limited to the Maximum Rate. To the extent lawful, the interest and charges that would have been paid in respect of such Loan but were not paid as a result of the operation of this Section shall be cumulated and the interest and charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the amount collectible at the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate for each day to the date of repayment, shall have been received by such Lender. Any amount collected by such Lender that exceeds the maximum amount collectible at the Maximum Rate shall be applied to the reduction of the principal balance of such Loan or refunded to the Borrower so that at no time shall the interest and charges paid or payable in respect of such Loan exceed the maximum amount collectible at the Maximum Rate.

SECTION 9.15 Payments Set Aside. To the extent that any payment by or on behalf of the Borrower is made to the Administrative Agent, any Issuing Bank or any Lender, or the Administrative Agent, any Issuing Bank or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, such Issuing Bank or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender and each Issuing Bank severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Effective Rate from time to time in effect.

SECTION 9.16 No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (a) (i) no fiduciary, advisory or agency relationship between the Borrower and its Subsidiaries and the Structuring Agent, the Administrative Agent, any Issuing Bank, or any Lender is intended to be or has been created in respect of the transactions contemplated hereby or by the other Loan Documents, irrespective of whether the Structuring Agent, the Administrative Agent, any Issuing Bank or any Lender has advised or is advising the Borrower or any Subsidiary on other matters, (ii) the arranging and other services regarding this Agreement provided by the Structuring Agent, the Administrative Agent, the Issuing Banks and the Lenders are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Structuring Agent, the Administrative Agent, the Issuing Banks and the Lenders, on the other hand, (iii) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent that it has deemed appropriate and (iv) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; and (b) (i) the Structuring Agent, the Administrative Agent, the Issuing Banks and the Lenders each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person; (ii) none of the Structuring Agent, the Administrative Agent, the Issuing Banks and the Lenders has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set

 

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forth herein and in the other Loan Documents; and (iii) the Structuring Agent, the Administrative Agent, the Issuing Banks and the Lenders and their respective Affiliates may be engaged, for their own accounts or the accounts of customers, in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and none of the Structuring Agent, the Administrative Agent, the Issuing Banks and the Lenders has any obligation to disclose any of such interests to the Borrower or its Affiliates. To the fullest extent permitted by Law, the Borrower hereby waives and releases any claims that it may have against any of the Structuring Agent, the Administrative Agent, the Issuing Banks and the Lenders with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

SECTION 9.17 Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder that may be payable to it by any party hereto that is an Affected Financial Institution; and

(b) the effects of any Bail-in Action on any such liability, including, if applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of the applicable Resolution Authority.

SECTION 9.18 QFC Provisions(i) . The following provisions apply to the extent that the Loan Documents provide support, through a guarantee or otherwise, for Hedging Agreements or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and each such QFC, a “Supported QFC”):

(a) The parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):

(i) In the event a Covered Entity that is party to a Supported QFC or to any QFC Credit Support (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any

 

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rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States.

(ii) In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support

(b) In addition, the parties agree that:

(i) Notwithstanding anything to the contrary in the Loan Documents or any other agreement, but without prejudice to the requirements of Section 9.18(a), (1) Default Rights under the Loan Documents that might otherwise apply to a Supported QFC or any QFC Credit Support may not be exercised against a Covered Party if such Default Rights are related, directly or indirectly, to a BHC Act Affiliate of such Covered Party becoming subject to Insolvency Proceedings, except to the extent such exercise would be permitted under 12 C.F.R. § 252.84, 12 C.F.R. § 47.5, or 12 C.F.R. § 382.4, as applicable; and (2) nothing in the Loan Documents or any other agreement shall prohibit the transfer of any Covered Affiliate QFC Credit Support, any interest or obligation in or under, or any property securing, such Covered Affiliate QFC Credit Support to a Transferee upon or following a BHC Act Affiliate of the Covered Party becoming subject to Insolvency Proceedings, unless the transfer would result in the party supported thereby being the beneficiary of such Covered Affiliate QFC Credit Support in violation of any law applicable to such party.

(ii) After a BHC Act Affiliate of a Covered Party has become subject to Insolvency Proceedings, if any party to the Loan Documents, any Supported QFC or any QFC Credit Support seeks to exercise any Default Right against such Covered Party with respect to such Supported QFC or such QFC Credit Support, the party seeking to exercise such Default Right shall have the burden of proof, by clear and convincing evidence, that the exercise of such Default Right is permitted hereunder.

(c) As used in this Section 9.18, the following terms have the following meanings;

(i) “BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

(ii) “Covered Entity” means any of the following:

(A) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

(B) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

 

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(C) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

(iii) “Covered Affiliate QFC Credit Support” means, in respect of a Supported QFC to which a Covered Party is the direct party, QFC Credit Support provided by a Covered Party that is a BHC Act Affiliate of such direct party.

(iv) “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

(v) “Insolvency Proceeding” means a receivership, insolvency, liquidation, resolution, or similar proceeding.

(vi) “QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

(vii) “Transferee” means, in respect of any Covered Affiliate QFC Credit Support, a person to whom such Covered Affiliate QFC Credit Support is transferred upon the provider of such Covered Affiliate QFC Credit Support becoming subject to Insolvency Proceedings or thereafter as part of its resolution, restructuring, or reorganization.

SECTION 9.19 Amendment and Restatement.

(a) This Agreement shall be deemed to be an amendment to and restatement of the Initial Credit Agreement, and the Initial Credit Agreement as amended and restated hereby shall remain in full force and effect and is hereby ratified and confirmed in all respects. This Agreement is not intended to constitute, nor does it constitute, an interruption, suspension of continuity, satisfaction, discharge of prior duties, novation, or termination of the Initial Credit Agreement or the liens, security interests, loans, guarantees, liabilities, expenses, or obligations under the Initial Credit Agreement, or the collateral thereunder. Each of the Obligors affirms its duties and obligations under the terms of the Initial Credit Agreement (as amended and restated by this Agreement). This Agreement amends and restates the Initial Credit Agreement in its entirety and any obligation thereunder shall be deemed to be outstanding under this Agreement. If there is a conflict between the Initial Credit Agreement and this Agreement, this Agreement shall govern from and after the Restatement Date. Upon the Restatement Date, each reference to the Initial Credit Agreement in any other Secured Debt Document or in any other document, instrument or agreement shall mean and be a reference to the Initial Credit Agreement as amended and restated by this Agreement.

(b) Each Obligor hereby expressly acknowledges and agrees that as at the Restatement Date the Term Loan Required Payments (reflecting drawn Term Loan Commitments) which are outstanding are set out in the Repayment Schedule prepared as of the Restatement Date set forth in Schedule 2.03.

(c) Each Obligor hereby (i) expressly acknowledges the terms of this Agreement, (ii) ratifies and affirms its obligations under the Loan Documents (including guarantees and security agreements) executed by such Obligor and (iii) acknowledges, renews and extends its continued liability under all such Loan Documents and agrees such Loan Documents remain in full force and effect, including with respect to the obligations of the Borrower as modified by this Agreement. Each Obligor further represents and warrants to each Secured Party that after giving effect to this Agreement, neither

 

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the modification of the Initial Credit Agreement effected pursuant to this Agreement, nor the execution, delivery, performance or effectiveness of this Agreement (A) impairs the validity, effectiveness or priority of the Liens granted pursuant to any Secured Debt Document (as such term is defined in the Initial Credit Agreement), and such Liens continue unimpaired with the same priority to secure repayment of all Obligations, whether heretofore or hereafter incurred; or (B) requires that any new filings be made or other action taken to perfect or to maintain the perfection of such Liens.

(d) Each Obligor hereby agrees, acknowledges and affirms that (i) each of the Loan Documents to which it is a party shall remain in full force and effect and shall constitute security for all Obligations pursuant to the Initial Credit Agreement as amended and restated hereby, and (ii) any reference to the Initial Credit Agreement appearing in any other Secured Debt Document shall on and after the Restatement Date be deemed to refer to the Initial Credit Agreement as amended and restated hereby. In furtherance of the foregoing, each Obligor hereby confirms the security interest in the Collateral granted by it in favor of the Security Trustee pursuant to each Collateral Document to which it is a party.

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

BORROWER
       SEASPAN HOLDCO III LTD.
  By:  

/s/ Bing Chen

  Name: Bing Chen
  Title: President


PRIMARY GUARANTOR
       SEASPAN CORPORATION
  By:  

/s/ Graham Talbot

  Name: Graham Talbot
  Title: Chief Financial Officer


ADMINISTRATIVE AGENT
      

CITIBANK, N.A.,

as Administrative Agent

  By:  

/s/ Marion O’Connor

  Name: Marion O’Connor
  Title: Senior Trust Officer


STRUCTURING AGENT
       CITIBANK, N.A., as Structuring Agent
  By:  

/s/ Matthew J. Simonetti

  Name: Matthew J. Simonetti
  Title: Managing Director


LENDERS
SOCIÉTÉ GÉNÉRALE, HONG KONG BRANCH, a public limited company incorporated in France, acting through its Hong Kong Branch, as Lender, Mandated Lead Arranger and Lead Sustainability Coordinator
By:  

/s/ Gwenael Delattre

Name: Gwenael Delattre
Title:   Director, Head of Shipping & Offshore
  Finance Asia Pacific
By:  

/s/ Ting Zhang

Name:   Ting Zhang
Title:   Director, Shipping & Offshore Finance


CITIBANK, N.A.,

as Lender, Global Coordinator and Co-

Sustainability Coordinator

By:  

/s/ Matthew J. Simonetti

Name: Matthew J. Simonetti
Title:   Managing Director


BANK OF MONTREAL,

as Lender, Mandated Lead Arranger and Co-
Sustainability Coordinator

By:  

/s/ Ben Rough

Name: Ben Rough
Title:   Director


NATIONAL AUSTRALIA BANK LIMITED,

as Lender and Mandated Lead Arranger

By:  

/s/ Daniel Carr

Name: Daniel Carr
Title:   Head of Asset Finance & Leasing, North America


WELLS FARGO BANK, N.A.,

as Lender, Mandated Lead Arranger and Co-
Sustainability Coordinator

By:  

/s/ Jerri Kallam

Name: Jerri Kallam
Title:   Director


BNP PARIBAS,

as Lender

By:  

/s/ Chong Chiu Ming, Logan

Name: Chong Chiu Ming, Logan
Title:    Managing Director of Transportation Sector              Investment Banking Asia Pacific
By:  

/s/ Lau Kwong Wang, Joshua

Name: Lau Kwong Wang, Joshua

Title:    Director, IBA - Integrated Sectors – Shipping HK


BANK OF AMERICA, N.A.,

as Lender and Mandated Lead Arranger

By:  

/s/ Daryl K. Hogge

Name: Daryl K. Hogge
Title:   Senior Vice President


CTBC BANK CO., LTD.,

as Lender

By:  

/s/ Ting Chen

Name: Ting Chen
Title:   Senior Vice President


FÉDÉRATION DES CAISSES DESJARDINS DU QUÉBEC,

as Lender

By:  

/s/ Jonathan Raiken

Name: Jonathan Raiken
Title:   Managing Director
By:  

/s/ Michael Parizeau

Name: Michael Parizeau
Title:   Vice President


MEGA INTERNATIONAL COMMERCIAL BANK CO., LTD., OFFSHORE BANKING

BRANCH,

as Lender

By:  

/s/ Chien-Chuang Chien

Name: Chien-Chuang Chien
Title:   SVP & GM


CANADIAN IMPERIAL BANK OF

COMMERCE,

as Lender

By:  

/s/ Martin Weitbrecht

Name: Martin Weitbrecht
Title:  Authorised Signatory
By:  

/s/ Ben Fallico

Name: Ben Fallico
Title:  Authorised Signatory


FIRST COMMERCIAL BANK, LTD. HONG KONG BRANCH,

as Lender

By:  

/s/ Diau Ren Ti

Name: Diau Ren Ti
Title:  Senior A.V.P. & Deputy G.M.
By:  

/s/ Tu Yun Chia

Name: Tu Yun Chia
Title:  A.V.P. & Deputy G.M.


HUA NAN COMMERCIAL BANK, LTD.,
OFFSHORE BANKING BRANCH,

as Lender

By:  

/s/ Jui Ning Lo

Name: Jui Ning Lo
Title:  VP & General Manager


THE TORONTO-DOMINION BANK,

as Lender

By:  

/s/ Andrei Rybianski

Name: Andrei Rybianski
Title:   Director, Commercial National Accounts
By:  

/s/ Kathryn Gislason

Name: Kathryn Gislason
Title:   Manager, Commercial Credit


BANK SINOPAC,

as Lender

By:  

/s/ Carrie Hung

Name: Carrie Hung
Title:   Vice President


E.SUN COMMERCIAL BANK, LTD., HONG
KONG BRANCH,

as Lender

By:  

/s/ Chih-Hui Lin, Eric

Name: Chih-Hui Lin, Eric
Title:   D.G.M.
By:  

/s/ Shao-Wei Huang, David

Name: Shao-Wei Huang, David
Title:   V.P.


TAISHIN INTERNATIONAL BANK,

as Lender

By:  

: /s/ Gavin Wang

Name: Gavin Wang
Title: Senior Vice President


STATE BANK OF INDIA, LONDON BRANCH,

as Lender

By:  

/s/ Pradipta Hazra

Name: Pradipta Hazra
Title:   Head Credit


COAST CAPITAL SAVINGS FEDERAL CREDIT UNION,

as Lender

By:  

/s/ Mark Beck

Name: Mark Beck
Title:   Senior Manager
By:  

/s/ Rob Berzins

Name: Rob Berzins
Title:   Director


EXPORT DEVELOPMENT CANADA, as Lender
By:  

/s/ Michael Lambe

Name: Michael Lambe
Title:   Financing Manager
By:  

/s/ Nadia Avila Lopez

Name: Nadia Avila Lopez
Title:   Senior Associate


CANADIAN WESTERN BANK, as Lender
By:  

/s/ Craig Preiksaitis

Name: Craig Preiksaitis
Title:   Senior Manager, Corporate Lending
By:  

/s/ John Cherian

Name: John Cherian
Title:   Managing Director & Head, Corporate and
Energy Lending


BANK OF TAIWAN, OFFSHORE BANKING
BRANCH,

as Lender

By:  

/s/ Diane Wang

Name: Diane Wang
Title:   S.V.P & General Manager


LAND BANK OF TAIWAN, CO., LTD. (INCORPORATED IN TAIWAN), HONG KONG BRANCH,

as Lender

By:  

/s/ Lin, Min Kuei

Name: Lin, Min Kuei
Title:   VP & General Manager

Exhibit 4.2

 

 

FIRST AMENDED AND RESTATED

CREDIT AGREEMENT

dated as of

19 May, 2021

between

SEASPAN HOLDCO III LTD.,

as Borrower,

SEASPAN CORPORATION,

as Guarantor,

CITIBANK, N.A.,

as Administrative Agent,

CITIBANK, N.A.,

as Structuring Agent

CITIBANK, N.A.,

as global coordinator and left lead mandated lead arranger and joint-bookrunner

BANK OF MONTREAL,

NATIONAL AUSTRALIA BANK LIMITED,

BANK OF AMERICA, N.A. and

WELLS FARGO BANK, N.A.,

as mandated lead arrangers and joint-bookrunners

SOCIÉTÉ GÉNÉRALE, HONG KONG BRANCH,

as Lead Sustainability Coordinator

CITIBANK, N.A.,

BANK OF MONTREAL, and

WELLS FARGO BANK, N.A.,

as Co-Sustainability Coordinators

and

THE SEVERAL LENDERS FROM TIME TO

TIME PARTY HERETO

 

 


TABLE OF CONTENTS

 

     Page  
ARTICLE I   
DEFINITIONS   
SECTION 1.01   Defined Terms      2  
SECTION 1.02   Terms Generally      30  
SECTION 1.03   Accounting Terms; Changes in GAAP      31  
SECTION 1.04   Rates      31  
SECTION 1.05   Restricted Lenders      31  
ARTICLE II   
COMMITMENTS   
SECTION 2.01   Term Loan Commitments      32  
SECTION 2.02   [Reserved].      33  
SECTION 2.03   Repayment Schedules.      33  
SECTION 2.04   Repayment of the Loans      34  
SECTION 2.05   Optional Prepayments      34  
SECTION 2.06   Mandatory Prepayments.      35  
SECTION 2.07   [Reserved]      36  
SECTION 2.08   Interest      36  
SECTION 2.09   Fees      37  
SECTION 2.10   Evidence of Debt      37  
SECTION 2.11   Payments Generally; Several Obligations of Lenders      37  
SECTION 2.12   Sharing of Payments      38  
SECTION 2.13   Compensation for Losses      39  
SECTION 2.14   Increased Costs      39  
SECTION 2.15   Taxes      40  
SECTION 2.16   Benchmark Replacement Setting      41  
SECTION 2.17   [Reserved]      47  
SECTION 2.18   Mitigation Obligations; Replacement of Lenders      47  
SECTION 2.19   [Reserved]      48  
SECTION 2.20   Defaulting Lenders      48  
SECTION 2.21   Increases in Commitments      50  
ARTICLE III   
REPRESENTATIONS AND WARRANTIES   
SECTION 3.01   Status      51  
SECTION 3.02   Powers and authority      51  
SECTION 3.03   Legal validity      51  
SECTION 3.04   Non-conflict      51  
SECTION 3.05   No default      51  
SECTION 3.06   Authorizations      51  
SECTION 3.07   Financial statements      51  

 

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SECTION 3.08   No misleading information      52  
SECTION 3.09   No Material Adverse Effect      52  
SECTION 3.10   Litigation      52  
SECTION 3.11   Pari passu ranking      52  
SECTION 3.12   Taxes      52  
SECTION 3.13   Taxes on payments      52  
SECTION 3.14   Stamp duties      52  
SECTION 3.15   Environment      53  
SECTION 3.16   Security Interests      53  
SECTION 3.17   Security Assets      53  
SECTION 3.18   Collateral Vessel      53  
SECTION 3.19   ISM Code and ISPS Code compliance      53  
SECTION 3.20   No amendments to Related Contracts      53  
SECTION 3.21   Money Laundering      53  
SECTION 3.22   Anti-Corruption and Sanctions      53  
SECTION 3.23   Compliance with laws      54  
SECTION 3.24   Investments Company Act      54  
SECTION 3.25   Regulation U      54  
SECTION 3.26   Insolvency      54  
SECTION 3.27   Immunity      55  
SECTION 3.28   [Reserved]      55  
SECTION 3.29   Jurisdiction and governing law      55  
SECTION 3.30   Accounts      55  
SECTION 3.31   Charters      55  
SECTION 3.32   Ownership      55  
SECTION 3.33   Use of proceeds      55  
SECTION 3.34   Special purpose representations      55  
SECTION 3.35   Separateness      56  
SECTION 3.36   Beneficial Ownership Certification      57  
ARTICLE IV   
CONDITIONS   
SECTION 4.01   Initial Borrowing Date      57  
SECTION 4.02   Conditions to Borrowings      59  
SECTION 4.03   [Reserved]      63  
SECTION 4.04   Conditions to Restatement      63  
SECTION 4.05   Post-Restatement Items      65  
ARTICLE V   
AFFIRMATIVE COVENANTS   
SECTION 5.01   Financial Statements      66  
SECTION 5.02   Compliance Certificates      66  
SECTION 5.03   Valuation      67  
SECTION 5.04   Access to Books and Records      67  
SECTION 5.05   Information - miscellaneous      67  
SECTION 5.06   Notification of Default      68  
SECTION 5.07   Know your customer checks      68  

 

ii


SECTION 5.08    Use of websites      69  
SECTION 5.09    Authorizations      69  
SECTION 5.10    Compliance with laws      69  
SECTION 5.11    Pari passu ranking      69  
SECTION 5.12    Place of business      70  
SECTION 5.13    Security      70  
SECTION 5.14    Separateness Covenants      70  
SECTION 5.15    Registration of the Collateral Vessels      71  
SECTION 5.16    Classification and repair      72  
SECTION 5.17    Lawful and safe operation      73  
SECTION 5.18    Repair of the Collateral Vessels      73  
SECTION 5.19    Arrests and liabilities      73  
SECTION 5.20    Environment      74  
SECTION 5.21    Information regarding the Collateral Vessels      74  
SECTION 5.22    Provision of further information      75  
SECTION 5.23    Management      76  
SECTION 5.24    Charters      76  
SECTION 5.25    Termination of Eligible Charters      77  
SECTION 5.26    Scope of Obligatory Insurances      77  
SECTION 5.27    Obligatory Insurances      78  
SECTION 5.28    Power of Administrative Agent to insure      79  
SECTION 5.29    ISM Code      80  
SECTION 5.30    ISPS Code      80  
SECTION 5.31    Dry Docking      81  
SECTION 5.32    Rating      81  
SECTION 5.33    Taxation      81  
SECTION 5.34    Decarbonization Certificates      81  
ARTICLE VI   
NEGATIVE COVENANTS   
SECTION 6.01    Security Interests      83  
SECTION 6.02    Mergers      83  
SECTION 6.03    Special Purpose Covenants      83  
SECTION 6.04    Payment of dividends      84  
SECTION 6.05    Vessel Substitutions      84  
SECTION 6.06    Vessel Dispositions and Removals      84  
SECTION 6.07    Year end      85  
SECTION 6.08    Related Contracts      85  
SECTION 6.09    Financial Covenants      85  
SECTION 6.10    Creation of Additional Security      86  
SECTION 6.11    No amendment to Related Contracts      86  
SECTION 6.12    Anti-corruption law      86  
SECTION 6.13    Sanctions      87  
SECTION 6.14    Additional Secured Debt      87  

 

iii


ARTICLE VII   
EVENTS OF DEFAULT   
SECTION 7.01    Events of Default      87  
ARTICLE VIII   
AGENCY   
SECTION 8.01    Appointment and Authority      91  
SECTION 8.02    Rights as a Lender      91  
SECTION 8.03    Exculpatory Provisions      91  
SECTION 8.04    Reliance by Administrative Agent      92  
SECTION 8.05    Delegation of Duties      92  
SECTION 8.06    Resignation of Administrative Agent      93  
SECTION 8.07    Non-Reliance on Other Lenders      93  
SECTION 8.08    No Other Duties      93  
SECTION 8.09    Administrative Agent May File Proofs of Claim      94  
SECTION 8.10    Intercreditor Agreement      94  
ARTICLE IX   
MISCELLANEOUS   
SECTION 9.01    Notices      94  
SECTION 9.02    Waivers; Amendments      96  
SECTION 9.03    Expenses; Indemnity; Damage Waiver      98  
SECTION 9.04    Successors and Assigns      99  
SECTION 9.05    Survival      102  
SECTION 9.06    Counterparts; Integration; Effectiveness; Electronic Execution      102  
SECTION 9.07    Severability      103  
SECTION 9.08    Right of Setoff      103  
SECTION 9.09    Governing Law; Jurisdiction; Etc      103  
SECTION 9.10    WAIVER OF JURY TRIAL      104  
SECTION 9.11    Headings      104  
SECTION 9.12    Treatment of Certain Information; Confidentiality      104  
SECTION 9.13    PATRIOT Act      105  
SECTION 9.14    Interest Rate Limitation      105  
SECTION 9.15    Payments Set Aside      106  
SECTION 9.16    No Advisory or Fiduciary Responsibility      106  
SECTION 9.17    Acknowledgement and Consent to Bail-In of EEA Financial Institutions      106  
SECTION 9.18    QFC Provisions      107  
SECTION 9.19    Amendment and Restatement      109  

 

iv


SCHEDULES

 

SCHEDULE 1.01   -    Estimated add back related to vessel depreciation
SCHEDULE 2.01   -    Commitments and Lenders
SCHEDULE 2.02   -    Concentration Limit Requirements
SCHEDULE 2.03   -    Repayment Schedule as of the Restatement Date
EXHIBITS     
EXHIBIT A   -    Assignment and Assumption
EXHIBIT B   -    Compliance Certificate
EXHIBIT C   -    Identified Vessels
EXHIBIT D   -    Form of Decarbonization Certificate
EXHIBIT E   -    Form of Charterer’s Undertaking

 

 

v


FIRST AMENDED AND RESTATED CREDIT AGREEMENT dated as of 19 May, 2021 (this “Agreement”), between SEASPAN HOLDCO III LTD., a corporation organized and existing under the laws of the Republic of the Marshall Islands, with limited liability, with its registered offices at Trust Company Complex, Ajeltake Road, Ajeltake Island, P.O. Box 1405, Majuro, Marshall Islands MH96960 and registered as a non-Hong Kong company under Part 16 of the Companies Ordinance (Cap. 622 of the laws of Hong Kong) (the “Borrower”), SEASPAN CORPORATION, a corporation organized and existing under the laws of the Republic of the Marshall Islands with limited liability, as a Guarantor, the several banks and other financial institutions or entities from time to time party hereto as Lenders, CITIBANK, N.A. (“Citibank”), acting through its Agency and Trust Division, not in its individual capacity but solely as administrative agent (in such capacity, together with its successors and permitted assigns, the “Administrative Agent”), CITIBANK, N.A., as structuring agent (in such capacity, the “Structuring Agent”), CITIBANK, N.A., as global coordinator and left lead mandated lead arranger and joint-bookrunner (in such capacity, the “Global Coordinator”), BANK OF MONTREAL, NATIONAL AUSTRALIA BANK LIMITED, BANK OF AMERICA, N.A. and WELLS FARGO BANK, N.A., as mandated lead arrangers and joint-bookrunners (in such capacity, the “Mandated Lead Arrangers” and each a “Mandated Lead Arranger”), SOCIÉTÉ GÉNÉRALE, HONG KONG BRANCH, a public limited company incorporated in France, acting through its Hong Kong Branch (“Société Générale, Hong Kong Branch”), as lead sustainability coordinator (in such capacity, the “Lead Sustainability Coordinator”), and CITIBANK, N.A., BANK OF MONTREAL and WELLS FARGO BANK, N.A., as co-sustainability coordinators (in such capacity, the “Co-Sustainability Coordinators” and each a “Co-Sustainability Coordinator”).

W I T N E S S E T H:

WHEREAS the Borrower has requested from the Lenders a term loan facility (as may be increased from time to time in accordance with the terms of this Agreement and the other Secured Debt Documents) as set forth herein.

WHEREAS the proceeds of the Loans and any Additional Secured Debt will be used (a) to finance the acquisition of Collateral Vessels and refinance existing indebtedness in relation to the Collateral Vessels and (b) for general corporate purposes of the Borrower and the Guarantor.

WHEREAS it is the intent of the parties hereto that this Agreement not constitute a novation of the obligations and liabilities of the parties under the Initial Credit Agreement, but that this Agreement amend and restate in its entirety the Initial Credit Agreement and re-evidence the obligations and liabilities of the parties thereunder.

WHEREAS the parties are willing to amend and restate the Initial Credit Agreement on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained herein, the parties hereto hereby agree as follows:


ARTICLE I

DEFINITIONS

SECTION 1.01 Defined Terms. Capitalized terms used in this Agreement which are not otherwise defined have the meanings assigned to them in the Intercreditor Agreement. As used in this Agreement, the following terms have the meanings specified below:

Account Bank” means, in relation to the HK Collection Account, Citibank, N.A., Hong Kong Branch, in relation to any Vessel Owner Account, such bank as may be approved by the Administrative Agent, and, in relation to all other Accounts, Bank of Montreal.

Account Charge” means, in relation to each of the Charged Accounts, the first priority fixed charge or pledge over all such accounts given or to be given by the relevant account holder thereof in favor of and in form and substance satisfactory to the Security Trustee.

Additional Secured Debt” has the meaning specified in the Intercreditor Agreement.

Additional Security” means any Security Interest created pursuant to Section 6.10.

Additional Vessel” means any vessel (other than the Identified Vessels) that meets the Eligibility Criteria.

Administrative Agent” means Citibank, N.A., acting through its Agency and Trust Division, not in its individual capacity but solely in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth in Section 9.01, or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.

Administrative Parties” means, collectively, the Global Coordinator, the Mandated Lead Arrangers, the Lead Sustainability Coordinator, the Co-Sustainability Coordinators, the Administrative Agent, the Structuring Agent and the Security Trustee.

Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

Advance Rate” shall mean, for any Borrowing and the Collateral Vessel related thereto, the amount calculated as a percentage of the Asset Value of such Collateral Vessel as follows: (a) in respect of a Collateral Vessel which is subject to an Eligible Charter, (i) where such Collateral Vessel is less than 5 years old, 75%, (ii) where such Collateral Vessel is equal to or more than 5 years old but less than 10 years old, 70%, and (iii) where such Collateral Vessel is equal to or greater than 10 years old, 60%; and (b) in respect of a Collateral Vessel which is not subject to an Eligible Charter, (i) where such Collateral Vessel is less than 10 years old, 60%, and (ii) where such Collateral Vessel is equal to or greater than 10 years old, 50%.

Affected Financial Institution” means, (a) any EEA Financial Institution or (b) any UK Financial Institution.

 

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Affiliate” means, with respect to a specified Person, another Person that directly or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

Agents” means, collectively, the Administrative Agent, the Structuring Agent, the Global Coordinator, the Mandated Lead Arrangers, the Lead Sustainability Coordinator and the Co-Sustainability Coordinators.

Agent Parties” has the meaning specified in Section 9.01(d)(ii).

Agreement” has the meaning specified in the introductory paragraph hereof.

Annex VI” means Annex VI of the Protocol of 1997 (as subsequently amended from time to time) to amend the International Convention for the Prevention of Pollution from Ships 1973 (Marpol), as modified by the Protocol of 1978 relating thereto.

Anti-Corruption Laws” means all laws, rules, and regulations, as amended, concerning or relating to bribery or corruption, including, without limitation, the U.S. Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 (as amended), and all other applicable anti-bribery and corruption laws, regulations or ordinances in any jurisdiction where the Obligors are located or doing business.

Anti-Money Laundering Laws” has the meaning specfied in Section 3.21.

Applicable Charter Margin Adjustment” means for the relevant Margin Period:

(a) less 0.0125% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Margin Period is equal to or greater than 25% and less than 30%;

(b) less 0.015% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Margin Period is equal to or greater than 30% and less than 35%;

(c) less 0.0175% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Margin Period is equal to or greater than 35% and less than 40%;

(d) less 0.020% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Margin Period is equal to or greater than 40% and less than 45%;

(e) less 0.0225% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Margin Period is equal to or greater than 45% and less than 50%; and

(f) less 0.025% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Margin Period is equal to or greater than 50%.

Applicable Law” means, as to any Person, all applicable Laws binding upon such Person or to which such a Person is subject.

 

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Applicable Percentage” means, with respect to any Lender, the percentage of the total Commitments represented by such Lender’s Commitment. If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments.

Applicable Performance Margin Adjustment” means for the relevant Margin Period:

(a) plus 0.0125% per annum where the Average Collateral Vessel Delta determined on the Delta Test Date immediately prior to the relevant Margin Period is greater than +2.5%; and

(b) less 0.0125% per annum where the Average Collateral Vessel Delta

determined on the Delta Test Date immediately prior to the relevant Margin Period is less than -2.5%.

Approved Flag State” means the Republic of the Marshall Islands, the Commonwealth of the Bahamas, the Republic of Liberia, the Republic of Panama, the Commonwealth of Bermuda, the Cayman Islands, the Isle of Man, Malta, Hong Kong, the United Kingdom, the Commonwealth of Australia, Barbados, Belgium, the Republic of Cyprus, Danish International Ship Register (DIS), Germany, Gibraltar, Greece, Norwegian International Ship Register (NIS), Norway, The Netherlands, Singapore, United States of America and any other flag state approved by the Administrative Agent in writing provided that the total number of Collateral Vessels that may be registered under the United States of America flag at any one time shall be limited to two and such Collateral Vessels shall not be qualified Jones Act vessels. The Administrative Agent shall, in giving any such approval, act on the instructions of all Lenders, unless no Lender has objected to any such other flag state within 15 days of a request for approval, in which case, the Administrative Agent shall act on the instructions of the Required Lenders.

Approved Valuers” means H. Clarkson & Co. Ltd. and Howe Robinson Partners (or, in either case, such other appraiser as the Administrative Agent shall agree).

Asset Value” means, in respect of any Collateral Vessel or Substitute Vessel, the greater of the DCF Value and the Market Value of such Collateral Vessel.

Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in substantially the form of Exhibit A or any other form approved by the Administrative Agent.

Availability Termination Date” means the Term Loan Availability Termination Date.

Average Collateral Vessel Delta” means the weighted average Collateral Vessel Delta for all Collateral Vessels when calculated on each Delta Test Date, with the weighting of each Collateral Vessel Delta to be determined by the proportion the Asset Value of the relevant Collateral Vessel multiplied by the Advance Rate for such Collateral Vessel, bears to the Borrowing Base on 31 December of the year immediately prior to the relevant Delta Test Date, calculated by the Lead Sustainability Coordinator with reference to the Decarbonization Certificate and the Compliance Data.

Average Efficiency Ratio” and/or “AER” means, in respect of a single Collateral

Vessel, such Collateral Vessel’s average efficiency ratio expressed in unit grams of CO2 per tonne-mile i.e. gCO2/dwt-nm calculated by the Lead Sustainability Coordinator with reference to the Decarbonization Certificate and the Compliance Data, as per the below formula:

 

4


LOGO

where ci is the carbon emissions for voyage i computed using the fuel consumption with reference to the Decarbonization Certificate and the Compliance Data and carbon factor of each type of fuel set out in MEPC 63/23 Annex 8 – 2012 Guidelines on the Method of Calculation of the Attained Energy Efficient Design Index (EEDI) for New Ships as updated from time to time, dwt is the design deadweight of the Collateral Vessel, and Di is the distance travelled on voyage i. The AER is computed for all voyages performed by the relevant Collateral Vessel over the applicable 12 calendar months.

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

Bail-In Legislation” means, (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

BB Event” means, as of any BB Test Date, a BB Ratio in excess of 1.0:1.0x.

BB Ratio” means, at any Test Date, the ratio of (a) the aggregate of (x) the outstanding Program Debt plus (y) the then mark-to-market value of any amounts payable to (but, for the avoidance of any doubt, ignoring amounts payable by) the Hedge Counterparties under any Hedging Agreements and the other Hedge Counterparties (as defined in the Intercreditor Agreement) under any other Hedging Agreements (as defined in the Intercreditor Agreement), to (b) the Borrowing Base.

BB Test Date” means (a) each Borrowing Date; (b) each Vessel Substitution Date; (c) each Vessel Disposition Date; and (d) each Determination Date.

Beneficial Ownership Certification” means a certification regarding beneficial ownership or control as required by the Beneficial Ownership Regulation.

Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

Bill of Sale” means, in respect of a Collateral Vessel, the relevant bill of sale (or other instrument of transfer) executed by the relevant seller in favor of the relevant Vessel Owner pursuant to the relevant Purchase Agreement.

Borrower” means Seaspan Holdco III Ltd., a company incorporated in the Marshall Islands or such other jurisdiction approved by the Administrative Agent with the consent of all Lenders (in their reasonable discretion).

Borrower Materials” has the meaning specified in Section 9.01(e).

Borrowing” means a borrowing by the Borrower of Loans.

Borrowing Base” means, at any Test Date, the aggregate of (a) the latest Asset Value of each Collateral Vessel (other than Excluded Collateral Vessels) multiplied by the Advance Rate

 

5


applicable to each such Collateral Vessel (provided that, where a Concentration Limit Event has occurred and is continuing, there shall be excluded from the Borrowing Base an amount equal to the Asset Values of Collateral Vessels solely to the extent such Asset Value exceeds the specified percentage thresholds set forth on Schedule 2.02); (b) any Additional Security multiplied by such percentage as shall be agreed between the Borrower and the Administrative Agent acting in their reasonable judgment; and (c) the then current balance of any amounts on deposit in the Collateral Account.

Borrowing Date” means any Business Day specified in a notice pursuant to Section 2.01 or 2.02 as a date on which any Borrower requests the Lenders to make Loans hereunder.

Borrowing Request” means a request for a Term Loan Borrowing which shall be in such form as the Administrative Agent may approve.

Business Day” means any day that is not a Saturday, Sunday or other day that is a legal holiday under the laws of the State of New York, the Province of British Columbia, the Province of Ontario or Hong Kong, or is a day on which banking institutions in such jurisdictions are authorized or required by Law to close; provided that (a) when used in connection with a LIBO Rate Loan, the term “Business Day” means any such day that is also a day on which dealings in Dollar deposits are conducted by and between banks in the London interbank market and (b) when used in connection with any Borrowing Date, the term “Business Day” shall also exclude any day which is a legal holiday in Paris, Montreal and Taipei.

Cash Sweep Event” means a BB Event or a DSCR Cash Sweep Event.

Change in Law” means 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, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

Change of Control” means the acquisition, directly or indirectly, by any person or group of persons other than a UBO of beneficial ownership of more than 50% of the aggregate outstanding voting power of the equity interests of the Guarantor.

Charged Accounts” means each of: (a) the Collection Account; (b) the Collateral Account; (c) the HK Collection Account; and (d) any Vessel Owner Account, and each such account shall be held with the Account Bank in the name of (in the case of any Vessel Owner Account) the relevant Vessel Owner and (in all other cases) the Borrower.

Charter” means any charter or contract for the use, employment or operation of a vessel or the carriage of people and/or cargo or the provision of services by or from such vessel.

Charter Guarantees” means in relation to each of the Collateral Vessels, any guarantee provided or to be provided by a Charter Guarantor in relation to a Charterer’s obligations under a Charter and “Charter Guarantee” means any of them.

 

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Charter Guarantor” means any guarantor of a Charterer’s obligations under a Charter.

Charter Termination Fee” means any amount due to the Borrower or Vessel Owner from a Charterer or Charter Guarantor as a result of or in connection with the termination of a Charter.

Charterer” means any charterer of a Collateral Vessel, and “Charterer” shall mean any of them.

Charterer’s Undertaking” means, in respect of any Collateral Vessel which is subject to a Charter which is a demise or bareboat charter, an undertaking from the Charterer in favor of the Security Trustee in substantially the form set out in Exhibit E (or in such other form as the Security Trustee and Borrower may agree).

Classification Society” means Lloyds Register of Shipping, DNV GL, or any other member of the International Association of Classification Societies.

Closing Date” means the date of the Initial Credit Agreement.

Code” means the Internal Revenue Code of 1986.

Collateral Vessel” means each or any, as the context may require, of the Identified Vessels and Additional Vessels which are from time to time the subject of a Borrowing or a Borrowing Request or which are otherwise mortgaged or over which security is granted to secure Program Debt, and any Substitute Vessel that has satisfied the requirements of Section 6.05, but excluding any Collateral Vessel which has been sold and which no longer constitutes part of the Security, in each case in accordance with this Agreement.

Collateral Vessel Delta” means for each Collateral Vessel, the percentage difference between (i) that Collateral Vessel’s Average Efficiency Ratio for the relevant Delta Test Period, and (ii) the then current and applicable IMO Decarbonization Trajectory (for a vessel’s average efficiency ratio) expressed as a positive or negative percentage (+/-)% as calculated by the Lead Sustainability Coordinator with reference to the Decarbonization Certificate and the Compliance Data, on each Delta Test Date per the formula below:

 

LOGO

where rs is the required average efficiency ratio for the ship type and size class for the relevant calendar year period as determined by the related IMO Decarbonization Trajectory. For the sake of clarity, a positive Collateral Vessel Delta means that a Collateral Vessel is misaligned and above the then current and applicable IMO Decarbonization Trajectory (for a vessel’s average efficiency ratio). A zero or negative Collateral Vessel Delta means that a Collateral Vessel is aligned and on or below the then current and applicable IMO Decarbonization Trajectory (for a vessel’s average efficiency ratio).

Collection Account” means the account of the Borrower maintained with Bank of Montreal with account number 0004-4624-914.

Commitment Fee” means the fees payable by the Borrower pursuant to Sections 2.09(b) and (c).

Commitments” means, the Term Loan Commitments.

 

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Communications” has the meaning specified in Section 9.01(d)(ii).

Compliance Certificate” means the form of certificate attached at Exhibit B.

Compliance Data” means all information necessary for and/or reasonably requested by the Lead Sustainability Coordinator, in order for the Lead Sustainability Coordinator (i) to calculate the AER and/or the Collateral Vessel Delta, including, without limitation, all ship fuel oil consumption data required to be collected and reported in accordance with Regulation 22A of Annex VI and any Statement of Compliance provided by a Recognized Organization, in each case relating to any relevant Collateral Vessel for the relevant Delta Test Period, and (ii) to verify the existence and suitability of a Sustainability Linked Charter Mechanism in a Qualifying Charter Contract, including, without limitation, the relevant extracts (certified by a Responsible Officer of the Borrower) of the provisions of the corresponding Qualifying Charter Contracts, in each case relating to any relevant vessel owned by the Guarantor Group for the relevant Delta Test Period.

Concentration Limit Event” means the occurrence and continuance of any breach of the Concentration Limit Requirements.

Concentration Limit Requirements” has the meaning specified in Schedule 2.02.

Concentration Test Date” means each of the following dates: (a) each Borrowing Date; (b) each Vessel Substitution Date; (c) each Vessel Disposition Date; (d) any date on which a Vessel Owner proposes entering into a new Eligible Charter in respect of a Collateral Vessel; and (e) each other Test Date.

Consolidated Tangible Net Worth” means, as of any date of determination, for the Guarantor on a consolidated basis, total shareholders’ equity as reported in the most recently delivered balance sheet of the Guarantor and its consolidated Subsidiaries adjusted by:

(a) adding any subordinated debentures (being convertible debentures and other equity linked instruments which are subordinate to the rights of its unsecured creditors generally and which are akin to equity), mezzanine equity and redeemable shares;

(b) adding the amount referred to in Schedule 1.01 for the date of such balance sheet (as the same may be adjusted from time to time to reflect the sale of any of the vessels referred to in Schedule 1.01 whether or not they are Collateral Vessels or Collateral Vessels at the date of their sale, following the date of this Agreement);

(c) deducting any amount attributable to goodwill or any other intangible asset; and

(d) reflecting any variation in the amount of the issued share capital of the Guarantor since the date of such balance sheet.

Contracted Net Cash Flow” means, in respect of any Collateral Vessel and Eligible Charter, the contracted cash flow payable to the applicable Vessel Owner under such Eligible Charter, reduced by US$6,800 per day (which amount shall be escalated on an annual basis at the LTM Rate); provided that such reduction shall not apply to the calculation of the Contracted Net Cash Flow for any Collateral Vessel which is subject to a bareboat or demise charter; and provided further that Contracted Net Cash Flow in respect of any Collateral Vessel and Eligible Charter and any extension period shall be deemed to be zero to the extent that, as of the relevant date, the applicable contracted cash flow payable during such extension period (or part thereof) is uncertain or is not capable of being conclusively calculated.

 

8


Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings analogous thereto.

Co-Sustainability Coordinators” means each of Citibank, N.A., Bank of Montreal and Wells Fargo Bank, N.A., in their respective capacities as co-sustainability coordinators.

Credit Extension” means a Borrowing.

DCF Value” means the sum of (i) the Present Value of Contracted Net Cash Flow in respect of the relevant Collateral Vessel, plus (ii) the Terminal Value of such Collateral Vessel.

Debtor Relief Laws” means the Bankruptcy Code of the United States of America, 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.

Debtor Relief Plan” means a plan of reorganization or plan of liquidation pursuant to any Debtor Relief Laws.

Decarbonization Certificate” means the form of certificate attached at Exhibit D.

Deed of Covenants” means, in respect of a Collateral Vessel, the deed of covenants entered into or to be entered into by the relevant Vessel Owner and the Security Trustee collateral to the Mortgage over that Collateral Vessel.

Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

Default Rate” means an interest rate (before as well as after judgment) equal to the applicable interest rate set forth in Section 2.08(a) plus 2.00% per annum.

Defaulting Lender” means, subject to Section 2.20(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within two Business Days of the date when due, (b) has notified the Borrower or the Administrative Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public

 

9


statement) cannot be satisfied), (c) has failed, within two (2) Business Days after request by the Borrower or the Administrative Agent, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans, or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, or (iii) become the subject of a Bail-in Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from (A) the jurisdiction of courts within the United States, or (B) with respect to any Lender that is otherwise subject to the jurisdiction of courts outside the United States, the jurisdiction of such courts, or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.20(b)) upon delivery of written notice of such determination to the Borrower and each Lender.

“Delta Test Date” means June 30, 2022 and thereafter each anniversary of such date in each subsequent calendar year provided that if any such date shall not be a Business Day, the relevant Delta Test Date shall be the immediately succeeding Business Day.

“Delta Test Period” means the twelve (12) calendar month period commencing on January 1 ending on December 31 immediately prior to the relevant Delta Test Date.

Determination Date” means the last day of each of February, May, August and November in each year.

Dollar” and “$” mean lawful money of the United States.

DSCR Cash Sweep Event” means, as of any date of determination, the failure of the DSCR Ratio as of such date to be at least equal to 1.25:1.0x.

DSCR Ratio” means, with respect to the last two fiscal quarters for the Borrower, the ratio of: (a) EBITDA of the Borrower for such period, to (b) the aggregate amount of scheduled principal and interest payable (excluding any final payments due at maturity) in respect of Program Debt during the applicable period (whether or not actually paid during such period and disregarding any voluntary prepayments made at the Borrower’s election in accordance with Section 2.05(b)(ii)), plus any Commitment Fees payable during such period, plus any amounts paid by the Borrower during such period under any Hedging Agreements.

Earnings” means, in respect of a Collateral Vessel, all present and future moneys and claims which are earned by or become payable to or for the account of the Borrower or Vessel Owner in connection with the operation or ownership of that Collateral Vessel and including but not limited to: (a) freights, passage and hire moneys (howsoever earned); (b) remuneration for salvage and towage services; (c) demurrage and detention moneys; (d) all moneys and claims in respect of the requisition for hire of that Collateral Vessel; (e) payments received in respect of any off-hire insurance; (f) payments received pursuant to any Charter Guarantee relating to that Collateral Vessel; and (g) Charter Termination Fees or other payments in respect of the termination of any Charter, including without limitation, pursuant to legal proceedings, arbitration or other settlement arrangements.

 

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EBITDA” means the net income of the Guarantor (on a consolidated basis) or the Borrower, as applicable, for a Measurement Period as adjusted by:

(a) adding back taxation;

(b) adding back Interest Expenses;

(c) taking no account of any extraordinary item;

(d) excluding any amount attributable to minority interests;

(e) adding back depreciation and amortization, including amounts relating to operating leases but with the exception of amortization of dry-docking costs;

(f) adding back non-cash expenses and deducting non-cash gains, including mark to market on Hedging Agreements and any other financial instruments and stock based compensation;

(g) adding bareboat charter fees and deducting bareboat related interest income from leasing;

(h) taking no account of any revaluation of an asset or any loss or gain over book value, whether or not arising on the disposal of an asset (otherwise than in the ordinary course of trading) by the Guarantor or the Borrower, as applicable, during that Measurement Period; and

(i) adding proportionate distributions from unconsolidated entities to the Guarantor or the Borrower, as applicable.

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

EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

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

EEOI” means the Energy Efficiency Operational Indicator, developed by the International Maritime Organization in order to allow shipowners to measure the fuel efficiency of a ship in operation.

 

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Eligibility Criteria” means: (a) such vessel shall be a container vessel that satisfies the requirements in respect of a Collateral Vessel set out in this Agreement; (b) such vessel shall be owned by (and not leased or chartered to) a Vessel Owner on the Borrowing Date; (c) its inclusion as a Collateral Vessel shall not give rise to a Default, a Concentration Limit Event, a BB Event or a DSCR Cash Sweep Event; and (d) it and any contract of employment or charter for such vessel shall comply with all requirements set out in the Loan Documents as if it was a Collateral Vessel and its owner was a Vessel Owner.

Eligible Assignee” as the meaning given to it in Section 9.04(b).

Eligible Charter” shall mean any firm contract for the employment of a Collateral Vessel with a Person other than a member of the Guarantor Group which has a remaining fixed term of not less than 3 months (which shall include any extension options which (i) if at the option of the Charterer, have been exercised, (ii) if at the option of the Vessel Owner, have or have not yet been exercised and (iii) are automatically exercised (without any condition, requirement or other arrangement whereby such extension will not occur other than a determination from the Vessel Owner otherwise)), and shall include any charter providing the applicable Vessel Owner with a termination right.

Environmental Approvals” means any permit, license, approval, ruling, variance, exemption or other authorization required under applicable Environmental Laws.

Environmental Laws” means any and all federal, state, local, and foreign statutes, Laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions, including all common law, relating to pollution or the protection of health, safety or the environment or the release of any materials into the environment, including those related to Hazardous Materials, air emissions, discharges to waste or public systems and health and safety matters.

Environmental Liability” means any liability or obligation, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), directly or indirectly, resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment, disposal or permitting or arranging for the disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

Environmental Representative” means each Vessel Owner and the Manager together with their respective employees and all of those persons for whom such Vessel Owner or the Manager is responsible under any Applicable Law in respect of any activities undertaken in relation to any of the Collateral Vessels.

Equity Interests” means, as to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

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

 

12


Event of Default” has the meaning specified in Article VII.

Excess Risks” means, in respect of a Collateral Vessel: (a) the proportion of claims for general average, salvage and salvage charges which are not recoverable as a result of the value at which that Collateral Vessel is assessed for the purpose of such claims exceeding her hull and machinery insured value; and (b) collision liabilities not recoverable in full under the hull and machinery insurance by reason of those liabilities exceeding such proportion of the insured value of that Collateral Vessel as is covered by the hull and machinery insurance.

Excluded Collateral Vessels” means each of:

(a) any Collateral Vessel with respect to which (i) any Security Document to which such Collateral Vessel or the applicable Vessel Owner is subject ceases to be valid in any material respect or (ii) any Security Document creating a Security Interest in such Collateral Vessel or the applicable Vessel Owner in favor of the Security Trustee ceases to provide a perfected first priority security interest in favor of the Security Trustee in such Collateral Vessel or the applicable Vessel Owner as a result of the act or inaction of an Obligor; and

(b) any Collateral Vessel with respect to which the registration at the registry of any Approved Flag State is cancelled or any Collateral Vessel that is arrested or otherwise detained and not released within thirty (30) days.

Excluded Taxes” means 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, 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), and (b) any withholding Taxes imposed under FATCA.

FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively 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)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.

Federal Funds Effective Rate” means, for any day, the greater of (a) the rate calculated by the Federal Reserve Bank of New York based on such day’s Federal funds transactions by depositary institutions (as determined in such manner as the Federal Reserve Bank of New York shall set forth on its public website from time to time) and published on the next succeeding Business Day by the Federal Reserve Bank of New York as the Federal funds effective rate and (b) 0%.

Federal Reserve Board” means the Board of Governors of the Federal Reserve System of the United States.

Fee Letters” means any letter between (inter alios) any Finance Party and any Obligor which states that it is a “Fee Letter” for the purposes of this Agreement and “Fee Letter” means any of them.

Fees” means the Commitment Fee and other fees payable pursuant to any Fee Letter.

 

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Finance Party” means, collectively, each Lender, any Receiver and any Administrative Party.

Financial Officer” means, as to any Person, the chief financial officer, principal accounting officer, treasurer or controller of such Person.

GAAP” means, subject to Section 1.03, United States generally accepted accounting principles as in effect as of the date of determination thereof.

General Assignment” means in respect of a Collateral Vessel, the assignment of its Eligible Charter, any Charter Guarantee, any Requisition Compensation and the Earnings granted or to be granted by the relevant Vessel Owner in favor of the Security Trustee, together with any and all notices and acknowledgements entered into in connection therewith.

Global Coordinator” means Citibank, N.A., in its capacity as global coordinator, and left lead mandated lead arranger and joint-bookrunner.

Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state 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 (including any supra-national bodies such as the European Union or the European Central Bank).

Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part) or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien); provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

Guarantor Financial Covenants” means the requirements set forth in Section 6.09(c) to (f).

Guarantor Group” means the Guarantor and each of its Subsidiaries.

 

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Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes, and other substances or wastes of any nature regulated under or with respect to which liability or standards of conduct are imposed pursuant to any Environmental Law.

HK Collection Account” means the account of the Borrower maintained with Citibank, N.A., Hong Kong Branch with account number 1004151018.

Identified Vessels” means the vessels referred to in Exhibit C.

IMO Decarbonization Trajectory” means the standard decarbonization trajectories produced or to be produced (as the case may be) from time to time by the Secretariat of the Poseidon Principles for each ship type and size class, being a representation of how many grams of CO2 a single vessel can emit to move one tonne of goods one nautical mile (gCO2/tnm) over the relevant time horizon, and on any Delta Test Date the IMO Decarbonization Trajectory shall be the most recent standard decarbonization trajectory which is applicable to the relevant Delta Test Period. The IMO Decarbonization Trajectory measured with reference to average efficiency ratio for containerships as of the date hereof (and as may be updated from time to time) is as per below:

 

Size (TEU)

   2020      2021      2022      2023      2024      2025      2026  

0-999

     17.663577        17.194349        16.725121        16.255893        15.786665        15.317437        14.848209  

1,000-1,999

     15.480516        15.069280        14.658045        14.246809        13.835574        13.424338        13.013103  

2,000-2,999

     10.429868        10.152802        9.875735        9.598669        9.321602        9.044536        8.767469  

3,000-4,999

     8.677976        8.447448        8.216920        7.986392        7.755864        7.525336        7.294808  

5,000-7,999

     8.199880        7.982053        7.764225        7.546398        7.328570        7.110743        6.892915  

8,000-11,999

     6.982743        6.797249        6.611754        6.426260        6.240765        6.055270        5.869776  

12,000-14,500

     4.844465        4.715773        4.587082        4.458390        4.329698        4.201006        4.072314  

> 14,500

     4.844465        4.715773        4.587082        4.458390        4.329698        4.201006        4.072314  

Incremental Commitment” has the meaning specified in Section 2.21(a).

Incremental Commitment Effective Date” has the meaning specified in Section 2.21(c).

Incremental Lender” has the meaning specified in Section 2.21(b).

Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

 

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(b) all direct or contingent obligations of such Person arising under (i) letters of credit (including standby and commercial), bankers’ acceptances and bank guaranties and (ii) surety bonds, performance bonds and similar instruments issued or created by or for the account of such Person;

(c) net obligations of such Person under any Hedging Agreement;

(d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(f) any agreement treated as a finance or capital lease in accordance with GAAP; and

(g) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Hedging Agreement on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any Indebtedness of any Person for purposes of clause (e) that is expressly made non-recourse or limited-recourse (limited solely to the assets securing such Indebtedness) to such Person shall be deemed to be equal to the lesser of (i) the aggregate principal amount of such Indebtedness and (ii) the fair market value of the property encumbered thereby as determined by such Person in good faith.

Indemnified Taxes” means (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 Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.

Indemnitee” has the meaning specified in Section 9.03(b).

Information” has the meaning specified in Section 9.12.

Initial Credit Agreement” means that certain Credit Agreement dated as of December 30, 2019 by and among certain of the parties hereto, as in effect immediately prior to the Restatement Date.

Insurances Assignment” means, in respect of a Collateral Vessel, the assignment of the Obligatory Insurances granted or to be granted in favor of the Security Trustee by the relevant Vessel Owner together with any and all notices and acknowledgments entered into in connection therewith.

Insurers” means the underwriters or insurance companies with whom any Obligatory Insurances are effected and the managers of any protection and indemnity or war risks association in which any or the Collateral Vessels may at any time be entered.

 

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Intercreditor Agreement” means the intercreditor and proceeds agreement dated as of May 15, 2019 as amended and restated on or about the Restatement Date among, inter alios, the Borrower, the Guarantor, the Administrative Agent and the Security Trustee (as further amended and/or restated from time to time).

Interest and Principal Coverage Ratio” means, as at any date of determination and with respect to any period, the ratio of EBITDA for such period to Interest and Principal Expense for such period.

Interest and Principal Expense” means all Interest Expense incurred and all scheduled payments of principal (excluding any final payment thereof due on the maturity date thereof) made by the Guarantor and its consolidated Subsidiaries during a Measurement Period.

Interest Expense” means all cash interest and cash commitment fees incurred by the Guarantor or the Borrower, as applicable, and its consolidated Subsidiaries during a Measurement Period.

Interest Payment Date” means each Payment Date and the Maturity Date.

Interest Period” means, with respect to each Borrowing and the Loans constituting the same, the period commencing on the relevant Borrowing Date and ending on the next Interest Payment Date, and thereafter each period commencing on the last day of the preceding Interest Period and ending on the Interest Payment Date immediately succeeding such last day; provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period, and (iii) no Interest Period shall extend beyond the relevant Maturity Date.

Interpolated Rate” means, at any time, the rate per annum determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the rate as displayed on the applicable Bloomberg page (or on any successor or substitute page or service providing quotations of interest rates applicable to dollar deposits in the London interbank market comparable to those currently provided on such page, as determined by the Administrative Agent from time to time; in each case the “Screen Rate”) for the longest period (for which that Screen Rate is available) that is shorter than the Interest Period and (b) the Screen Rate for the shortest period (for which that Screen Rate is available) that exceeds the Interest Period, in each case, at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

Intra Group Loan” means:

(a) any loan or other Indebtedness advanced by an Obligor, as lender, to any other Obligor (other than the Guarantor), as borrower; and

(b) any loan or other Indebtedness owing by the Borrower to a member of the Guarantor Group which is, as at the Closing Date, the shareholder of the owner of m.v. “Seaspan Thames”, “CMA CGM Tuticorin”, “MOL Brilliance”, “MOL Belief”, “YM World”, YM Wondrous”, “MOL Beauty” or “YM Wreath” or any other vessel owned, as at the Closing Date, directly or indirectly by Greater China Intermodal Investments LLC for purposes of adding a Collateral Vessel to the Collateral.

 

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Intra Group Loan Agreement” means any agreement in respect of an Intra Group Loan .

IRS” means the United States Internal Revenue Service.

ISM Code” means the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organization Assembly as Resolutions A.741(18) and A.788(19), as the same may have been or may be amended or supplemented from time to time. The terms “safety management system”, “Safety Management Certificate”, “Document of Compliance” and “major non-conformity” shall have the same meanings as are given to them in the ISM Code.

ISP” means the International Standby Practices, International Chamber of Commerce Publication No. 590 (or such later version thereof as may be in effect at the applicable time).

ISPS Code” means the International Ship and Port Facility Security Code adopted by the International Maritime Organization Assembly as the same may have been or may be amended or supplemented from time to time.

Joinder Agreement” means a joinder or similar agreement entered into by any Person (including any Lender) under Section 2.21 pursuant to which such Person shall provide an Incremental Commitment hereunder and (if such Person is not then a Lender) shall become a Lender party hereto.

Laws” means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

Lead Sustainability Coordinator” means Société Générale, Hong Kong Branch, in its capacity as lead sustainability coordinator.

Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall have become party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.

LIBO Rate” means, for any Interest Period with respect to any Borrowing, the greater of (a) the rate appearing on the applicable Bloomberg page (or on any successor or substitute page or service providing quotations of interest rates applicable to dollar deposits in the London interbank market comparable to those currently provided on such page, as determined by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period; provided that (i) if such rate is not available at such time for any reason, then the “LIBO Rate” for such Interest Period shall be the Interpolated Rate, and (ii) if the Interpolated Rate is not available, the “LIBO Rate” for such Interest Period shall be the Reference Bank Rate and (b) 0%.

 

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Lien” means any mortgage, pledge, hypothecation, collateral assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

Loans” means the Term Loan.

Loan Documents” means, collectively, this Agreement, the Intercreditor Agreement, the Hedging Agreements (in relation to the Loans), any subordination agreement entered into in connection with Section 5.02(g) of the Intercreditor Agreement, the Security Documents, any Borrowing Request, the Fee Letters and any other documents entered into in connection herewith.

LTM Rate” means the most recent US CPI rate as published by the U.S. Bureau of Labor Statistics, provided that the applicable indexation will have a floor of 0% p.a. and a cap of 3% p.a..

Management Agreement” means each management agreement between a Vessel Owner and the Manager in respect of a Collateral Vessel, as the same may be amended from time to time in accordance with this Agreement.

Management Agreement Assignment” means each assignment of a Management Agreement granted or to be granted in favor of the Security Trustee by a Vessel Owner with any and all notices and acknowledgements entered into in connection therewith, one to be entered into between the Manager and the relevant Vessel Owner.

Manager” means Seaspan Management Services Ltd. of Clarendon House, 2 Church Street, Hamilton, HM 11, Bermuda or such other professional manager or managers as may be approved by the Administrative Agent from time to time, provided that V.Group, Anglo-Eastern and Bernhard Schulte Shipmanagement are so approved for these purposes.

Manager’s Undertaking” means, in respect of each Collateral Vessel, a letter of undertaking to be issued by the Manager to the Security Trustee confirming it shall not make a claim to security ranking ahead of the Lenders’ security in respect of that Collateral Vessel in form and substance satisfactory to the Administrative Agent.

Mandated Lead Arrangers” means each of Bank of Montreal, National Australia Bank Limited, Bank of America, N.A. and Wells Fargo Bank, N.A., in their respective capacities as mandated lead arrangers and joint-bookrunners.

Margin” means, for any Loan, (i) from the Restatement Date until September 4, 2022, 1.90%per annum., and (ii) for any Margin Period thereafter, the aggregate of:

 

  (a)

the Margin applicable in the immediately preceding Margin Period; and

 

  (b)

(i) any Applicable Performance Margin Adjustment for the relevant Margin Period, minus (ii) any Applicable Charter Margin Adjustment in the immediately preceding Margin Period, plus (iii) any Applicable Charter Margin Adjustment for the relevant Margin Period, save that the collective aggregate of the foregoing (b)(i), (b)(ii) and (b)(iii) may not (A) exceed 0.025% per annum or (B) be less than -0.025% per annum, in each case for any single Margin Period (relative to the prior Margin Period),

 

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provided that, the collective aggregate of the foregoing paragraphs (a) and (b) shall not (X) exceed 1.95% per annum for any single Margin Period, or (Y) be less than 1.85% per annum for any single Margin Period,

and provided further that, where the Borrower fails to deliver any of the Compliance Data, other items contemplated by Section 5.34(a) hereof and/or any Decarbonization Certificate required by this Agreement, in order to determine any Applicable Charter Margin Adjustment for the relevant Margin Period, the foregoing paragraph (b) shall be replaced with and applied as follows:

“(b) (i) 0.0125% per annum, minus (ii) any Applicable Charter Margin Adjustment in the immediately preceding Margin Period, save that the collective aggregate of the foregoing (b)(i) and (b)(ii) may not (A) exceed 0.025% per annum or (B) be less than -0.025% per annum, in each case for any single Margin Period (relative to the prior Margin Period),”.

Margin Period” means (i) for the first Margin Period, the period commencing on the Restatement Date and ending on September 4, 2022, and (ii) for any subsequent period, each 12 month period commencing on the September 5 Interest Payment Date which follows a Delta Test Date and ending on September 4, the following year (or if earlier, the Maturity Date).

Market Value” means, in respect of any Collateral Vessel, the average of the two values of such Collateral Vessel provided by the Approved Valuers.

Material Adverse Effect” means a material adverse effect on (a) the ability of the Borrower to perform its Obligations, (b) the legality, validity, binding effect or enforceability against the Borrower of any Loan Document to which it is a party or (c) the rights, remedies and benefits available to, or conferred upon, the Administrative Parties, any Lender or any Hedge Counterparties under any Loan Documents.

Maturity Date” means the date falling six (6) years after the Restatement Date or, if such date is not a Business Day, on the immediately preceding Business Day.

Maximum Rate” has the meaning specified in Section 9.14.

Measurement Period” means, at any time, the last four fiscal quarters for the Guarantor or the Borrower, as applicable.

Mortgage” means, in respect of a Collateral Vessel, the first priority or first preferred ship mortgage, each given or to be given by the relevant Vessel Owner in favor of the Security Trustee and registered with the Approved Flag State registry of such Collateral Vessel.

Non-Consenting Lender” means any Lender that does not approve any consent, waiver or amendment that (a) requires the approval of all or all affected Lenders in accordance with the terms of Section 9.02 and (b) has been approved by the Required Lenders.

Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.

Non-Extension Notice Date” has the meaning specified in Section 2.07(b).

 

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Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, the Borrower arising under any Loan Document or Hedging Agreement or otherwise with respect to any Loan, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against the Borrower or any other Obligor thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding. Without limiting the foregoing, the Obligations include (a) the obligation to pay principal, interest, charges, expenses, fees, indemnities and other amounts payable by the Borrower under any Loan Document or Hedging Agreement and (b) the obligation of the Borrower to reimburse any amount in respect of any of the foregoing that the Administrative Agent or any Lender, in each case in its sole discretion, may elect to pay or advance on behalf of the Borrower.

Obligatory Insurances” means, in respect of each Collateral Vessel: (a) all contracts and policies of insurance and all entries in clubs and/or associations which are from time to time required to be effected and maintained in accordance with this Agreement in respect of each of the Collateral Vessels; and (b) all benefits under the contracts, policies and entries under subsection (a) above and all claims in respect of them and the return of premiums.

Obligor” means the Borrower, the Guarantor and the Vessel Owners.

OFAC” has the meaning specified in Section 3.16(a).

Organizational Documents” means (a) as to any corporation, the charter or certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction), (b) as to any limited liability company, the certificate or articles of formation or organization and operating or limited liability agreement and (c) as to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

Original Financial Statements” means the consolidated financial statements of the Guarantor for the financial year ended 31 December 2020.

Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document.

Participant” has the meaning specified in Section 9.04(d).

Participant Register” has the meaning specified in Section 9.04(d).

PATRIOT Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).

Payment Date” means each March 5, June 5, September 5, December 5 commencing on June 5, 2021, provided that if any such date is not a Business Day, the relevant Payment Date shall be the immediately succeeding Business Day.

Payment Disruption Event” means either or both of:

 

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(a) a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Loan Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or

(b) the occurrence of any other event which results in a disruption (of a technical or systems related nature) to the treasury or payments operations of a Party preventing that, or any other Party: (i) from performing its payment obligations under the Loan Documents; or (ii) from communicating with other Parties in accordance with the terms of the Loan Documents,

(and which (in either such case)) is not caused by, and is beyond the control of, the Party whose operations are disrupted.

Permitted Liens” means, in respect of a Collateral Vessel: (a) Security Interests created by the Security Documents; (b) liens for unpaid crew’s wages including wages of the master and stevedores employed by the Collateral Vessel, outstanding in the ordinary course of trading for not more than one calendar month after the due date for payment; (c) liens for salvage; (d) liens for classification or scheduled dry docking or for necessary repairs to that Collateral Vessel that in each case are outstanding for not more than one month; (e) liens for collision; (f) liens for master’s disbursements incurred in the ordinary course of trading; (g) statutory and common law liens of carriers, warehousemen, mechanics, suppliers, materials men, repairers or other similar liens, including maritime liens, in each case arising in the ordinary course of business, outstanding for not more than one month and (h) liens for damages arising from maritime torts which are unclaimed, or are covered by insurance and any deductible applicable thereto, or in respect of which a bond or other security has been posted on behalf of the relevant Vessel Owner with the appropriate court or other tribunal to prevent the arrest or secure the release of such Collateral Vessel from arrest; provided that in the case of subsections (b) to (g) inclusive the amounts which give rise to such liens are paid when due (or, in the case of subsections (b) or (g) above, within one month of such amount being outstanding) or, if not paid when due are being disputed in good faith by appropriate proceedings (and for the payment of which adequate reserves or security are at the relevant time maintained or provided), provided further that such proceedings, whether by payment of adequate security into court or otherwise, do not give rise to a material risk of the relevant Collateral Vessel or any interest therein being seized, sold, forfeited or otherwise lost or of criminal liability on an Indemnitee.

Platform” means Debt Domain, Intralinks, Syndtrak, DebtX or a substantially similar electronic transmission system.

Poseidon Principles” means the financial industry framework for assessing and disclosing the climate alignment of ship finance portfolios published in June 2019 as the same may be amended or replaced to reflect changes in applicable law or regulation or the introduction of or changes to mandatory requirements of the International Maritime Organization from time to time.

Prepayment Notice” means a notice by the Borrower to prepay Loans, which shall be in such form as the Administrative Agent may approve.

Present Value of Contracted Net Cash Flow” means, in respect of any Collateral Vessel and Eligible Charter, the Contracted Net Cash Flow in respect thereof discounted using a discount rate of 10% per annum (or, where the Terminal Value provider is VesselsValue, 8% per annum).

Program Debt” has the meaning specified in the Intercreditor Agreement.

 

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Program Debt Documents” means (a) the credit agreement dated 15 May 2019 between, among others, the Borrower, the Guarantor, the Administrative Agent and the Lenders (as defined therein) party thereto from time to time as amended and restated on or about the Restatement Date; (b) the credit agreement dated 14 October 2020 between, among others, the Borrower, the Guarantor, the Administrative Agent and the Lenders (as defined therein) party thereto from time to time, as amended and restated on or about the Restatement Date ((a) and (b) together being the “Existing Program Debt Documents”); and (c) any other Additional Debt Document.

Purchase Agreement” means, in respect of a Collateral Vessel, the memorandum of agreement or purchase agreement entered into or to be entered into between the relevant seller of such Collateral Vessel and the Vessel Owner, as buyer.

QCC Target Ratio” means in respect of any QCC Test Period, the proportion expressed as a percentage (Q) of (i) the number of Qualifying Charter Contracts which are executed and dated during that QCC Test Period (and, if elected by the Borrower, any Qualifying Charter Contracts which are extended or renewed during such period (such Qualifying Charter Contracts being referred to herein as “Renewals”)) and which contain a Sustainability Linked Charter Mechanism, to (ii) the total number of Qualifying Charter Contracts which are executed and dated during such QCC Test Period (and any Renewals) and calculated per the formula below:

 

LOGO

where SC is the number Qualifying Charter Contracts which are executed and dated during that QCC Test Period (and any Renewals) and which contain a Sustainability Linked Charter Mechanism and T is the total number Qualifying Charter Contracts which are executed and dated during the same QCC Test Period (and any Renewals).

QCC Test Date” means, at the election of the Lead Sustainability Coordinator, a Business Day falling on or before June 30, 2022 and thereafter each anniversary of such date in each subsequent calendar year provided that if any such date shall not be a Business Day, the relevant QCC Test Date shall be the immediately succeeding Business Day.

QCC Test Period” means the twelve (12) calendar month period commencing on January 1 and ending on December 31 immediately prior to the relevant QCC Test Date.

Qualifying Charter Contracts” means any firm contract for the employment of a vessel owned by a member of the Guarantor Group with a Person other than a member of the Guarantor Group, which has a remaining fixed term of not less than 12 months (which shall include any extension options which (i) if at the option of the Charterer, have been exercised, (ii) if at the option of the relevant vessel owner, have or have not yet been exercised and (iii) are automatically exercised (without any condition, requirement or other arrangement whereby such extension will not occur other than a determination from the relevant vessel owner otherwise)), and shall include any charter providing the applicable vessel owner with a termination right.

Receiver” means a receiver or receiver and manager or administrative receiver of the whole or any part of the Security Assets appointed under any Security Document.

Recipient” means (a) the Administrative Agent or (b) any Lender, as applicable.

 

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Recognized Organization” means, in respect of a Collateral Vessel, an organization approved by the maritime administration of the Collateral Vessel’s flag state to verify that the ship energy efficiency management plans of vessels registered in such flag state are in compliance with Regulation 22A of Annex Vl and to issue “statements of compliance for fuel consumption reporting” confirming that vessels registered in such flag state are in compliance with that regulation, including any Classification Society.

Reference Bank Rate” means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Administrative Agent at its request by the Reference Banks:

(a) (other than where paragraph (b) below applies) as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in the relevant currency and for the relevant period were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period; or

(b) if different, as the rate (if any and applied to the relevant Reference Bank and the relevant currency and period) which contributors to the applicable Screen Rate are asked to submit to the relevant administrator,

provided that if none or only one of the Reference Banks supplies a quotation, there shall be no Reference Bank Rate for the relevant Interest Period.

Reference Banks” means Citibank, N.A., Bank of Montreal and Wells Fargo Bank, N.A., or such banks as otherwise may be appointed from time to time by the Administrative Agent in consultation with the Lenders and with the Borrower.

Register” has the meaning specified in Section 9.04(c).

Related Contracts” means any or all of the following (as the context requires): (a) the Obligatory Insurances; (b) the Eligible Charters; (c) the Management Agreements; and (d) the Charter Guarantees.

Related Parties” means, with respect to any Person, such Person’s Affiliates, head office, other branches and regional offices, and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates, head office, other branches and regional offices.

Relevant Vessel” has the meaning specified in Section 4.02(a)(ii).

Relevant Vessel Owner” has the meaning specified in Section 4.02(a)(iii).

Removal Effective Date” has the meaning specified in Section 8.06(b).

Repayment Schedule” means the repayment schedule prepared in accordance with Section 2.03.

Required Deductible Amount” means, in respect of the Obligatory Insurances for a Collateral Vessel, an amount not to exceed the following amounts:

 

  (a)

in respect of hull cover, US$1,000,000;

 

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  (b)

in respect of crew cover, US$30,000;

 

  (c)

in respect of collision cover, US$150,000;

 

  (d)

in respect of cargo cover, US$78,000; and

 

  (e)

in respect of any other cover, US$150,000.

Required Insurance Amount” means, in respect of a Collateral Vessel, the higher of (a) the amount which is 120% of the product of (i) the proportion of Market Value of such Collateral Vessel to the total Market Value of all Collateral Vessels, multiplied by (ii) the total outstanding amount of the Secured Obligations, and (b) the Market Value of such Collateral Vessel calculated as of the date on which such Collateral Vessel is added to the Security Assets and thereafter as of the date of the annual renewal of the relevant Obligatory Insurances.

Required Lenders” means, at any time, Lenders holding more than 50% of the aggregate principal amount of the Term Loan outstanding. The outstanding Loans and Commitments of any Defaulting Lender shall be disregarded in determining the “Required Lenders” at any time.

Requisition Compensation” means, in respect of a Collateral Vessel, all moneys or other compensation payable by reason of requisition for title to, or other compulsory acquisition of, that Collateral Vessel including requisition for hire.

Resignation Effective Date” has the meaning specified in Section 8.06(a).

Resolution Authority” means, an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.

Responsible Officer” means (a) the chief executive officer, president, executive vice president or a Financial Officer of the Borrower, (b) solely for purposes of the delivery of incumbency certificates and certified Organizational Documents and resolutions pursuant to Section 4.01, any vice president, secretary or assistant secretary of the Borrower and (c) solely for purposes of Borrowing Requests, certifying extracts of Qualifying Charter Contracts for the purposes of any Compliance Data, prepayment notices and notices for Commitment terminations or reductions given pursuant to Article II, any other officer or employee of the Borrower so designated from time to time by one of the officers described in clause (a) in a notice to the Administrative Agent (together with evidence of the authority and capacity of each such Person to so act in form and substance satisfactory to the Administrative Agent). Any document delivered hereunder that is signed by a Responsible Officer of the Borrower shall be conclusively presumed to have been authorized by all necessary corporate, partnership or other action on the part of the Borrower and such Responsible Officer shall be conclusively presumed to have acted on behalf of the Borrower.

Restatement Date” means the date on which each of the conditions specified in Section 4.04 is satisfied (or waived in accordance with Section 9.02), such date being May 19, 2021.

Sanctioned Jurisdiction” means, at any time, a country or territory that is the subject of Sanctions.

Sanctioned Person” means, at any time, (a) any Person listed in, or acting on behalf of a Person listed in, any Sanctions related list maintained by any Sanctions Authority, (b) any Person located, organized, or resident in a Sanctioned Jurisdiction, or (c) any other subject of Sanctions, including, without limitation, any Person controlled or 50 percent or more owned in the aggregate, directly or indirectly, by any subject or subjects of Sanctions.

 

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Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by any Sanctions Authority.

Sanctions Authority” means the United States (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, the U.S. Department of Commerce or through any existing or future statute or Executive Order), the United Kingdom (including, without limitation, Her Majesty’s Treasury), the European Union and any EU member state, the French Republic, the United Nations Security Council, Canada, Australia (including without limitation, the Department of Foreign Affairs and Trade) and Hong Kong Monetary Authority and any other governmental authority with jurisdiction over the Obligors.

Sanctions Target” means a Sanctioned Person or Sanctioned Jurisdiction.

Screen Rate” has the meaning specified in the definition of the term “Interpolated Rate”.

SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

Security Assets” means any asset which is the subject of a Security Interest created by a Security Document.

Security Documents” means: (a) the Mortgages; (b) the Deeds of Covenant; (c) the Insurances Assignments; (d) the Management Agreement Assignments; (e) the General Assignments; (f) the Account Charges; (g) the Manager’s Undertakings; (h) the Share Pledges; (i) any Charterer’s Undertakings, (j) any Additional Security; and (k) any other document designated as such in writing by the Borrower or any Vessel Owner and the Administrative Agent; in each case together with any and all notices and acknowledgements entered into and in connection therewith.

Security Interest” means any mortgage, pledge, lien, charge, assignment, hypothecation or security interest or any other agreement or arrangement having a similar effect.

Security Trustee” means UMB Bank, National Association.

Shareholders’ Equity” means, as of any date of determination, consolidated shareholders’ equity of the Borrower and its Subsidiaries as of such date determined in accordance with GAAP.

Share Pledge” means, in relation to the Borrower and each Vessel Owner, each first priority charge, pledge or mortgage or equivalent over the shares in the Borrower or Vessel Owner (as the case may be) to be given by: (a) in the case of the Borrower, the Guarantor; and (b) in the case of each Vessel Owner, the Borrower, in each case in favor of and in form and substance satisfactory to the Security Trustee and “Share Pledges” means all such share pledges.

Statement of Compliance” means a Statement of Compliance related to fuel oil consumption pursuant to regulations 6.6 and 6.7 of Annex VI.

 

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Subsidiary” of a Person means a corporation, partnership, limited liability company, association or joint venture or other business entity of which a majority of the Equity Interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time owned or the management of which is controlled, directly, or indirectly through one or more intermediaries, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

Substitute Vessel” has the meaning set forth in Section 6.05.

Sustainability Linked Charter Mechanism” means, in the sole opinion of the Lead Sustainability Coordinator, acting reasonably, a qualifying contractual provision of a Qualifying Charter Contract providing for the relevant charter rate to be increased and/or reduced, by an amount which is not less than 0.5% of the relevant initial charter rate, and where any such increase and reduction in the charter rate is subject to and dependent on the alignment of the relevant vessel’s carbon intensity, measured by that vessel’s AER, EEOI, or some other broadly accepted emissions metric for which the International Maritime Organization produces a related trajectory, with such trajectory.

Swap” means any trade or transaction entered into by the Borrower and a Hedge Counterparty under or pursuant to a Hedging Agreement.

Swap Termination Value” means, in respect of any one or more Swaps, after taking into account the effect of any legally enforceable netting agreement relating to such Swaps, (a) for any date on or after the date such Swaps have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swaps, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swaps (which may include a Lender or any Affiliate of a Lender).

Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

Terminal Value” means, in respect of any Collateral Vessel: (a) the present value (using a discount rate of 10% per annum) of the forward projected value for such Collateral Vessel as at the maturity of the relevant Eligible Charter (which shall, for these purposes, take account of any extension option which is included for the purposes of the definition of Eligible Charter for such Collateral Vessel) as provided by Maritime Strategies International Ltd; or (b) if the Borrower has elected that VesselsValue valuations shall be used for all Collateral Vessels on the applicable calculation date, the fixed age valuation for such Collateral Vessel as at the maturity of the relevant Eligible Charter (which shall, for these purposes, take account of any extension option which is included for the purposes of the definition of Eligible Charter for such Collateral Vessel) as provided by VesselsValue (with no discount rate applicable). Where the Eligible Charter of any Collateral Vessel has been extended and the Terminal Value on any Test Date would otherwise be calculated on the basis of valuations which pre-date such extension, the Borrower shall be permitted to obtain an updated valuation for such Collateral Vessel which shall be used for the purposes of calculating the Terminal Value of such Collateral Vessel.

Term Lender” means each Lender having a Term Loan Commitment.

Term Loan” has the meaning set forth in Section 2.01.

Term Loan Availability Period” means the period from the Restatement Date to but excluding the Term Loan Availability Termination Date.

 

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Term Loan Availability Termination Date” means the date falling six (6) months after the Restatement Date (or, if such date is not a Business Day, on the next preceding Business Day).

Term Loan Commitment” means, as to each Term Lender, the obligation of such Lender to make, on and subject to the terms and conditions hereof, a Term Loan to the Borrower pursuant to Section 2.01(b) in an aggregate principal amount up to but not exceeding the amount set forth opposite the name of such Lender in Schedule 2.01 under the heading “Term Loan Commitment” or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Term Loan Commitment, as applicable, as such amount may be reduced pursuant to Sections 2.05 or 2.06 or increased or reduced pursuant to assignments effected in accordance with Section 9.04.

Term Loan Required Payments” has the meaning given in Section 2.03(a)(i).

Test Date” means: (a) any BB Test Date; and (b) any Determination Date.

Total Assets” means, in respect of the Guarantor on a consolidated basis, the following, in each case as indicated on the most recently delivered financial statement of the Guarantor and its consolidated Subsidiaries:

(a) all of the assets of the types presented on its consolidated balance sheet; less

(b) assets under any vessel construction or ship purchase agreement (including novation and assignment and assumption agreements) that the Guarantor or any of its Subsidiaries is required to record on its books under GAAP even though such entity is no longer the legal owner of the vessel or legally obligated to take delivery of the vessel.

Total Borrowings” means, in respect of the Guarantor on a consolidated basis and without duplication, in each case as indicated on the most recently delivered financial statement of the Guarantor and its Subsidiaries, the aggregate of the following:

(a) the outstanding principal amount of any moneys borrowed; plus

(b) the outstanding principal amount of any acceptance under any acceptance credit; plus

(c) the outstanding principal amount of any bond, note, debenture or other similar instrument; plus

(d) the book values of indebtedness under a lease, charter, hire purchase agreement or other similar arrangement which would, in accordance with GAAP, be treated as a finance or capital lease; plus

(e) the outstanding principal amount of all moneys owing in connection with the sale or discounting of receivables (otherwise than on a non-recourse basis or which otherwise meet any requirements for de-recognition under GAAP); plus

(f) the outstanding principal amount of any indebtedness arising from any deferred payment agreements arranged primarily as a method of raising finance or financing the acquisition of an asset (except trade payables); plus

 

28


(g) any fixed or minimum premium payable on the repayment or redemption of any instrument referred to in clause (c) above; and plus

(h) the outstanding principal amount of any indebtedness of any Person other than a Subsidiary of the Guarantor of a type referred to in the above clauses of this definition which is the subject of a guarantee (or other agreement by which recourse is granted to the Guarantor) given by the Guarantor to the extent that such guaranteed indebtedness is determined and given a value in respect of the Guarantor on a consolidated basis in accordance with GAAP.

Notwithstanding the foregoing, “Total Borrowings” shall not include (a) Indebtedness or obligations arising from derivative transactions, such as protecting against interest rate or currency fluctuations or (b) Indebtedness under any vessel construction or ship purchase agreement (including novation and assignment and assumption agreements) that the Guarantor is required to record on its books under GAAP even though the Guarantor is no longer the legal owner of the vessel or legally obligated to take delivery of the vessel.

Total Loss” means in relation to a Collateral Vessel:

(a) actual, constructive, compromised, agreed or arranged total loss of that Collateral Vessel;

(b) requisition for title or other compulsory acquisition of that Collateral Vessel otherwise than by requisition for hire;

(c) capture, seizure, arrest, detention, or confiscation of that Collateral Vessel by any government or by persons acting or purporting to act on behalf of any government or by any other person which deprives the Vessel Owner of that Collateral Vessel or as the case may be the Charterer of the use of that Collateral Vessel for more than sixty (60) days after that occurrence; and

(d) requisition for hire of that Collateral Vessel by any government or by persons acting or purporting to act on behalf of any government which deprives the Vessel Owner or as the case may be the Charterer of the use of that Collateral Vessel for a period of sixty (60) days, other than a Charter of the Collateral Vessel to a government or government agency approved by the Borrower and by the Administrative Agent.

UBO” means (a) any of Kyle Washington, Kevin Washington, Dennis Washington or any of their estate, spouse, and/or descendants; (b) any trust for the benefit of the persons listed in (a); (c) Fairfax Financial Holdings Limited; (d) an Affiliate of any of the persons listed in (a), (b) or (c); or (e) a combination of the foregoing.

UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.

UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.

 

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

Unrelated Parties” has the meaning given in Section 3.35.

Vessel Disposition” has the meaning given to such term in Section 6.06.

Vessel Disposition Date” means the date of any Vessel Disposition in accordance with the requirements set forth in Section 6.06.

Vessel Owner” means any special purpose company that owns a Collateral Vessel and the entire issued share capital of which is acquired or to be acquired by the Borrower.

Vessel Owner Account” means, in respect of any Vessel Owner, any account in the name of the applicable Vessel Owner opened or to be opened with the Account Bank into which Earnings shall be paid, as more particularly described in the relevant Account Charge relating thereto.

Vessel Substitution Date” means the date of any vessel substitution in accordance with the requirements set forth in Section 6.05.

Wholly-Owned” means, as to a Subsidiary of a Person, a Subsidiary of such Person all of the outstanding Equity Interests of which (other than (a) director’s qualifying shares and (b) shares issued to foreign nationals to the extent required by Applicable Law) are owned by such Person and/or by one or more Wholly-Owned Subsidiaries of such Person.

Withholding Agent” means the Borrower and the Administrative Agent.

Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.

SECTION 1.02 Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (e) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

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SECTION 1.03 Accounting Terms; Changes in GAAP.

(a) Accounting Terms. Except as otherwise expressly provided herein, all accounting terms not otherwise defined herein shall be construed in conformity with GAAP as in effect on the Closing Date. Financial statements and other information required to be delivered by the Borrower to the Lenders pursuant to Sections 5.01(a) and 5.01(b) shall be prepared in accordance with GAAP as in effect at the time of such preparation. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of the Borrower and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 on financial liabilities shall be disregarded. Notwithstanding any changes in GAAP after the Closing Date, any lease of the Obligors that would be characterized as an operating lease under GAAP as in effect on the Closing Date (whether such lease is entered into before or after the Closing Date) shall not constitute Indebtedness or a capital lease (and shall continue to be characterized as an operating lease) under this Agreement or any other Loan Document as a result of such changes in GAAP.

(b) Changes in GAAP. If the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Closing Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

SECTION 1.04 Rates. The Administrative Agent does not warrant or accept responsibility for, and shall not have any liability with respect to, the administration, submission or any other matter related to the rates in the definition of “LIBO Rate” or with respect to any comparable or successor rate thereto.

SECTION 1.05 Restricted Lenders.

(a) Notwithstanding any other provision of this Agreement, in relation to each Lender that is incorporated in Germany and any other Lender that notifies “the Administrative Agent that this clause applies to it (each a “Restricted Lender”), Sections 3.22, 5.24(d), 6.13 and any other sanctions provision in this Agreement (together the “Sanctions Provisions”) will not apply for the benefit of that Restricted Lender to the extent that the Sanctions Provisions would result in any violation of or liability under EU Regulation (EC) 2271/96 (in conjunction with (EU) 2018/1100) or section 7 of the German Außenwirtschaftsverordnung (foreign trade rules) or a similar anti-boycott statute in any other jurisdiction.

(b) Solely in the event of, or on the basis of, any breach of any Sanctions Provisions as result solely of Sanctions imposed by any Sanctions Authority (other than the United Nations, the European Union or Germany) and for which such Sanctions Provisions do not apply in this case for the benefit of a Restricted Lender in accordance with Section 1.05(a) (a “Sanctions Breach”), the parties hereto agree that such Restricted Lender will not be entitled to:

 

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(i) declare that its Commitment is cancelled or require a mandatory prepayment of its part of the Loans in accordance with Section 2.06(b) (Illegality) of this Agreement; or

(ii) assert any other rights under the Loan Documents on the sole basis of such Sanctions Breach.

(c) With respect to any proposal to enforce, or to instruct the Administrative Agent to enforce, a Sanctions Breach, a Restricted Lender may abstain or vote against any proposal to take action in relation to a Sanctions Breach, but will not vote in favour of any such proposal.

(d) Nothing in this Section 1.05 will affect the rights of a Restricted Lender under any other provision of the Loan Documents or its right to benefit as a Lender from any action taken by the Administrative Agent or the other Lenders in relation to the Loan Documents (whether in relation to any of the Sanctions Provisions or otherwise).

ARTICLE II

COMMITMENTS

SECTION 2.01 Term Loan Commitments.

(a) Term Loan. Each Term Lender severally, and not jointly with the other Term Lenders, agrees, upon the terms and subject to the conditions herein set forth, to make term loans denominated in US Dollars (the “Term Loan”) available to Borrower during the Term Loan Availability Period in an aggregate principal amount up to but not exceeding such Term Lender’s Term Loan Commitment. The amount of each Borrowing under the Term Loan shall be less than or equal to the Advance Rate therefor. Amounts repaid or prepaid with respect to the Term Loan may not be re-borrowed. Unless previously terminated, the Term Loan Commitment of each Term Lender shall automatically terminate at 5:00 p.m. (New York City time) on the Term Loan Availability Termination Date.

(b) Procedure for Term Loan Borrowing. Borrower may make up to 6 Borrowings under the Term Loan during the Term Loan Availability Period, provided that Borrower shall give the Administrative Agent a revocable Borrowing Request (which must be received by the Administrative Agent prior to 12:00 Noon, New York City time three Business Days prior to the requested Borrowing Date), specifying (i) the amount to be borrowed, (ii) the applicable Collateral Vessel(s) and (iii) the requested Borrowing Date. Each borrowing of the Term Loan shall be in an amount equal to at least US$10,000,000. Upon receipt of any such Borrowing Request from Borrower, the Administrative Agent shall promptly notify each Lender thereof. Each Term Lender will make the amount of its pro rata share of the Term Loan advance available to the Administrative Agent for the account of the Borrower prior to 12:00 Noon, New York time, on the Borrowing Date requested by Borrower in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the Borrower by the Administrative Agent crediting the Collection Account or, at the Borrower’s option, by effecting a wire transfer of such amounts to an account designated by the Borrower to the Administrative Agent. If the Borrower revokes any Borrowing Request, the Borrower shall compensate the Lenders in connection with such revocation in accordance with Section 2.13.

(c) Prefunding Arrangements.

 

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(i) The Borrower shall be permitted to request in any Borrowing Request that the relevant Borrowing be credited to an escrow account (the “Escrow Account”) held by Citibank, N.A. as escrow agent (the “Escrow Agent”) under an escrow agreement in form and substance satisfactory to the Administrative Agent and the Lenders (the “Escrow Agreement”). In such circumstances, the requirement to satisfy the conditions set out in Section 4.02 shall be deferred and such conditions (together with any conditions to the release of the Borrowing from the Escrow Account under the Escrow Agreement) shall instead be required to be satisfied prior to, or simultaneously with, the release of the relevant Borrowing from the Escrow Account. Prior to the release of the relevant Borrowing from the Escrow Account, the Borrower shall have no right or interest in respect of such funds.

(ii) If the relevant Borrowing (or part thereof) is returned to the Administrative Agent pursuant to the terms of the Escrow Agreement, such funds shall be returned by the Administrative Agent to the Lenders and the relevant Borrowing shall (to the extent of the funds so returned to the Lenders) be deemed not to have occurred, provided that the Borrower shall be required to pay interest on the relevant funds on and from the date of payment to the Escrow Account up to but excluding the date on which the funds are returned. Such interest shall be payable on the date the relevant funds are returned and shall be calculated at the rate that would otherwise have applied if such amount constituted a Borrowing for such period.

(iii) If the Administrative Agent is satisfied that the conditions set out in Section 4.02 in relation to any Borrowing which has been credited to an Escrow Account have been satisfied or will upon release of such Borrowing from the Escrow Account be satisfied, the Administrative Agent shall execute a release instruction in respect thereof and the Borrowing Date in relation to the funds so released shall be deemed for all purposes under this Agreement, save for the purposes of the calculation of interest which shall accrue from the date the relevant funds are paid to the Escrow Account, to be the date of such release.

(iv) The Borrower shall indemnify, on written demand, the Finance Parties for (A) in the case of any funds returned to the Administrative Agent pursuant to any Escrow Agreement, amounts set out in Section 2.13 as if such return constituted a prepayment and (B) any other costs, losses and expenses, as the case may be, incurred by the Finance Parties in connection with the arrangements set forth in this Section 2.01(c). For the avoidance of any doubt, the Finance Parties shall not be liable for any costs, expenses or other amounts payable to the Escrow Agent under or pursuant to the Escrow Agreement.

SECTION 2.02 [Reserved].

SECTION 2.03 Repayment Schedules.

(a) Promptly following the issuance of the first Borrowing Request in respect of the Term Loan, the Administrative Agent will, in consultation with the Borrower and the Term Lenders, prepare a repayment schedule in respect of the Term Loan, and promptly following the issuance of each subsequent Borrowing Request in respect of the Term Loan, the Administrative Agent will, in consultation with the Borrower and the Term Lenders, revise the repayment schedule in respect of the Term Loan to take into account the additional advance being made under such Borrowing Request (the “Repayment Schedule”). The Repayment Schedule will be prepared on the basis that:

(i) the Borrower will repay the Term Loan in instalments on each Payment Date (the “Term Loan Required Payments”);

 

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(ii) the Term Loan will amortize, commencing on the first Borrowing Date in respect of the Term Loan until the Maturity Date, at a rate of 8% per annum, which rate shall be calculated on the basis of the aggregate amount of the Term Loan which has been advanced (excluding any amortization payments which have previously been made) as at the applicable Payment Date, and such annual repayments shall be split pro rata over each of the applicable Payment Dates.

(b) The Administrative Agent and the Borrower will agree such Repayment Schedule prior to the relevant Borrowing Date.

(c) [Reserved].

(d) If any optional partial prepayment of the Term Loan is made pursuant to Section 2.05(a), or any amount of the Term Loan is prepaid as a result of a Cash Sweep Event, such amounts shall reduce the Term Loan Required Payments pro rata (or, if the Borrower makes an election in accordance with Section 2.05(b)(ii), the next in time amortization payment(s) only) and the Administrative Agent will, in consultation with the Borrower and the Term Lenders, revise the repayment schedule to take into account the relevant partial prepayment and its required manner of application pursuant hereto. The Administrative Agent and the Borrower will agree such Repayment Schedule. The revised repayment schedule shall thereafter be the “Repayment Schedule” for the purposes of this Agreement.

SECTION 2.04 Repayment of the Loans

(a) Term Loan. The Borrower shall repay the Term Loan as follows:

(i) on each Payment Date, the Term Loan Required Payments in accordance with the Repayment Schedule; and

(ii) on the Maturity Date, the outstanding principal balance of the Term Loan.

(b) [Reserved].

SECTION 2.05 Optional Prepayments

(a) Optional Prepayments. The Borrower may, upon notice to the Administrative Agent, at any time and from time to time prepay any Borrowing in whole or in part without premium or penalty; provided that (i) such notice shall be in the form of a written Prepayment Notice, appropriately completed and signed by a Responsible Officer of the Borrower, or may be given by telephone to the Administrative Agent (if promptly confirmed by such a written Prepayment Notice consistent with such telephonic notice) and must be received by the Administrative Agent not later than 11:00 a.m. (New York City time) three Business Days before the date of prepayment; (ii) such Prepayment Notice shall specify (A) whether such prepayment shall be applied to prepay the Term Loans of the Term Lenders and/or prepay outstanding principal under any other Program Debt Documents, (B) the prepayment date and (C) the principal amount of each Borrowing or portion thereof to be prepaid; and (iii) each such partial prepayment shall be in an amount not less than $1,000,000 or a larger multiple of $1,000,000. Promptly following receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise the applicable Lenders of the contents thereof. Each Prepayment Notice shall be irrevocable.

(b) Application. Each optional prepayment of a Borrowing shall be applied (i) to reduce all Term Loan Required Payments pro rata or (ii) if the Borrower so directs in relation to any optional partial prepayment of the Term Loan pursuant to Section 2.05(a), against the next in time amortization payment(s) only. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.08, together with any additional amounts required pursuant to Section 2.13.

 

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(c) [Reserved].

SECTION 2.06 Mandatory Prepayments.

(a) [Reserved].

(b) Illegality. If it is or will be unlawful in any jurisdiction for a Lender to perform any of its obligations under any Loan Documents, or to fund or maintain its share in the Loans, or any Obligor is or becomes a Sanctioned Person, and the Lender (or in the case of any Obligor being or becoming a Sanctioned Person, any Lender) has notified the Administrative Agent and the Borrower of the same: (i) the Borrower shall repay or prepay that Lender’s participation in the Loans in full; and (ii) the Commitments of that Lender will be immediately cancelled. The date for repayment or prepayment referred to in (i) above will be, (x) in the case where it is already unlawful for such Lender to perform such obligations or to fund or maintain its share in the Loans, or an Obligor has become a Sanctioned Person, as soon as practicable and (y) in the case of unlawfulness that will occur in the future, the date specified by that Lender in the relevant notification, which shall not be earlier than ten (10) Business Days preceding the last day of any applicable grace period allowed by law and which shall be a date falling at least thirty (30) days from the date of the notice (but in any event no later than the last day of any applicable grace period allowed by law).

(c) Change of Control. Upon the occurrence of a Change of Control, the Borrower shall (i) prepay the Loans in full, together with accrued interest thereon to the date of such prepayment, and (ii) terminate all of the unused Commitments, if any. Any prepayment of the Loans under this Section 2.06(c) shall be made on the date of occurrence of such Change of Control.

(d) Failure of Security. If any of the Security Documents do not, or shall have ceased to, constitute an enforceable Security Interest over the monies, interests and assets expressed to be assigned, mortgaged, charged, pledged or over which Security Interests are otherwise created or expressed to be created thereby (a “Collateral Defect”), and (if the same is capable of remedy) the same has not been remedied to the satisfaction of the Administrative Agent within 15 Business Days (provided that during such period the Borrower is diligently taking action to remedy such Collateral Defect), the Administrative Agent may by written notice to the Borrower declare that the Loans shall become immediately due and payable in whole or in part by the Borrower, provided that if the Collateral Defect relates to some but not all of the Collateral Vessels, the Borrower may prepay a portion of the Loans pursuant to Section 2.05(a) in such amount as is required such that, following such payment, no BB Event and no DSCR Cash Sweep would be continuing (for these purposes, not taking into account the Collateral Vessel(s) the subject of the Collateral Defect).

(e) Unlawfulness. If it is or becomes unlawful for an Obligor to perform any of its material obligations under the Loan Documents or any Related Contract other than as a result of any action or inaction of an Obligor (an “Unlawfulness Event”), and (if the same is capable of remedy) the same has not been remedied to the satisfaction of the Administrative Agent within 15 Business Days (provided that during such period the Borrower is diligently taking action to remedy such Unlawfulness Event), the Administrative Agent may by written notice to the Borrower declare that the Loans shall become immediately due and payable in whole or in part by the Borrower, provided that if the Unlawfulness Event relates to some but not all of the Collateral Vessels, the Borrower may prepay a portion of the Loans pursuant to Section 2.05(a) in such amount as is required such that, following such payment, no BB Event and no DSCR Cash Sweep would be continuing (for these purposes, not taking into account the Collateral Vessel(s) the subject of the Unlawfulness Event).

 

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(f) Application of Mandatory Prepayments. Any repayment or Prepayment under Section 2.06(c) to (e) (inclusive) shall be applied, pro rata and pari passu, to repay the outstanding principal of the Term Loan and the outstanding principal under any other Program Debt Document (provided that if any relevant Secured Party thereunder elects not to receive such amounts, such amounts shall be applied to repay the outstanding principal of the Term Loan under this Agreement pro rata to the remaining installments).

SECTION 2.07 [Reserved].

SECTION 2.08 Interest.

(a) Interest Rates. Subject to paragraphs (b) and (e) of this Section, each Loan shall bear interest at a rate per annum equal to the LIBO Rate for the Interest Period therefor plus the Margin.

(b) Default Interest. If any amount payable by any Obligor under this Agreement or any other Loan Document (including principal of any Loan, interest, fees and other amount) is not paid when due, whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a rate per annum equal to the applicable Default Rate. Upon the request of the Required Lenders, while any Event of Default exists, the Borrower shall pay interest on the principal amount of all Loans outstanding hereunder at a rate per annum equal to the applicable Default Rate.

(c) Payment Dates. Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein; provided that (i) interest accrued pursuant to paragraph (b) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any LIBO Rate Borrowing prior to the end of the Interest Period therefor, accrued interest on such Borrowing shall be payable on the effective date of such conversion.

(d) Interest Computation. All interest hereunder shall be computed on the basis of a year of 360 days, and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

(e) Market Disruption. If in respect of any Interest Period (i) at or about 12:00 noon, London time, two Business Days prior to the commencement of such Interest Period the Screen Rate is not available, and there is no Reference Bank Rate, or (ii) before close of business in London on the Business Day prior to the commencement of such Interest Period, the Administrative Agent receives notifications from a Lender or Lenders (whose participations in the Loans exceed 35%) of the aggregate outstanding amount of all the Advances under the applicable Senior Secured Facility) that the cost to it or them of obtaining matching deposits in the interbank market would be in excess of LIBOR, then (in each case) the rate of interest on the relevant Lender’s share of that Loan for the Interest Period shall be the rate per annum which is the sum of: (x) the rate notified to the Administrative Agent by the relevant Lender(s) as soon as practicable and in any event by close of business on the first day of such Interest Period, to be that which expresses as a percentage rate per annum the cost to the relevant Lender(s) of funding its or their participation in the Loans; and (y) the Margin.

(f) Modification and/or discontinuation of certain benchmarks. Without prejudice to any other provisions of this Agreement (including in particular this Section 2.08 and Section 9.02(b) (Amendments, Etc.), each Party acknowledges and agrees for the benefit of each other Party that:

 

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(i) IBOR benchmarks (i) may be subject to methodological or other changes which could affect their value, or (ii) may not comply with applicable laws and regulations (including Regulation (EU) 2016/1011 of the European Parliament and of the Council, as amended (EU Benchmarks Regulation)) and/or (iii) may be permanently discontinued; and

(ii) the occurrence of any of the aforementioned events set out in (f)(i) above and/or events set out in Section 2.16 (Inability to Determine Rates) may have adverse consequences which may materially impact the economics of the financing transaction contemplated under this Agreement.

SECTION 2.09 Fees.

(a) Fee Letters. Fees (other than the Commitment Fee) shall be paid by the Borrower in the amount, in the manner and at the times agreed in the Fee Letters.

(b) Term Loan Commitment Fee. The Borrower agrees to pay to the Administrative Agent for the account of each Term Lender a commitment fee on the daily average unused amount of the Term Loan Commitment of such Term Lender, for each day during the period from the Closing Date until the Term Loan Availability Termination Date, at a rate equal to 0.25% per annum (or, during any period where less than 50% of the aggregate Term Loan Commitments have been utilized, 0.50% per annum), accrued commitment fees to be payable on each Borrowing Date in respect of the Term Loan and upon any termination or expiry of the applicable Term Loan Commitments.

(c) [Reserved].

(d) [Reserved].

(e) [Reserved].

(f) Fee Computation. All fees payable under this Section shall be computed on the basis of a year of 360 days and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). Each determination by the Administrative Agent of a fee hereunder shall be conclusive absent manifest error.

SECTION 2.10 Evidence of Debt. Each Lender shall maintain in accordance with its usual practice records evidencing the indebtedness of the Borrower to such Lender resulting from each Credit Extension made by such Lender. The Administrative Agent shall maintain the Register in accordance with Section 9.04(c). The entries made in the records maintained pursuant to this paragraph (a) shall be prima facie evidence absent manifest error of the existence and amounts of the obligations recorded therein. Any failure of any Lender or the Administrative Agent to maintain such records or make any entry therein or any error therein shall not in any manner affect the obligations of the Borrower under this Agreement and the other Loan Documents. In the event of any conflict between the records maintained by any Lender and the records maintained by the Administrative Agent in such matters, the records of the Administrative Agent shall control in the absence of manifest error.

SECTION 2.11 Payments Generally; Several Obligations of Lenders.

(a) Payments by Borrower. All payments to be made by the Borrower hereunder and the other Loan Documents shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all such payments shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in immediately available funds not later than 2:00pm (New York City time) on the date specified herein. All amounts received by the Administrative Agent after such time on any date shall be deemed to have been received on the next succeeding Business Day and any applicable interest or fees shall continue to accrue. The Administrative Agent will apply such amounts in accordance with the Intercreditor Agreement.

 

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(b) Application of Insufficient Payments. Subject to Section 4.02 of the Intercreditor Agreement, if at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest, fees and other amounts then due hereunder, such funds shall be applied (i) first, to pay interest, fees and other amounts then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest, fees and other amounts then due to such parties, and (ii) second, to pay principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.

(c) Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

(d) Several Obligations of Lenders. The obligations of the Lenders hereunder to make Loans and to make payments pursuant to Section 9.03(c) are several and not joint. The failure of any Lender to make any Loan or to fund any such participation or to make any such payment on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participations or to make its payment under Section 9.03(c).

SECTION 2.12 Sharing of Payments. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Lender receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other such obligations greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them; provided that:

(i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

(ii) the provisions of this paragraph shall not be construed to apply to (x) any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (y) [reserved], or (z) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this paragraph shall apply).

 

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The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under Applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

SECTION 2.13 Compensation for Losses. In the event of (a) the payment of any principal other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) [reserved], (c) the failure for any reason to borrow, convert, continue or prepay any amount of any Loan on the date specified in any notice delivered pursuant hereto, or (d) the assignment of any Loan or part of a Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.18(b), then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. Such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest (as reasonably determined by such Lender) that would have accrued on the principal amount of such Loan had such event not occurred, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest that would accrue on such principal amount for such period at the interest rate that such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the London interbank eurodollar market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

SECTION 2.14 Increased Costs.

(a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender;

(ii) impose on any Lender or the London interbank market any other condition, cost or expense (other than Indemnified Taxes, Other Taxes and Excluded Taxes) affecting this Agreement or Loans made by such Lender;

and the result of any of the foregoing shall be to increase the cost to such Lender of making, converting to, continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Lender or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or any other amount) then, upon request of such Lender, the Borrower will pay to such Lender, such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

(b) Capital Requirements. If any Lender determines that any Change in Law affecting such Lender or any lending office of such Lender or such Lender’s holding company, if any, regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

 

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(c) Certificates for Reimbursement. A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section and delivered to the Borrower, shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

(d) Delay in Requests. Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions, and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

SECTION 2.15 Taxes.

(a) Defined Terms. For purposes of this Section, the term “Applicable Law” includes FATCA.

(b) Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrower under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by Applicable Law. If any Applicable Law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with Applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(c) Payment of Other Taxes by Borrower. The Borrower shall timely pay to the relevant Governmental Authority in accordance with Applicable Law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.

(d) Indemnification by Borrower. The Borrower shall indemnify each Recipient, within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

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(e) Evidence of Payments. As soon as practicable after any payment of Taxes by the Borrower to a Governmental Authority pursuant to this Section, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(f) Status of Lenders. Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall to the extent legally able to do so, use reasonable efforts to deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. Notwithstanding anything to the contrary in the preceding sentence, (i) nothing herein shall obligate any Lender to disclose any confidential information in connection therewith and (ii) the completion, execution and submission of such documentation shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

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

SECTION 2.16 Benchmark Replacement Setting.

(a) Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Loan Document (and any Hedging Agreement shall be deemed not to be a “Loan Document” for purposes of this Section titled “Benchmark Replacement Setting”), if a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (1) or (2) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (3) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders.

If (i) a Benchmark Replacement Date has occurred and the applicable Benchmark Replacement on such Benchmark Replacement Date is a Benchmark Replacement other than the sum of: (a) Term SOFR and (b) the related Benchmark Replacement Adjustment, (ii) subsequently, the Relevant Governmental Body recommends for use a forward-looking term rate based on SOFR and the Borrower requests that the Administrative Agent review the administrative feasibility of such recommended forward-looking term rate for purposes of this Agreement and (iii) following such request from the Borrower, the Administrative Agent determines (in its sole discretion) that such forward looking term rate is administratively feasible for the Administrative Agent, then the Administrative Agent may (in its sole discretion) provide the Borrower and Lenders with written notice that from and after a date identified in

 

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such notice: (i) a Benchmark Replacement Date shall be deemed to have occurred, the Benchmark Replacement on such Benchmark Replacement Date shall be deemed to be a Benchmark Replacement determined in accordance with clause (1) of the definition of “Benchmark Replacement” under this Section titled “Benchmark Replacement Setting”; provided, however, that if upon such Benchmark Replacement Date the Benchmark Replacement Adjustment is unable to be determined in accordance with clause (1) of the definition of “Benchmark Replacement” and the corresponding definition of “Benchmark Replacement Adjustment”, then the Benchmark Replacement Adjustment in effect immediately prior to such new Benchmark Replacement Date shall be utilized for purposes of this Benchmark Replacement (for avoidance of doubt, for purposes of this proviso, such Benchmark Replacement Adjustment shall be the Benchmark Replacement Adjustment which was established in accordance with the definition of “Benchmark Replacement Adjustment” on the date determined in accordance with clauses (1) or (2), as applicable, of the definition of “Benchmark Replacement Date” hereunder) and (ii) such forward looking term rate shall be deemed to be the forward looking term rate referenced in the definition of “Term SOFR” for all purposes hereunder or under any Loan Document in respect of any Benchmark setting and any subsequent Benchmark settings, without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document. For the avoidance of doubt, if the circumstances described in the immediately preceding sentence shall occur, all applicable provisions set forth in this Section titled “Benchmark Replacement Setting” shall apply with respect to such election of the Administrative Agent as completely as if such forward-looking term rate was initially determined in accordance with clause (1) of the definition of “Benchmark Replacement”, including, without limitation, the provisions set forth in clauses (b) and (f) of this Section titled “Benchmark Replacement Setting.”.

(b) Benchmark Replacement Conforming Changes. In connection with the implementation of a Benchmark Replacement, the Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.

(c) Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Borrower and the Lenders of (i) any Benchmark Replacement Date and the related Benchmark Replacement, (ii) the effectiveness of any Benchmark Replacement Conforming Changes, and (iii) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (d) below. For the avoidance of doubt, any notice required to be delivered by the Administrative Agent as set forth in this Section titled “Benchmark Replacement Setting” may be provided, at the option of the Administrative Agent (in its sole discretion), in one or more notices and may be delivered together with, or as part of any amendment which implements any Benchmark Replacement or Benchmark Conforming Changes. Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section titled “Benchmark Replacement Setting,” including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section titled “Benchmark Replacement Setting.”.

(d) Unavailability of Tenor of Benchmark. Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including Term SOFR or USD LIBOR) and either (A) any tenor for such Benchmark is not displayed on a screen or other information

 

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service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is or will be no longer representative, then the Administrative Agent may modify the definition of “Interest Period” for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition of “Interest Period” for all Benchmark settings at or after such time to reinstate such previously removed tenor.

(e) Disclaimer. The Administrative Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to (i) the administration, submission or any other matter related to the London interbank offered rate or with respect to any alternative or successor rate thereto, or replacement rate thereof (including, without limitation any Benchmark Replacement implemented hereunder), (ii) the composition or characteristics of any such Benchmark Replacement, including whether it is similar to, or produces the same value or economic equivalence to USD LIBOR (or any other Benchmark) or have the same volume or liquidity as did USD LIBOR (or any other Benchmark), (iii) any actions or use of its discretion or other decisions or determinations made with respect to any matters covered by this Section titled “Benchmark Replacement Setting” including, without limitation, whether or not a Benchmark Transition Event has occurred, the removal or lack thereof of unavailable or non-representative tenors, the implementation or lack thereof of any Benchmark Replacement Conforming Changes, the delivery or non-delivery of any notices required by clause (c) above or otherwise in accordance herewith, and (iv) the effect of any of the foregoing provisions of this Section titled “Benchmark Replacement Setting.”.

(f) Certain Defined Terms.

As used in this Section titled “Benchmark Replacement Setting”:

Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, any tenor for such Benchmark or payment period for interest calculated with reference to such Benchmark, as applicable, that is or may be used for determining the length of an Interest Period pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to clause (d) of this Section titled “Benchmark Replacement Setting.”.

Benchmark” means, initially, USD LIBOR; provided that if a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred with respect to USD LIBOR or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause (a) of this Section titled “Benchmark Replacement Setting.”.

Benchmark Replacement” means, for any Available Tenor, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date:

 

  (1)

the sum of: (a) Term SOFR and (b) the related Benchmark Replacement Adjustment;

 

  (2)

the sum of: (a) Daily Simple SOFR and (b) the related Benchmark Replacement Adjustment;

 

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  (3)

the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for U.S. dollar-denominated syndicated credit facilities at such time and (b) the related Benchmark Replacement Adjustment; provided that, in the case of clause (1), such Unadjusted Benchmark Replacement is displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion.

If the Benchmark Replacement as determined pursuant to clause (1), (2) or (3) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.

Benchmark Replacement Adjustment” means, with respect to any replacement of the then current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement:

 

  (1)

for purposes of clauses (1) and (2) of the definition of “Benchmark Replacement,” the first alternative set forth in the order below that can be determined by the Administrative Agent: (a) the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Interest Period that has been selected or recommended by the Relevant Governmental Body for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for the applicable Corresponding Tenor; (b) the spread adjustment (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Interest Period that would apply to the fallback rate for a derivative transaction referencing the ISDA Definitions to be effective upon an index cessation event with respect to such Benchmark for the applicable Corresponding Tenor; and

 

  (2)

for purposes of clause (3) of the definition of “Benchmark Replacement,” the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date or (ii) any evolving or then prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar denominated syndicated credit facilities; provided that, in the case of clause (1) above, such adjustment is displayed on a screen or other information service that publishes such Benchmark Replacement Adjustment from time to time as selected by the Administrative Agent in its reasonable discretion.

Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, the formula for calculating

 

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any successor rates identified pursuant to the definition of “Benchmark Replacement”, the formula, methodology or convention for applying the successor Floor to the successor Benchmark Replacement and other technical, administrative or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

Benchmark Replacement Date” means the earliest to occur of the following events with respect to the then current Benchmark:

 

  (1)

in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof);

 

  (2)

in the case of clause (3) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein; or

 

  (3)

in the case of an Early Opt-in Election, the sixth (6th) Business Day after the date notice of such Early Opt-in Election is provided to the Lenders, so long as the Administrative Agent has not received, by 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Early Opt-in Election is provided to the Lenders, written notice of objection to such Early Opt-in Election from Lenders comprising the Required Lenders.

For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark:

 

  (1)

a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);

 

  (2)

a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such

 

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  Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or

 

  (3)

a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer representative.

For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).

Corresponding Tenor” with respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.

Daily Simple SOFR” means, for any day, SOFR, with the conventions for this rate (which will include a lookback) being established by the Administrative Agent in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for syndicated business loans; provided, that if the Administrative Agent decides that any such convention is not administratively feasible for the Administrative Agent, then the Administrative Agent may establish another convention in its reasonable discretion.

Early Opt-in Election” means, if the then-current Benchmark is USD LIBOR, the occurrence of the following:

 

  (1)

a notification by the Administrative Agent to (or the request by the Borrower to the Administrative Agent to notify) each of the other parties hereto that at least five currently outstanding U.S. dollar denominated syndicated credit facilities in the U.S. syndicated loan market at such time contain (as a result of amendment or as originally executed) a SOFR-based rate (including SOFR, a term SOFR or any other rate based upon SOFR) as a benchmark rate (and such syndicated credit facilities are identified in such notice and are publicly available for review), and

 

  (2)

the joint election by the Administrative Agent and the Borrower to trigger a fallback from USD LIBOR and the provision by the Administrative Agent of written notice of such election to the Lenders.

Floor” means the benchmark rate floor of zero.

ISDA Definitions” means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time by the International Swaps and Derivatives Association, Inc. or such successor thereto.

 

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Reference Time” with respect to any setting of the then-current Benchmark means (1) if such Benchmark is USD LIBOR, 11:00 a.m. (London time) on the day that is two London banking days preceding the date of such setting, and (2) if such Benchmark is not USD LIBOR, the time determined by the Administrative Agent in its reasonable discretion.

Relevant Governmental Body” means the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto.

SOFR” means, with respect to any Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day published by the SOFR Administrator on the SOFR Administrator’s Website on the immediately succeeding Business Day.

SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).

SOFR Administrator’s Website” means the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.

Term SOFR” means, for the applicable Corresponding Tenor as of the applicable Reference Time, the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.

Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.

USD LIBOR” means the London interbank offered rate for U.S. dollars.

SECTION 2.17 [Reserved].

SECTION 2.18 Mitigation Obligations; Replacement of Lenders.

(a) Designation of a Different Lending Office. If any Lender (x) requests Borrower to repay its Loans in full pursuant to Section 2.06(b), (y) requests compensation under Section 2.14, or (z) requires the Borrower to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.15, then such Lender shall (at the request of the Borrower) use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate the illegality contemplated by Section 2.06(b) or eliminate or reduce amounts payable pursuant to Section 2.14 or 2.15, as the case may be, in the future, and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b) Replacement and Termination of Lenders. If (x) any Lender requests (A) Borrower to repay its Loans in full pursuant to Section 2.06(b) or (B) compensation under Section 2.14, or (y) the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any

 

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Governmental Authority for the account of any Lender pursuant to Section 2.15 and, in each case, such Lender has declined or is unable to designate a different lending office in accordance with paragraph (a) of this Section, or if any Lender is a Defaulting Lender or a Non-Consenting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, (I) require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 9.04), all of its interests, rights (other than its existing rights to payments pursuant to Section 2.14 or Section 2.15) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment) or (II) prepay such Lender’s Loans in full and permanently reduce the Commitments by the amount of such payment; provided that:

(i) the Borrower shall have paid to the Administrative Agent the assignment fee (if any) specified in Section 9.04;

(ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 2.13) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

(iii) in the case of any such assignment resulting from a claim for compensation under Section 2.14 or payments required to be made pursuant to Section 2.15, such assignment will result in a reduction in such compensation or payments thereafter;

(iv) such assignment does not conflict with Applicable Law and such Lender shall have satisfied any know your customer requirements of such Lender in connection with such assignment as required by Applicable Law; and

(v) in the case of any assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

Notwithstanding anything in this Section to the contrary, in the event that a Lender acts as the Administrative Agent, such Lender may not be replaced hereunder except in accordance with the terms of Section 8.06.

SECTION 2.19 [Reserved].

SECTION 2.20 Defaulting Lenders.

(a) Defaulting Lender Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by Applicable Law:

(i) Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders and Section 9.02(b).

 

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(ii) Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VII or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 9.08 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, [reserved]; third, [reserved]; fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, [reserved]; sixth, to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, such Defaulting Lender until such time as all Loans are held by the Lenders pro rata in accordance with the Commitments without giving effect to clause (iv) below. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender pursuant to this Section shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

(iii) Commitment Fees. No Defaulting Lender shall be entitled to receive any Commitment Fee for any period during which that Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

(b) Defaulting Lender Cure. If the Borrower and the Administrative Agent agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans to be held pro rata by the Lenders in accordance with the Commitments (without giving effect to paragraph (a)(iv) above), whereupon, such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

 

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SECTION 2.21 Increases in Commitments.

(a) Request for Increase. The Borrower may, by notice to the Administrative Agent (who shall promptly notify the Lenders), request an increase in the Term Loan Commitments (each such increase, an “Incremental Commitment”); provided that any such request for an increase shall (i) be in a minimum amount of $20,000,000 (or such lesser amount as may be approved by the Administrative Agent) and (ii) not result in the aggregate amount of the Loan Secured Obligations and the Additional Secured Obligations referred to in the Intercreditor Agreement to exceed the maximum amount permitted thereunder.

(b) Incremental Lenders. An Incremental Commitment may be provided by any existing Lender or other Person that is an Eligible Assignee and is not a Person of the type described in Section 9.04(b)(iv) (each such existing Lender or other Person that agrees to provide an Incremental Commitment, an “Incremental Lender”). Notwithstanding anything herein to the contrary, no Lender shall have any obligation to agree to increase its Commitment, or to provide a Commitment, pursuant to this Section and any election to do so shall be in the sole discretion of such Lender.

(c) Terms of Incremental Commitments. The Administrative Agent and the Borrower shall determine the effective date for such increase pursuant to this Section (an Incremental Commitment Effective Date) and, if applicable, the final allocation of such increase among the Persons providing such increase; provided that such date shall be a Business Day at least 10 Business Days after delivery of the request for such increase (unless otherwise approved by the Administrative Agent) and at least 30 days prior to the Maturity Date.

In order to effect such increase, the Borrower, the applicable Incremental Lender(s) and the Administrative Agent (but no other Lenders or Persons) shall enter into one or more Joinder Agreements, each in form and substance satisfactory to the Borrower and the Administrative Agent, pursuant to which the applicable Incremental Lender(s) will provide the Incremental Commitment(s).

Effective as of the applicable Incremental Commitment Effective Date, subject to the terms and conditions set forth in this Section, each Incremental Commitment shall be a Term Loan Commitment (and not a separate facility hereunder), each Incremental Lender providing such Incremental Commitment shall be, and have all the rights of, a Term Lender for all purposes of this Agreement.

(d) Conditions to Effectiveness. Notwithstanding the foregoing, the increase in the Commitments pursuant to this Section shall not be effective with respect to any Incremental Lender unless:

(i) no Default or Event of Default shall have occurred and be continuing on the Incremental Commitment Effective Date and after giving effect to such increase;

(ii) the representations and warranties contained in this Agreement are true and correct on and as of the Incremental Commitment Effective Date and after giving effect to such increase, as though made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date);

(iii) the Administrative Agent shall have received one or more Joinder Agreements contemplated above, providing for Incremental Commitments in the amount of such increase, and satisfied all know your customer requirements (including any know your customer requirements of the Security Trustee) in respect of such Incremental Lender; and

(iv) the Administrative Agent shall have received such legal opinions and other documents reasonably requested by the Administrative Agent in connection therewith.

As of such Incremental Commitment Effective Date, upon the Administrative Agent’s receipt of the documents required by this paragraph (d), the Administrative Agent shall record the information contained in the applicable Joinder Agreement(s) in the Register and give prompt notice of the increase in the Commitments to the Borrower and the Lenders (including each Incremental Lender).

 

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ARTICLE III

REPRESENTATIONS AND WARRANTIES

To induce the other parties (excluding any other Obligors) to enter into this Agreement, the Borrower represents and warrants with respect to itself and each other Obligor to each other party hereto (excluding any other Obligors) that as of the Restatement Date, (other than in respect of the representation and warranty set forth is Section 3.13) each Borrowing Date and, in respect of the representations and warranties set forth in Sections 3.01, 3.02, 3.03, 3.04, 3.06, 3.07, 3.08, 3.09, 3.11, 3.12, 3.16, 3.17, 3.21, 3.22, 3.27, 3.29, 3.30. 3.32, 3.33, 3.34 and 3.35, on each Payment Date:

SECTION 3.01 Status. (a) Each Obligor is a corporation, duly incorporated and validly existing under the laws of the Republic of the Marshall Islands, or in relation to any applicable Vessel Owner, Singapore (or such other jurisdiction as may be acceptable to the Administrative Agent), and (b) each Obligor has the power to own its assets and carry on its business as it is being conducted.

SECTION 3.02 Powers and authority. Each Obligor has the power to enter into and perform, and has taken all necessary action to authorize the entry into and performance of, the Loan Documents to which it is or will be a party and the transactions contemplated by those Loan Documents.

SECTION 3.03 Legal validity. The obligations expressed to be assumed by each Obligor in each Loan Document to which it is a party are legal, valid, binding and enforceable obligations, except as such enforceability may be limited by any applicable bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally and to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 3.04 Non-conflict. The entry into and performance by each Obligor of, and the transactions contemplated by, the Loan Documents to which it is a party do not conflict in any material respect with: (a) any law or regulation applicable to it; (b) its constitutional documents; or (c) any document which is binding upon it or any of its assets that, in the case of this clause (c), would reasonably be expected to cause a Material Adverse Effect.

SECTION 3.05 No default. (a) No Default is continuing or will result from the execution of, or the performance of any transaction contemplated by, any Loan Document. (b) No other event is outstanding which constitutes a default under any document which is binding on any Obligor or any of its assets to an extent or in a manner which is reasonably likely to have a Material Adverse Effect.

SECTION 3.06 Authorizations. All authorizations required by each Obligor in connection with the entry into, performance, validity and enforceability of, and the transactions contemplated by, the Loan Documents have been obtained or effected (as appropriate) and are in full force and effect, or, in the case of the registration of any Mortgage in respect of a Collateral Vessel that is the subject of a Loan on a Borrowing Date, shall be promptly obtained or effected following such Borrowing Date and within the period prescribed by the Applicable Law.

SECTION 3.07 Financial statements . The audited consolidated financial statements of the Guarantor most recently delivered to the Administrative Agent (or, until delivery of the first audited financial statements, the Original Financial Statements) together with any other financial information of the Guarantor supplied to the Administrative Agent by the Borrower or the Guarantor: (a) have been prepared in accordance with GAAP, consistently applied; (b) have been audited in accordance with GAAP; and (c) fairly represent its financial condition (consolidated, if applicable) as at the date to which they were drawn up, except, in each case, as disclosed to the contrary in those financial statements or other information.

 

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SECTION 3.08 No misleading information. (a) Any factual information provided in writing (“Written Factual Information”) by or on behalf of any Obligor in connection with the Loan Documents or any Collateral Vessel (other than forward looking information and information of a general economic or industry specific nature) was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated; (b) any financial projections contained in the Written Factual Information were prepared on the basis of recent historical information and on the basis of reasonable assumptions believed by such Obligor to be reasonable at the time made and reflect such Obligor’s judgment based on present circumstances of the most likely set of conditions and course of action for the projected period (it being recognized by the Administrative Agent that such projections are not to be viewed as facts and are subject to significant uncertainties and contingencies many of which are beyond the Obligors’ control, that no assurance can be made that any particular projection will be realized, that actual results may differ from projected results and that such differences may be material); and (c) to the best of the knowledge and belief of the Obligors, nothing has occurred and no information has been given or withheld that results in the information contained in the Written Factual Information, taken as a whole, being untrue or misleading in any material respect.

SECTION 3.09 No Material Adverse Effect. There has been no Material Adverse Effect since the date of the Original Financial Statements.

SECTION 3.10 Litigation. No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency (including, but not limited to, investigative proceedings) which, if adversely determined, might reasonably be expected to have a Material Adverse Effect have (to the best of its knowledge and belief) been started or threatened against any Obligor.

SECTION 3.11 Pari passu ranking. Each Obligor’s payment obligations under the Loan Documents rank at least pari passu with all its other present and future unsecured and unsubordinated payment obligations, except for obligations mandatorily preferred by law applying to companies generally.

SECTION 3.12 Taxes. Each Obligor has filed all Tax returns which are required to have been filed and has paid, or made adequate provisions for the payment of, all of its Taxes which are due and payable, except such Taxes, if any, as are being contested in good faith and by appropriate proceedings and as to which such reserves or other appropriate provisions as may be required by GAAP have been established, and except where failure to file such returns or pay such Taxes, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

SECTION 3.13 Taxes on payments. Assuming for these purposes that no Lender is based or conducting business in the Republic of the Marshall Islands or Hong Kong, all amounts payable by any Obligor to the Administrative Parties under the Loan Documents and the Related Contracts may be made without any deduction or withholding for any Taxes.

SECTION 3.14 Stamp duties. Except as notified in writing to by the Administrative Agent by any Obligor, no stamp or registration duty or similar Tax or charge is payable in its jurisdiction of incorporation in respect of any Loan Document or Related Contract.

 

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SECTION 3.15 Environment. Except as may already have been disclosed by the Borrower in writing to the Administrative Agent: (a) each Vessel Owner and its Environmental Representatives have, without limitation, complied with the provisions of all applicable Environmental Laws in relation to each Collateral Vessel in all material respects; (b) each Vessel Owner and its Environmental Representatives have obtained all requisite Environmental Approvals in relation to each Collateral Vessel and are in compliance with such Environmental Approvals; (c) no Vessel Owner or any of their Environmental Representatives have received notice of any Environmental Liability in relation to a Collateral Vessel which alleges that a Vessel Owner is not in compliance in all material respects with applicable Environmental Laws in relation to such Collateral Vessel or Environmental Approvals in relation to such Collateral Vessel; (d) there is no Environmental Liability in relation to any Collateral Vessel pending or, to the knowledge of the Borrower, threatened which is such that a first class Vessel Owner or operator of vessels such as the Collateral Vessels, making all due enquiries and complying in all respects with its obligations under the ISM Code, ought to have known about; and (e) there has been no release of Hazardous Materials by or in respect of any Collateral Vessel about which a first class borrower or operator of vessels such as the Collateral Vessels making all due enquiries and complying in all respects with its obligations under the ISM Code ought to have known about.

SECTION 3.16 Security Interests. No Security Interest exists over any Obligors’ assets which would cause a breach of Section 6.01.

SECTION 3.17 Security Assets. Each Obligor is solely and absolutely entitled to the Security Assets over which it has or will create any Security Interest pursuant to the Security Documents to which it is, or will be, a party and there is no agreement or arrangement, under which it is obliged to share any proceeds of or derived from such Security Assets with any third party.

SECTION 3.18 Collateral Vessel. (a) Each Collateral Vessel is operational, seaworthy and fit for service and is registered in the name of the applicable Vessel Owner at the relevant registry in the Approved Flag State; and (b) except as approved by the Administrative Agent (acting on the instructions of the Required Lenders), there are no arrangements under which Earnings of any Collateral Vessel may be shared with anyone else.

SECTION 3.19 ISM Code and ISPS Code compliance. In respect of each Collateral Vessel, the relevant Vessel Owner is in compliance with the ISM Code and ISPS Code in respect of that Collateral Vessel in all material respects.

SECTION 3.20 No amendments to Related Contracts. Other than as notified to and agreed by the Administrative Agent in writing, there have been no material amendments to any of the Obligatory Insurance or Management Agreements, and the copies of the Eligible Charters and Charter Guarantees provided to the Administrative Agent prior to the Closing Date are correct and complete (and there have been no material amendments thereto) as of the Closing Date.

SECTION 3.21 Money Laundering. Neither any Borrowings hereunder nor the performance of any of the Obligors’ respective obligations under the Loan Documents or Related Contracts will involve any breach by the Obligors or any of their respective Subsidiaries of any money laundering statutes of any jurisdictions where the Obligors or any of their respective Subsidiaries conduct business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental or regulatory agency (collectively, the “Anti-Money Laundering Laws”).

SECTION 3.22 Anti-Corruption and Sanctions. (a) Each Obligor is conducting and will continue to conduct its business in compliance with Anti-Money Laundering Laws and Anti-Corruption Laws; (b) each Obligor has implemented, maintained, and will continue to maintain in effect policies and procedures to ensure its compliance and the compliance by its directors, officers, employees, and agents, with Anti-Money Laundering Laws and Anti-Corruption Laws; (c) none of the

 

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Obligors or any of their subsidiaries is, or, to the knowledge of the Obligors, is owned or controlled by, a Sanctioned Person, or located, organized, or resident in a Sanctioned Jurisdiction; (d) no proceeds of the Program Debt will be made available, directly or indirectly, to or for the benefit of, or used to fund any activities with or business of a Sanctioned Person, or in any country territory that, at the time of such funding, is the subject of Sanctions, or otherwise applied in a manner or for a purpose prohibited by Sanctions or Anti-Corruption Laws, or which would result in a violation of Sanctions by any person (including any person participating in the Program Debt, whether as underwriter, advisor, investor, lender, hedge provider, facility or security agent or otherwise); (e) each Obligor and each of their Subsidiaries is in compliance with all Sanctions, is not, to the best of its knowledge and belief, under investigation for an alleged violation of Sanctions, and shall implement a policy for Sanctions in line with the requirements of this Agreement; (f) each Obligor and each of their Subsidiaries shall not fund all or part of any repayment required to be made pursuant to Program Debt out of proceeds directly or indirectly derived from any business, activities or transactions which would be prohibited by Sanctions or which would otherwise cause any person or a Finance Party to be in breach of Sanctions or to otherwise become the subject or target of Sanctions; and (g) each Obligor and each of their Subsidiaries shall not (and shall procure that no Charterer of any Collateral Vessel will) operate, possess, use, dispose of or otherwise deal with, or procure or allow the ownership, operation, possession, use, disposal of or any other dealing with, each Collateral Vessel or part thereof for any purpose or to any person which would violate or cause any Finance Party to violate, when and as applicable, any Sanctions, any anti-terrorism law or any anti-corruption law in each case applicable to it.

SECTION 3.23 Compliance with laws. To the best of the Borrower’s knowledge and belief, each Obligor is in compliance in all material respects with all laws and regulations applicable to it, including Anti-Corruption Laws and Anti-Money Laundering Laws and is not under investigation for an alleged violation thereof.

SECTION 3.24 Investments Company Act. No Obligor is required to register as an “investment company,” as defined in the United States Investment Company Act of 1940, as amended without reliance on Section 3(c)(1) and/or Section 3(c)(7) of the Investment Company Act. No Obligor is a “covered fund” for purposes of the regulations adopted to implement Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (commonly referred to as the “Volcker Rule”). In making this determination, the Borrower has made this determination on the basis that no Obligor falls within the definition of “investment company” in Section 3(a)(1) of the Investment Company Act, although other bases or exceptions may be available.

SECTION 3.25 Regulation U. No Obligor is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Federal Reserve Board). No proceeds of the Program Debt will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock.

SECTION 3.26 Insolvency. (a) No Obligor is unable, nor admits or has admitted its inability, to pay its debts as such debts become due or has suspended making payments on any of its debts; (b) no Obligor, by reason of actual or anticipated financial difficulties neither has commenced, nor intends to commence, negotiations with one or more of its creditors with a view to rescheduling any of its Indebtedness; (c) the value of the assets of the Borrower is not less than its liabilities (taking into account contingent and prospective liabilities); (d) no moratorium has been, or may, in the reasonably foreseeable future be, declared in respect of any Obligors’ Indebtedness; and (e) no reorganization or liquidation of any Obligor has occurred.

 

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SECTION 3.27 Immunity. (a) The execution by each Obligor of each Loan Document to which it is a party constitutes, and the exercise by it of its rights and performance of its obligations under each such Loan Document will constitute, private and commercial acts performed for private and commercial purposes; and (b) no Obligor will be entitled to claim immunity from suit, execution, attachment or other legal process in any proceedings taken in its jurisdiction of incorporation in relation to any Loan Document.

SECTION 3.28 [Reserved].

SECTION 3.29 Jurisdiction and governing law. (a) Each of the following are legal, valid and binding under the Laws of each Obligor’s jurisdiction of incorporation: (i) its irrevocable submission under this Agreement to the jurisdiction of the courts of the State of New York sitting in New York County, and of the United States District Court of the Southern District of New York, and any appellate court from any thereof; (ii) its agreement that this Agreement is governed by the law of the State of New York; and (iii) its agreement not to claim any immunity to which it or its assets may be entitled; (b) Any judgment obtained in the State of New York will be recognized and be enforceable by the courts of each Obligor’s jurisdiction of incorporation, subject to any statutory or other conditions of such jurisdiction.

SECTION 3.30 Accounts. Except for the Charged Accounts, no Obligor (other than the Guarantor) has opened or instructed any other Person to open, any accounts.

SECTION 3.31 Charters. On each Borrowing Date, any Eligible Charter relating to a Collateral Vessel which is the subject of such Borrowing shall be in full force and effect.

SECTION 3.32 Ownership. The Borrower is a wholly owned Subsidiary of the Guarantor. Each Vessel Owner is a wholly owned Subsidiary of the Borrower. No Obligor (other than the Guarantor) has any Subsidiaries other than Subsidiaries which are themselves Obligors.

SECTION 3.33 Use of proceeds. The proceeds of the Program Debt will be used by the Borrower (a) to finance or refinance in part the acquisition of the Collateral Vessels purchased or to be purchased by the Vessel Owners; (b) for the general corporate purposes of the Borrower and the Guarantor.

SECTION 3.34 Special purpose representations. Except, in each case, with respect to the Guarantor (a) no Obligor has any employees; (b) no Obligor is a party to any contract or agreement with any person, or has conducted any business, or has otherwise created or incurred any liability to any person, other than in connection with the acquisition, chartering and disposition of the Security Assets, the making of Loans or otherwise as permitted by the Loan Documents and activities ancillary thereto; (c) no Obligor is a partner or joint venturer in any partnership or joint venture; and (d) each Obligor has complied in all material respects with all corporate and/or other legal formalities required by its certificate of incorporation, certificate of formation and by-laws, operating agreement, memorandum and articles of association, constitution or similar formation documents, as applicable, and as duly amended prior to the Closing Date, and by Applicable Law, including, among other things, the observance of all restrictions on activity and corporate or other legal form of each such entity’s organizational documents.

 

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SECTION 3.35 Separateness. (a) The Borrower, on behalf of each Obligor (other than the Guarantor) represents that it conducts its business such that it is a separate and readily identifiable business from, and independent of, any Person that is not a Subsidiary, including the Guarantor and each seller under a Purchase Agreement and their respective affiliates (collectively, “Unrelated Parties”), and further covenants as follows:

(i) each Obligor (other than the Guarantor) observes all corporate formalities necessary to remain a legal entity separate and distinct from, and independent of, each Unrelated Party;

(ii) each Obligor (other than the Guarantor) maintains its assets and liabilities separate and distinct from those of each Unrelated Party other than the Borrower, and will not commingle its assets with those of any Unrelated Party other than the Borrower;

(iii) each Obligor (other than the Guarantor) maintains its accounts and funds separate and distinct from the accounts and funds of each Unrelated Party other than the Borrower and will receive, deposit, withdraw and disburses its funds separately from any funds of any Unrelated Party other than the Borrower;

(iv) each Obligor (other than the Guarantor) maintains records, books, accounts and minutes separate from those of any Unrelated Party;

(v) each Obligor (other than the Guarantor) conducts its own business in its own name, and not in the name of any Unrelated Party;

(vi) each Obligor (other than the Guarantor) maintains an arm’s-length relationship with its Affiliates;

(vii) each Obligor (other than the Guarantor) maintains separate financial statements from each Unrelated Party, or if part of a consolidated group, then it will be shown as a separate member of such group;

(viii) each Obligor (other than the Guarantor) pays its own liabilities and obligations out of its own funds, whether in the ordinary course of business or not, as a legal entity separate from each Unrelated Party, provided that liabilities and obligations of Vessel Owners may be paid by Borrower;

(ix) each Obligor (other than the Guarantor) uses separate stationery, invoices and checks from those of each Unrelated Party;

(x) each Obligor (other than the Guarantor) holds itself out as a separate entity, and shall correct any known misunderstanding regarding its status as a separate entity;

(xi) each Obligor (other than the Guarantor) has not agreed to pay or become liable for any Indebtedness of any Unrelated Party;

(xii) each Obligor (other than the Guarantor) has not held out that it is a division of any Unrelated Party, or that any Unrelated Party is a division of it;

(xiii) each Obligor (other than the Guarantor) has not induced any third party to rely on the creditworthiness of any Unrelated Party other than the Guarantor in order that such third party will be induced to contract with it;

 

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(xiv) each Obligor (other than the Guarantor) has not entered into any transactions between it and any Unrelated Party that are more favorable to the Unrelated Party than transactions that the parties would have been able to enter into at such time on an arm’s-length basis with a non-affiliated third party, other than any agreements in effect on the Closing Date;

(xv) each Obligor (other than the Guarantor) observes all corporate or other procedures, including minimum capitalization requirements, required under applicable law and under its constitutive documents; and

(xvi) each Obligor’s (other than the Guarantor) directors acts in accordance with their duties at law and to exercise independent judgment, and shall not breach those duties or act solely in accordance with any direction, opinion, recommendation or instruction of any Unrelated Party in relation to the approval or rejection of, or the exercise of any voting power in relation to, any transaction approval requirements.

(b) The Borrower generally carries on its business and manages its affairs as an independent business separate and identifiable from the business of each Unrelated Party and any other person.

SECTION 3.36 Beneficial Ownership Certification. As of the Restatement Date, to the best knowledge of the Borrower, the information included in the Beneficial Ownership Certification provided on or prior to the Closing Date to any Lender in connection with this Agreement is true and correct in all respects.

ARTICLE IV

CONDITIONS

SECTION 4.01 Initial Borrowing Date. The obligation of each Lender to make Credit Extensions under this Agreement (as amended and restated on the Restatement Date) is subject to the satisfaction (or waiver in accordance with Section 9.02) of the following conditions (and, in the case of each document specified in this Section to be received by the Administrative Agent, such document shall be in form and substance satisfactory to the Administrative Agent and each Lender, and shall only be required to the extent not already provided to the Administrative Agent on or prior to the Restatement Date):

(a) Loan Documents. Copies of counterparts of each of the following documents duly executed by all parties thereto:

(i) this Agreement;

(ii) the Intercreditor Agreement, together with an Additional Secured Debt Designation, a Reaffirmation Agreement and Intercreditor Joinder (as each such term is defined in the Intercreditor Agreement);

(iii) the Fee Letters;

(iv) any Intra Group Loan Agreement;

 

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(v) the Share Pledge in respect of the Borrower (together, to the extent relevant, with any ancillary document required to be provided thereunder, including directors’ resignation letters and letters of authority, signed undated share transfer forms and irrevocable proxies);

(vi) the Account Charge(s) in respect of the Charged Accounts, along with each notice and acknowledgement of charge to the extent applicable;

(b) Corporate Documents. In respect of each of the Guarantor and the Borrower:

(i) a copy, certified by a duly authorized representative of such person to be a true, complete and up to date copy, of the constitutional documents of that person;

(ii) a copy, certified by a duly authorized representative of such person to be a true copy and as being in full force and effect and not amended or rescinded, of a resolution of the board of directors of such person:

(A) approving the terms of, and the transactions contemplated by, the Loan Documents to which it is a party and resolving that it execute, deliver and perform the Loan Documents to which it is a party;

(B) authorizing a person or persons to execute and deliver, on behalf of that person, the Loan Documents to which it is party and any notices or other documents to be given pursuant thereto;

(iii) a copy, certified by a duly authorized representative of that person to be a true copy and as being in full force and effect and not amended or rescinded of the power of attorney (if any) issued by or on behalf of that person, and not amended or rescinded, authorizing the execution by the attorneys named therein of the Loan Documents to which it is a party; and

(iv) specimen signatures of the signatories of that person (including any attorney named in the power of attorney referred to in paragraph (iii) above), certified by an officer of that person.

(c) Service of Process. Evidence that the process agent specified in any of the Loan Documents by an Obligor has accepted its appointment in relation to the relevant Obligor.

(d) “Know your customer”.

(i) Each of the Finance Parties shall have received satisfactory information in order to satisfy their respective “know your customer” requirements.

(ii) To the extent the Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, at least five days prior to the Closing Date, any Lender that has requested, in a written notice to the Borrower at least 10 days prior to the Closing Date, a Beneficial Ownership Certification in relation to the Borrower shall have received such Beneficial Ownership Certification (provided that, upon the execution and delivery by such Lender of its signature page to this Agreement, the condition set forth in this Section (ii) shall be deemed to be satisfied).

(e) Opinions.

(i) A due execution, capacity and enforcement legal opinion from Marshall Islands’ counsel as to matters of Marshall Islands’ law and, if applicable, Singapore counsel as to matters of Singapore’s law and/or such other counsel where any relevant Obligor may be incorporated in respect of matters of law in such jurisdiction.

 

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(ii) If required, reliance letter(s) issued by Marshall Islands and/or Singapore counsel and/or such other counsel as may be relevant with respect to any previous legal opinion(s) issued on matters of law in such other jurisdiction.

(iii) A legal opinion from Milbank LLP as to matters of New York law, and if applicable, reliance letter(s) issued with respect to any previous legal opinion issued on such matters.

(iv) A due execution and capacity legal opinion from Bermudan counsel as to matters of Bermudan law, or if applicable, reliance letter(s) issued by Bermudan counsel with respect to any previous legal opinion issued on such matters.

(v) An enforceability legal opinion from Hong Kong counsel as to matters of Hong Kong law, or if applicable, reliance letter(s) issued by Hong Kong counsel with respect to any previous legal opinion(s) issued on such matters.

(vi) An enforceability legal opinion from British Columbian counsel as to matters of British Columbia law, or if applicable, reliance letter(s) issued by British Columbian counsel with respect to any previous legal opinion issued on such matters.

(vii) A second party opinion from Sustainalytics (acting through its entity Jantzi Research Inc. incorporated in Canada) as to the alignment of the Term Loan with the Sustainability Linked Loan Principles.

(f) Fees and Expenses. The Obligors shall have paid all fees, costs and expenses (including legal fees and expenses) agreed in writing to be paid by it to the Finance Parties in connection herewith (including pursuant to the Fee Letters) to the extent invoiced at least two (2) Business Days prior to closing (and, in the case of expenses, including legal fees and expenses), provided that any amounts not invoiced two (2) Business Days prior to closing shall be paid promptly, and not later than 10 days after, demand therefor.

(g) Representations and Warranties. The representations and warranties made in Article 3 are true and correct.

(h) No Default. No Default is outstanding or would result from such initial Borrowing.

(i) Other Documents. The Administrative Agent shall have received such other documents as the Administrative Agent or the Required Lenders (through the Administrative Agent) may reasonably request.

Without limiting the generality of Section 8.03(c), for purposes of determining satisfaction of the conditions specified in this Section, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Borrowing Date specifying its objection thereto.

SECTION 4.02 Conditions to Borrowings. The obligation of each Lender to make a Borrowing available (including its initial Borrowing) is additionally subject to the satisfaction (or waiver in accordance with Section 9.02) of the following conditions (and, in the case of each document specified in this Section to be received by the Administrative Agent, such document shall be in form and substance satisfactory to the Administrative Agent and each Lender):

 

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(a) Loan Documents and Related Contracts. Each of the following documents duly executed by all parties thereto, to the extent applicable:

(i) copy of the Borrowing Request;

(ii) to the extent such Borrowing is used to acquire a Collateral Vessel (any such Borrowing, a “Vessel Borrowing”), an original Mortgage (and evidence satisfactory to the Administrative Agent that such Mortgage has been or will be, immediately following the Borrowing, duly registered with applicable registry of the Approved Flag State) in respect of each relevant Collateral Vessel subject to the Borrowing (each a “Relevant Vessel”);

(iii) a copy (with originals to follow promptly following closing) of an executed Share Pledge in respect of each relevant Vessel Owner (each a “Relevant Vessel Owner”), together, to the extent relevant, with any ancillary document required to be provided thereunder, including directors’ resignation letters and letters of authority, signed undated share transfer forms and irrevocable proxies;

(iv) copies of each Intra Group Loan Agreement;

(v) solely in the case of a Vessel Borrowing, a copy (with originals to follow promptly following closing) of the Intercreditor Joinder (Grantor) (as such term is defined in the Intercreditor Agreement) in respect of each Relevant Vessel Owner;

(vi) solely in the case of a Vessel Borrowing, a copy (with originals to follow promptly following closing) of an executed Account Charge in respect of each relevant Vessel Owner Account, where applicable;

(vii) solely in the case of a Vessel Borrowing, a copy (with originals to follow promptly following closing) of an executed General Assignment in respect of each Relevant Vessel;

(viii) solely in the case of a Vessel Borrowing, a copy (with originals to follow promptly following closing) of an executed Deed of Covenant in respect of each Relevant Vessel, where applicable;

(ix) solely in the case of a Vessel Borrowing, a certified copy of the Management Agreement in respect of each Relevant Vessel;

(x) solely in the case of a Vessel Borrowing, an original Management Agreement Assignment in respect of each Relevant Vessel;

(xi) solely in the case of a Vessel Borrowing, an original Manager’s Undertaking;

(xii) solely in the case of a Vessel Borrowing, an original Insurances Assignment in respect of each Relevant Vessel;

(xiii) solely in the case of a Vessel Borrowing, a certified copy of any Eligible Charter in respect of each Relevant Vessel, where applicable;

(xiv) solely in the case of a Vessel Borrowing, a certified copy of any Charter Guarantee in respect of each Relevant Vessel, where applicable;

 

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(xv) solely in the case of a Vessel Borrowing, a certified copy of the Purchase Agreement in respect of each Relevant Vessel, along with each of the documentary conditions precedent set out therein to the extent requested by the Administrative Agent;

(xvi) solely in the case of a Vessel Borrowing, a copy of the Bill of Sale and the protocol of delivery and acceptance in respect of each Relevant Vessel (and evidence satisfactory to the Administrative Agent that, to the extent required, such documents have been or will be, immediately following the Borrowing, duly registered with applicable registry of the Approved Flag State); and

(xvii) executed copies (with originals to follow promptly following closing) of all notices and acknowledgments of assignment required to be served under each Security Document referred to above, provided that any acknowledgements to be provided by any Person which is not a member of the Guarantor Group shall be permitted to be provided within fourteen (14) Business Days of the applicable Borrowing Date and the requirement to provide any acknowledgement from a Charterer shall be subject to the provisions of Section 5.24.

(b) Relevant Vessel documents. Certified copies of: (i) a classification certificate (including a confirmation of class or equivalent certificate) in respect of each Relevant Vessel showing each Relevant Vessel to be in class free from any overdue recommendation, condition or qualification affecting class or, in the event that this is not available, a faxed copy with a certified copy to follow as soon as practicable; (ii) a valid Safety Management Certificate for each Relevant Vessel; (iii) a valid Document of Compliance in respect of each Relevant Vessel; (iv) a valid International Ship Security Certificate for each Relevant Vessel; and (v) to the extent the applicable Relevant Vessel owner has or is required to have such certificate, the certificate listing all the potentially hazardous materials on board each Relevant Vessel.

(c) Obligatory Insurances.

(i) Certified copies of the Obligatory Insurances in respect of each Relevant Vessel; and

(ii) Fax or email confirmation from each broker and club concerned with the Obligatory Insurances of each Relevant Vessel that:

(A) the relevant cover is in effect;

(B) they will accept notice of assignment of the Obligatory Insurances in favor of the Security Trustee and execute an acknowledgement of the notice in the form reasonably acceptable to the Security Trustee;

(C) they will restrict their lien for unpaid premiums under any fleet policy to unpaid premiums in respect of such Relevant Vessel only;

(D) they will issue a letter of undertaking in the form provided for in the Insurances Assignment;

(E) they will accept endorsement of a loss payable clause on the policies in the form provided for in the Insurances Assignment (in the case of brokers and insurers other than clubs) or will note the interest of the Administrative Agent in the entry for the Relevant Vessel by way of a loss payable clause in their current standard form (in the case of clubs); and

 

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(F) they are not aware of any mortgage, charge, assignment or other encumbrance affecting the Obligatory Insurances with which they are concerned (other than any previously disclosed by the Borrower or the Vessel Owner to the Administrative Agent in writing),

or in form and substance satisfactory to the Administrative Agent’s insurance adviser.

(iii) Receipt by the Administrative Agent of a final insurance report prepared by BankServe Insurance Services Limited verifying Borrower’s compliance with the insurance requirements set forth in Section 5.26 and 5.27.

(d) Compliance Certificate. A Compliance Certificate signed by the Borrower and certifying, taking account of the proposed Borrowing: (i) the BB Ratio and that no BB Event will occur or is continuing (including confirmation as to any Excluded Collateral Vessels or exclusions of Asset Values due to any Concentration Limit Event); (ii) the DSCR Ratio and that no DSCR Cash Sweep Event will occur or is continuing; (iii) compliance with the Guarantor Financial Covenants; (iv) compliance with the Concentration Limit Requirements; and (v) compliance with the Hedging Requirement. Such Compliance Certificate will also attach appraisals in form and substance satisfactory to the Administrative Agent setting out (in reasonable detail) the Asset Value and Terminal Value of each Relevant Vessel.

(e) Borrower and Guarantor corporate documents. A bring-down certificate from each of the Borrower and the Guarantor in respect of the items referred to in Section 4.01(b) and, in the case of the Borrower’s bring-down certificate, certifying: (i) that no Default has occurred and is continuing; (ii) that the representations and warranties made in Article 3 shall be true and correct both before and after giving effect to the Borrowing; and (iii) to the Borrower’s knowledge, that the parties to any Eligible Charter in respect of each Relevant Vessel shall be in compliance with the requirements of such Eligible Charter.

(f) Relevant Vessel Owner and Manager corporate documents. In respect of each Relevant Vessel Owner and the Manager:

(i) a copy, certified by a duly authorized representative of such Person to be a true, complete and up to date copy, of the constitutional documents of that Person;

(ii) a copy, certified by a duly authorized representative of such Person to be a true copy and as being in full force and effect and not amended or rescinded, of a resolution of the board of directors of such Person:

(A) approving the terms of, and the transactions contemplated by, the Loan Documents to which it is a party and resolving that it execute, deliver and perform the Loan Documents to which it is a party;

(B) authorizing a person or persons to execute and deliver, on behalf of that person, the Loan Documents to which it is party and any notices or other documents to be given pursuant thereto;

(iii) a copy, certified by a duly authorized representative of that person to be a true copy and as being in full force and effect and not amended or rescinded of the power of attorney (if any) issued by or on behalf of that person, and not amended or rescinded, authorizing the execution by the attorneys named therein of the Loan Documents to which it is a party; and

 

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(iv) specimen signatures of the signatories of that person (including any attorney named in the power of attorney referred to in paragraph (c) above), certified by an officer of that person.

(g) Service of Process. Evidence that the process agent specified in any of the Loan Documents by an Obligor has accepted its appointment in relation to the relevant Obligor.

(h) “Know your customer”. Each of the Finance Parties shall have received satisfactory information in order to satisfy their respective “know your customer” requirements.

(i) Opinions.

(i) A due execution, capacity and enforcement legal opinion from Marshall Islands counsel as to matters of Marshall Islands’ law and/or from such other counsel as to matters of such other jurisdiction where any Obligor may be incorporated.

(ii) A legal opinion from Milbank LLP as to matters of New York law.

(iii) A legal opinion in relation to the registration and enforceability of the Mortgage (if applicable) under the laws of Hong Kong or the laws of such Approved Flag State, as may be applicable.

(j) Existing Security. If applicable, evidence in form and substance satisfactory to the Administrative Agent of the release and discharge of any existing mortgage or other Security Interest affecting any Relevant Vessel, or any other releases in connection with any interest which would or might otherwise, in the Administrative Agent’s opinion, adversely affect the security constituted by the Security Documents.

(k) Taxes. Evidence that any Taxes due and payable by the Borrower or any Relevant Vessel Owner in connection with the Relevant Vessel Owner’s purchase of the Relevant Vessel have been paid and discharged in full.

(l) Fees and Expenses. The Obligors shall have paid all fees, costs and expenses (including legal fees and expenses) invoiced at least two (2) Business Days prior to the applicable Borrowing Date and agreed in writing to be paid by it to the Finance Parties in connection herewith (including pursuant to the Fee Letters) to the extent due (and, in the case of expenses, including legal fees and expenses), provided that any amounts not invoiced two (2) Business Days prior to closing shall be paid promptly, and not later than 10 days after, demand therefor.

(m) No Default. No Default is outstanding or would result from the Borrowing Date.

(n) Other Documents. The Administrative Agent shall have received such other documents as the Administrative Agent or the Required Lenders (through the Administrative Agent) may reasonably request.

SECTION 4.03 [Reserved].

SECTION 4.04 Conditions to Restatement. This Agreement shall not become effective until the date on which each of the following conditions is satisfied (and, in the case of each document specified in this Section to be received by the Administrative Agent, such document shall be in form and substance satisfactory to the Administrative Agent and each Lender):

 

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(a) Loan Restatement Documents. The Administrative Agent (or its counsel) shall have received from each party hereto executed counterparts of:

(i) this Agreement;

(ii) Intercreditor Agreement (as amended and restated on or about the date hereof);

(iii) the amendment agreement in respect of the Account Charge relating to the HK Collection Account, together with any and all notices and acknowledgements entered into in connection therewith; and

(iv) each of the Existing Program Debt Documents (as amended and restated on or about the date hereof).

(b) Security Confirmation. The Administrative Agent (or its counsel) shall have received from each of the Manager and any sub-managers, confirmations as to any existing security granted in connection with this Agreement and any other Secured Debt Documents.

(c) Fee Letters. Each of the Agent and the other Finance Parties party hereto shall have received from each other party thereto executed counterparts of any Fee Letters entered into in connection with this Agreement.

(d) Opinions. The Administrative Agent (or its counsel) and each Lender shall have received:

(i) a due execution, capacity and enforcement legal opinion from Marshall Islands’ counsel as to matters of Marshall Islands’ law, from Singapore counsel as to matters of Singapore law and/or from such other counsel as to matters of such other jurisdiction where any Obligor may be incorporated;

(ii) a legal opinion from Bermudan counsel as to matters of Bermudan law;

(iii) a legal opinion from Hong Kong counsel as to matters of Hong Kong law; and

(iv) a legal opinion from Milbank LLP as to matters of New York law.

(e) Corporate Documents. In respect of each of the Guarantor, the Borrower, each Vessel Owner and the Manager:

(i) a copy, certified by a duly authorized representative of such person to be a true, complete and up to date copy, of the constitutional documents of that person;

(ii) a copy, certified by a duly authorized representative of such person to be a true copy and as being in full force and effect and not amended or rescinded, of a resolution of the board of directors of such person:

(A) approving the terms of, and the transactions contemplated by, the Intercreditor Agreement and this Agreement and any other Loan Documents to which it is a party and resolving that it execute, deliver and perform the Loan Documents to which it is a party;

 

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(B) authorizing a person or persons to execute and deliver, on behalf of that person, the Loan Documents to which it is party and any notices or other documents to be given pursuant thereto;

(iii) a copy, certified by a duly authorized representative of that person to be a true copy and as being in full force and effect and not amended or rescinded of the power of attorney (if any) issued by or on behalf of that person, and not amended or rescinded, authorizing the execution by the attorneys named therein of the Loan Documents to which it is a party; and

(iv) specimen signatures of the signatories of that person (including any attorney named in the power of attorney referred to in paragraph (iii) above), certified by an officer of that person.

(f) “Know your customer”.

(i) Each of the Finance Parties shall have received satisfactory information in order to satisfy their respective “know your customer” requirements.

(ii) To the extent the Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, at least five days prior to the Restatement Date, any Lender that has requested, in a written notice to the Borrower at least 10 days prior to the Restatement Date, a Beneficial Ownership Certification in relation to the Borrower shall have received such Beneficial Ownership Certification (provided that, upon the execution and delivery by such Lender of its signature page to this Agreement, the condition set forth in this Section (ii) shall be deemed to be satisfied).

(g) Fees and Expenses. The Obligors shall have paid all fees, costs and expenses (including legal fees and expenses) agreed in writing to be paid by it to the Finance Parties in connection herewith (including pursuant to the Fee Letters) to the extent invoiced at least two (2) Business Days prior to the Restatement Date (and, in the case of expenses, including legal fees and expenses), provided that any amounts not invoiced two (2) Business Days prior to the Restatement Date shall be paid promptly, and not later than 10 days after, demand therefor.

(h) Representations and Warranties. The representations and warranties made in Article 3 are true and correct.

(i) No Default. No Default is outstanding or would result from the Restatement Date.

(j) Other Documents. The Administrative Agent shall have received such other documents as the Administrative Agent or the Required Lenders (through the Administrative Agent) may reasonably request.

SECTION 4.05 Post-Restatement Items. Within 1 Business Day of the Restatement Date, the Administrative Agent shall have received evidence satisfactory to it that the Account Bank in respect of the Collection Account, has received and acknowledged receipt of, a copy of the Intercreditor Agreement (as amended and restated on or about the date hereof).

 

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ARTICLE V

AFFIRMATIVE COVENANTS

Until the Commitments have expired or been terminated and all Obligations shall have been paid in full, the Borrower covenants and agrees with the Lenders that:

SECTION 5.01 Financial Statements. The Borrower will furnish to the Administrative Agent and each Lender: (a) the audited consolidated financial statements of the Guarantor for each of its financial years ending after the Restatement Date; and (b) quarterly consolidated statements of the Guarantor for each quarter of each of their financial years ending after the Restatement Date. All financial statements must be supplied promptly after they are available and: (i) in the case of audited financial statements, within 180 days of the end of the relevant financial period; and (ii) in the case of quarterly financial statements, within 90 days of the end of the relevant financial period. The Borrower must ensure that each set of the financial statements supplied under this Agreement fairly represents in all material respects the financial condition (consolidated or otherwise) of the Guarantor as at the date to which those financial statements were drawn up, subject, in the case of interim financial statements, to year-end adjustments and the absence of footnotes. The Borrower must notify the Administrative Agent of any change to the basis on which the Guarantor’s audited financial statements are prepared. If requested by the Administrative Agent, the Borrower must supply or procure that the following are supplied to the Administrative Agent: (A) a full description of any change notified above; and (B) sufficient information to enable the Lenders to make a proper comparison between the financial position shown by the set of financial statements prepared on the changed basis and its most recent audited consolidated financial statements delivered to the Administrative Agent and the Lenders under this Agreement. If requested by the Administrative Agent, the Guarantor must enter into discussions for a period of not more than thirty (30) days with a view to agreeing to any amendments required to be made to this Agreement to place the Administrative Agent and the Lenders in the same position as it would have been in if the change had not happened. If no such agreement is reached on the required amendments to this Agreement, the Borrower must ensure that the Guarantor’s or its auditors certify those amendments; the certificate of the auditors will be, in the absence of manifest error, binding on all the Parties.

SECTION 5.02 Compliance Certificates. The Borrower will deliver to the Administrative Agent a Compliance Certificate certified by the Borrower and the Guarantor in the form set out in Exhibit B on the following dates:

(a) within 2 Business Days following each Determination Date;

(b) five (5) days prior to a Vessel Disposition and if any related Net Sale Proceeds shall be used by the Borrower in making a prepayment in accordance with this Agreement and Section 4.02(e) of the Intercreditor Agreement, as of the date of such prepayment; or

(c) the date of any Total Loss of a Collateral Vessel (as determined by the Administrative Agent and notified to the Borrower);

(d) five (5) days prior to a Vessel Substitution Date;

(e) upon the release of any Security Assets; and

(f) upon any Borrowing Date.

Each Compliance Certificate supplied by the Borrower and the Guarantor shall, amongst other things, set out (in reasonable detail) computations as to compliance with the financial covenants set forth in Section 6.09 below and the Concentration Limit Requirements and must be signed by an officer of the Guarantor.

 

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SECTION 5.03 Valuation.

(a) The valuation of a Collateral Vessel shall be the mean average of two valuations each certified in Dollars and carried out by two of the Approved Valuers (without physical inspection of the relevant Collateral Vessel), reporting to the Administrative Agent by way of written reports in form and substance satisfactory to the Administrative Agent (acting reasonably) on the basis of a sale for prompt delivery of the Collateral Vessel for cash (free of Security Interests), on a without charter basis and at arm’s-length on normal commercial terms as between willing seller and buyer.

(b) There shall be deducted from any value or valuation produced in accordance with this Section 5.03 an amount equal to the sum of (i) the amount which is owing at such time plus (ii) the amount which is scheduled to become due prior to the due date of the next valuation pursuant to clause (d) of this Section 5.03, in each case under the foregoing clauses (b)(i) and (ii), solely to the extent such amount is secured on the Collateral Vessel concerned by any prior or equal ranking Security Interest (other than in favor of the Security Trustee to secure the Secured Obligations).

(c) Prior to each Borrowing Date in respect of the acquisition of one or more Collateral Vessels, the Borrower will procure a valuation in relation to each such Collateral Vessel, on the basis described in subsections 5.03(a) and (b) above.

(d) In respect of the Collateral Vessels, the Borrower will procure updated valuations on the basis described in this Section 5.03 every six months as of December 31 and June 30, provided that if a BB Event occurs and is not cured on the immediately succeeding Payment Date, the Borrower shall procure updated valuations on each Determination Date until such BB Event is cured. Such valuations shall be (or have been) used as the basis for determining the BB Ratio and shall be attached to each Compliance Certificate delivered pursuant to Section 5.02.

(e) The Borrower will procure in favor of the Administrative Agent and the Approved Valuers, all such information as they may reasonably require in order to effect such valuations.

(f) All valuations shall be at the expense of the Borrower.

(g) Any valuation under this Section 5.03 shall be binding and conclusive (save for manifest error).

SECTION 5.04 Access to Books and Records. Upon the request of the Administrative Agent, the Obligors shall provide the Administrative Agent and any of its representatives, professional advisors and contractors with access to, and permit inspection of, its books and records, in each case at reasonable times and upon reasonable notice; provided that unless an Event of Default has occurred and is continuing, such inspections shall not occur more than one time during any calendar year.

SECTION 5.05 Information—miscellaneous.

(a) Each of the Borrower and the Guarantor must supply to the Administrative Agent in sufficient copies (which may take the form of an electronic copy) for all the Lenders:

(i) information with respect to the Collateral Vessels reasonably requested by Administrative Agent and copies of any publicly available information regarding the Obligors;

 

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(ii) promptly upon becoming aware of them, details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against it and which would reasonably be expected, if adversely determined, to have a Material Adverse Effect;

(iii) promptly upon becoming aware of them, details of any claim, lawsuit, action, proceedings or investigation which are current, threatened or pending against it with respect to Sanctions; and

(iv) promptly on request (i) such further information, in sufficient copies for all the Lenders, regarding the financial condition and operations of the Obligors as the Administrative Agent or as the Lenders may reasonably request and (ii) information and documentation reasonably requested by the Administrative Agent or any Lender for purposes of compliance with the Beneficial Ownership Regulation.

SECTION 5.06 Notification of Default.

(a) Unless the Administrative Agent has already been so notified, the Borrower must notify the Administrative Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence.

(b) Promptly on request by the Administrative Agent but not more often than once in any 3 month period, unless the Administrative Agent, acting reasonably, believes an Event of Default has occurred and is continuing (in which event the Administrative Agent shall specify the applicable Event of Default and shall be entitled to make such requests as and when it considers it appropriate to do so), the Borrower must supply to the Administrative Agent a certificate, signed by two (2) of its authorized signatories on its behalf, certifying that no Event of Default is continuing or, if an Event of Default is continuing, specifying the Event of Default and the steps, if any, being taken to remedy it.

SECTION 5.07 Know your customer checks.

(a) If:

(i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;

(ii) any change in the status of an Obligor after the date of this Agreement; or

(iii) a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,

obliges the Administrative Agent or any Lender (or, in the case of Section 5.07(a)(iii), any prospective new Lender) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, the Borrower shall promptly upon the request of the Administrative Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Administrative Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in Section 5.07(a)(iii), on behalf of any prospective new Lender) in order for the Administrative Agent, such Lender or, in the case of the event described in Section 5.07(a)(iii), any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Loan Documents,

 

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(b) Each Lender shall promptly upon the request of the Administrative Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Administrative Agent (for itself) in order for the Administrative Agent to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Loan Documents.

(c) The Borrower shall promptly upon the request of the Administrative Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Administrative Agent (for itself or on behalf of any Lender) or any Lender in order for the Administrative Agent or such Lender to refresh and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Loan Documents, provided that the Borrower shall not be required to comply with any such request from the Administrative Agent or any Lender more than once in any twelve (12) month period.

SECTION 5.08 Use of websites. The Borrower acknowledges and agrees that any information under this Agreement may be delivered to a Lender (through the Administrative Agent) on to an electronic website if:

(a) the Administrative Agent and the Lender agree;

(b) the Administrative Agent appoints a website provider and designates an electronic website for this purpose;

(c) the designated website is used for communication between the Administrative Agent and the Lenders;

(d) the Administrative Agent notifies the Lenders of the address and password for the website;

(e) the information can only be posted on the website by the Administrative Agent; and

(f) the information posted is in a format agreed between the Borrower and the Administrative Agent.

The cost of the website shall be borne by the Borrower, subject to such cost being agreed by the Borrower beforehand. Any Lender may request, through the Administrative Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the designated website. The Borrower shall at its own cost comply with any such request within ten (10) Business Days.

SECTION 5.09 Authorizations. Each Obligor must promptly obtain, maintain and comply, in all material respects, with the terms of any authorization required under any Applicable Law to enable it to perform its obligations under, or for the validity or enforceability of, any Loan Document.

SECTION 5.10 Compliance with laws. Each Obligor must comply and must procure that the Manager complies in all material respects with all Applicable Laws to which it is subject.

SECTION 5.11 Pari passu ranking. Each Obligor must ensure that its payment obligations under the Loan Documents rank at least pari passu with all its other present and future unsecured and unsubordinated payment obligations, except for obligations mandatorily preferred by law applying to companies generally.

 

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SECTION 5.12 Place of business. Each Obligor must:

(a) establish and maintain a place of business in, and shall keep its corporate documents and records at any of, Hong Kong, the Republic of Singapore and Vancouver, or any of them, provided the Administrative Agent is satisfied that such establishment in such location does not adversely affect the validity, enforceability or effectiveness of any Loan Document and does not give rise to any requirement under any Applicable Law for a deduction for withholding Tax; and

(b) except with respect to the Guarantor, will not establish, or do anything as a result of which it would be deemed to have, a place of business in any other location other than Hong Kong, the Republic of Singapore or Vancouver without the consent of the Administrative Agent (acting on the instructions of the Required Lenders, such consent not to be unreasonably withheld or delayed).

SECTION 5.13 Security. Each Obligor:

(a) will procure that each Mortgage to which it is a party is, and continues to be, registered as a first priority mortgage on the registry of the relevant Approved Flag State;

(b) without prejudice to paragraph (a) will procure that the Mortgages and any other security conferred by it under any Security Document are registered as a first priority interest with the relevant authorities within the period prescribed by the Applicable Laws and is maintained and perfected with the relevant authorities;

(c) will at its own cost, use best efforts to ensure that any Loan Document to which it is a party validly creates the obligations and Security Interests which it purports to create; and

(d) without limiting the generality of paragraph (a) above, will at its own cost, promptly register, file, record or enroll any Loan Document to which it is a party with any court or authority, pay any stamp, registration or similar tax payable in respect of any such Loan Document, give any notice or take any other step which, in the reasonable opinion of the Administrative Agent, is or has become necessary for any such Loan Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.

SECTION 5.14 Separateness Covenants. Each Obligor (other than the Guarantor) shall conduct its business such that it is a separate and readily identifiable business from, and independent of, any Unrelated Party, and further covenants as follows:

(a) Each Obligor (other than the Guarantor) will observe all corporate formalities necessary to remain a legal entity separate and distinct from, and independent of, each Unrelated Party;

(b) Each Obligor (other than the Guarantor) shall maintain its assets and liabilities separate and distinct from those of each Unrelated Party other than the Borrower, and will not commingle its assets with those of any Unrelated Party other than the Borrower;

(c) Each Obligor (other than the Guarantor) shall maintain its accounts and funds separate and distinct from the accounts and funds of each Unrelated Party other than the Borrower and will receive, deposit, withdraw and disburse its funds separately from any funds of any Unrelated Party other than the Borrower;

(d) Each Obligor (other than the Guarantor) shall maintain records, books, accounts and minutes separate from those of any Unrelated Party;

 

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(e) Each Obligor (other than the Guarantor) shall conduct its own business in its own name, and not in the name of any Unrelated Party;

(f) Each Obligor (other than the Guarantor) shall maintain an arm’s-length relationship with its Affiliates;

(g) Each Obligor (other than the Guarantor) shall maintain separate financial statements from each Unrelated Party, or if part of a consolidated group, then it will be shown as a separate member of such group;

(h) Each Obligor (other than the Guarantor) shall pay its own liabilities and obligations out of its own funds, whether in the ordinary course of business or not, as a legal entity separate from each Unrelated Party, provided that liabilities and obligations of Vessel Owners may be paid by Borrower;

(i) Each Obligor (other than the Guarantor) shall use separate invoices and checks from those of each Unrelated Party;

(j) Each Obligor (other than the Guarantor) shall hold itself out as a separate entity, and correct any known misunderstanding regarding its status as a separate entity;

(k) Each Obligor (other than the Guarantor) shall not agree to pay or become liable for any Indebtedness of any Unrelated Party;

(l) Each Obligor (other than the Guarantor) shall not hold out that it is a division of any Unrelated Party, or that any Unrelated Party is a division of it;

(m) Each Obligor (other than the Guarantor) shall not induce any third party to rely on the creditworthiness or any Unrelated Party other than the Guarantor in order that such third party will be induced to contract with it;

(n) Each Obligor (other than the Guarantor) shall not enter into any transactions between it and any Unrelated Party that are more favorable to the Unrelated Party than transactions that the parties would have been able to enter into at such time on an arm’s-length basis with a non-affiliated third party, other than any agreements in effect on the Closing Date; and

(o) Each Obligor (other than the Guarantor) shall observe all corporate or other procedures required under applicable law and under its constitutive documents; and

(p) Each Obligor (other than the Guarantor) shall procure that each of its directors will act in accordance with their duties at law and to exercise independent judgment, and shall not in breach of those duties, act solely in accordance with any direction, opinion, recommendation or instruction of any Unrelated Party in relation to the approval or rejection of, or the exercise of any voting power in relation to, any transaction approval requirements.

SECTION 5.15 Registration of the Collateral Vessels. Each Obligor shall and procure that the Manager shall:

(a) procure and maintain the valid and effective provisional registration of the Collateral Vessels under the flag of an Approved Flag State and shall effect permanent registration of the Collateral Vessel within two months following the Borrowing Date, and shall ensure nothing is done or omitted by which the registration of the Collateral Vessels would or might be defeated or imperiled; and

 

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(b) not change the name or port of registration of the Collateral Vessels without the prior written notice to the Administrative Agent.

SECTION 5.16 Classification and repair. Each Obligor will, and will procure that the Manager will:

(a) ensure that the Collateral Vessels are surveyed from time to time as required by the Classification Society in which that Collateral Vessel is for the time being entered and maintain and preserve each Collateral Vessel in good working order and repair, ordinary wear and tear excepted, and in any event in such condition as will entitle each to classification free of all recommendations or conditions against class that are not overdue;

(b) procure that all repairs to or replacement of any damaged, worn or lost parts or equipment shall be effected in such manner (both as regards workmanship and quality of materials) as not to diminish the value of the Collateral Vessels;

(c) unless required to comply with clause (e) below, not remove any material part of any of the Collateral Vessels, or any item of equipment installed on any of the Collateral Vessels unless 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 Security Interest (other than any Permitted Liens) or any right in favor of any person other than the Administrative Agent and becomes on installation on that Collateral Vessel the property of the relevant Vessel Owner and subject to the security constituted by the relevant Security Document(s) provided that such Vessel Owner may install and remove equipment owned by a third party if the equipment can be removed without any risk of material damage to a Collateral Vessel;

(d) ensure that each Collateral Vessel complies in all material respects with all Applicable Laws from time to time applicable to vessels registered under the laws and flag of the relevant Approved Flag State;

(e) not without the prior written consent of the Administrative Agent (such consent not to be unreasonably withheld), cause or permit to be made any substantial change in the structure, type or performance characteristics of any of the Collateral Vessels and provide notification of such substantial changes in structure, type or performance characteristics of any of the Collateral Vessels to the Administrative Agent and, furthermore, provide confirmation to the Administrative Agent that such substantial change in structure, type or performance characteristics of any of the Collateral Vessels shall not result in a breach of any covenant under this Agreement; provided, however, that this Section 5.16(e) shall not apply to (i) modifications of any Collateral Vessel with respect to ballast water treatment systems, bulbous bows, and scrubbers provided that there is no reduction in the value of such Collateral Vessel, and (ii) mandatory modifications to any Collateral Vessel required by Applicable Law from time to time;

(f) maintain a safe sustainable and socially responsible policy with respect to dismantling of the Collateral Vessels;

(g) ensure that any Collateral Vessel controlled by it or sold to an intermediary with the intention of being scrapped prior to the Discharge of Secured Obligations, is recycled at a recycling yard which conducts its recycling business in a socially and environmentally responsible manner, in accordance with the provisions of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 (the “Hong Kong Convention”) and/or Regulation (EU) No 1257/2013 of the European Parliament and of the Council of 20 November 2013 on ship recycling and amending Regulation (EC) No 1013/2006 and Directive 2009/16/EC, as applicable; and

 

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(h) procure, with effect from the earlier of (i) December 31, 2020 and (ii) the date the Hong Kong Convention comes into force, obtain an Inventory of Hazardous Material in respect of the Collateral Vessel owned by it which shall be maintained until the Discharge of Secured Obligations. For the purposes of this clause, “Inventory of Hazardous Material” means a statement of compliance issued by the relevant Classification Society which includes a list of any and all materials known to be potentially hazardous present in a Collateral Vessel’s structure and equipment, also referred to as “List of Hazardous Materials” or “Green Passport”.

SECTION 5.17 Lawful and safe operation. Each Obligor will, and will procure that the Manager will:

(a) operate each Collateral Vessel and cause each Collateral Vessel to be operated in a manner consistent in all material respects with any and all laws, regulations, treaties and conventions (and all rules and regulations issued thereunder) from time to time applicable to that Collateral Vessel;

(b) not cause or permit any of the Collateral Vessels to trade with, or within the territorial waters of any country in which her safety could reasonably be expected to be imperiled by exposure to piracy, terrorism, arrest, requisition, confiscation, forfeiture, seizure, destruction or condemnation as prize;

(c) not cause or permit any of the Collateral Vessels to be employed in any manner which will or may give rise to any reasonable degree of likelihood that such Collateral Vessel would be liable to requisition, confiscation, forfeiture, seizure, destruction or condemnation as prize;

(d) not cause or permit any of the Collateral Vessels to be employed in any trade or business which is forbidden by international law or is illicit or in knowingly carrying illicit or prohibited goods;

(e) in the event of hostilities in any part of the world (whether war be declared or not) not cause or permit any of the Collateral Vessels to be employed in carrying any contraband goods and that she does not trade in any zone after it has been declared a war zone by any authority or by any of that Collateral Vessel’s war risks Insurers unless that Collateral Vessel’s Insurers shall have confirmed to the Borrower that such Collateral Vessel is held covered under the Obligatory Insurances for the voyage(s) in question; and

(f) not charter any of the Collateral Vessels or permit any of the Collateral Vessels to serve under any contract of affreightment with any foreign country or national of any foreign country which would be contrary to Applicable Law or would render any Loan Document or the security conferred by the Security Documents unlawful.

SECTION 5.18 Repair of the Collateral Vessels. No Obligor will and each Obligor will procure that the Manager will not, put any of the Collateral Vessels into the possession of any person for the purpose of work being done upon her beyond the amount of US$5,000,000 (or equivalent), other than for classification or scheduled dry docking unless such person shall have given an undertaking to the Administrative Agent not to exercise any lien on that Collateral Vessel or Obligatory Insurances for the cost of that work or otherwise.

SECTION 5.19 Arrests and liabilities. Each Obligor will, and will procure that the Manager will, at all times:

 

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(a) pay and discharge all obligations and liabilities whatsoever which have given or may give rise to liens (other than Permitted Liens) on or claims enforceable against any of the Collateral Vessels and take all reasonable steps to prevent a threatened arrest of any of the Collateral Vessels;

(b) notify the Administrative Agent promptly in writing of the levy of either distress on any of the Collateral Vessels or her arrest, detention, seizure, condemnation as prize, compulsory acquisition or requisition for title or use and (save in the case of compulsory acquisition or requisition for title or use) obtain her release within thirty (30) days;

(c) pay and discharge when due all dues, taxes, assessments, governmental charges, fines and penalties lawfully imposed on or in respect of any of the Collateral Vessels or any Obligor except those which are being disputed in good faith by appropriate proceedings (and for the payment of which adequate reserves have been provided or are and continue to be available) and provided that the continued existence of such dues, taxes, assessments, governmental charges, fines or penalties does not give rise to any reasonable degree of likelihood that any of the Collateral Vessels would be liable to arrest, requisition, confiscation, forfeiture, seizure, destruction or condemnation as prize; and

(d) pay and discharge all other obligations and liabilities whatsoever in respect of any of the Collateral Vessels and the Obligatory Insurances except those which are being disputed in good faith by appropriate proceedings (and for the payment of which adequate reserves have been provided or are and continue to be available) and provided that the continued existence of those obligations and liabilities in respect of any of the Collateral Vessels and the Obligatory Insurances does not give rise to any reasonable degree of likelihood that such Collateral Vessel would be liable to arrest, requisition, confiscation, forfeiture, seizure, destruction or condemnation as prize and provided always that each Collateral Vessel remains properly managed and insured at all times in accordance with the terms of the Loan Documents.

SECTION 5.20 Environment. Each Obligor shall, and shall procure that the Manager shall, at all times:

(a) comply with all applicable Environmental Laws including, without limitation, requirements relating to the establishment of financial responsibility (and shall require that all Environmental Representatives of such Obligor comply with all applicable Environmental Laws and obtain and comply with all required Environmental Approvals, which Environmental Laws and Environmental Approvals relate to any of the Collateral Vessels or her operation or her carriage of cargo); and

(b) promptly upon the occurrence of any of the following events in relation to a Collateral Vessel, provide to the Administrative Agent a certificate of an officer of the Borrower or of the Borrower’s agents specifying in detail the nature of the event concerned:

(i) the receipt by the Borrower or any Environmental Representative (where the Borrower has knowledge of the receipt) of any Environmental Claim; or

(ii) any release of Hazardous Materials.

SECTION 5.21 Information regarding the Collateral Vessels. Each Obligor shall, and shall procure that the Manager shall, at all times:

(a) promptly notify the Administrative Agent of the occurrence of any accident, casualty or other event which has caused or resulted in or may cause or result in a Collateral Vessel being or becoming a Total Loss;

 

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(b) promptly notify the Administrative Agent of any material requirement or recommendation made by any insurer or Classification Society or by any competent authority which is not complied with in a timely manner;

(c) if requested by the Administrative Agent (not more than once in any calendar year), provide the Administrative Agent with a schedule setting out and all intended dry dockings of any of the Collateral Vessels;

(d) promptly notify the Administrative Agent of any Environmental Claim being made in connection with any of the Collateral Vessels or its operation;

(e) promptly notify the Administrative Agent of any claim for breach of the ISM Code being made in connection with any of the Collateral Vessels or its operation;

(f) promptly notify the Administrative Agent of any claim for breach of the ISPS Code being made in connection with any of the Collateral Vessels or its operation;

(g) give to the Administrative Agent from time to time on request such information, in sufficient copies (which may take the form of electronic copies) for all the Lenders, as the Administrative Agent may reasonably request regarding any of the Collateral Vessels, her employment, position and engagements;

(h) provide the Administrative Agent with copies of the classification certificate of the Collateral Vessels and of all periodic damage or survey reports on any of the Collateral Vessels which the Administrative Agent may reasonably request;

(i) promptly furnish the Administrative Agent with full information of any casualty or other accident or damage to any of the Collateral Vessels involving an amount in excess of US$1,500,000 (or equivalent);

(j) give to the Administrative Agent and its duly authorized representatives reasonable access to any of the Collateral Vessels for the purpose of conducting on board inspections and/or surveys of such Collateral Vessel provided that (i) the Administrative Agent shall co-operate with the Borrower in respect of the timing for and the place where such surveys take place in order to minimize disruption to the activities of such Collateral Vessel, and (ii) unless a Default has occurred and is continuing or such on board inspection and/or survey demonstrates that a Default is continuing, such inspections and/or surveys shall (x) not occur more than one time during any calendar year and (y) not take place at the expense of the Borrower; and

(k) if the Administrative Agent reasonably believes an Event of Default may have occurred and the Administrative Agent specifies such Event of Default, furnish to the Administrative Agent from time to time upon reasonable request certified copies of the ship’s log in respect of any of the Collateral Vessels.

SECTION 5.22 Provision of further information. Each Obligor shall, and shall procure that the Manager shall, as soon as practicable following receipt of a request by the Administrative Agent, provide the Administrative Agent, with sufficient copies for all the Lenders, with any additional or further financial or other information relating to any of the Collateral Vessels, the Obligatory Insurances or to any other matter relevant to, or to any provision of, a Loan Document which the Administrative Agent may reasonably request. The Borrower will furnish to the Administrative Agent and each Lender prompt written notice of any change in the information provided in the Beneficial Ownership Certification delivered to such Lender that would result in a change to the list of beneficial owners identified in such certification.

 

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SECTION 5.23 Management. Each Obligor shall, and shall procure that the Manager shall, ensure that at all times:

(a) the relevant Collateral Vessel is managed by the Manager; and

(b) no Manager shall terminate or materially vary (or agree to materially vary) the terms of its management.

There shall be no change in the Manager or appointment of an alternative manager unless such replacement or alternative manager is a Manager and the terms of its appointment are approved by the Administrative Agent, and, simultaneously with its appointment, the management agreement with such manager is assigned to the Security Trustee and the manager enters into a Manager’s Undertaking, each on substantially the same terms as applicable to the previous manager, and such other documents and evidence of the kind referred to in Section 4.01 and Section 4.02 in respect of the management arrangements are provided in respect of such replacement management arrangements.

SECTION 5.24 Charters. Each Vessel Owner shall be entitled to let its Collateral Vessels, pursuant to an Eligible Charter or other Charter, provided always that each Vessel Owner complies with the terms of this Agreement and the other Loan Documents (including the Concentration Limit Requirements) and:

(a) if a Vessel Owner enters into a Charter in respect of a Collateral Vessel, it promptly notifies the Administrative Agent thereof;

(b) such Vessel Owner shall either promptly obtain the consent (if required) of the Charterer to the assignment of that Charter pursuant to the General Assignment or ensure that the terms of such Charter permit assignment of that Charter without consent;

(c) such Vessel Owner serves a notice of assignment upon the Charterer pursuant to the terms of the General Assignment and, if such Vessel Owner is party to a Charter with a term that exceeds twelve (12) months (including any extension options) such Vessel Owner shall obtain an acknowledgement from the Charterer (and such Vessel Owner shall use reasonable endeavors to obtain such acknowledgement in a signed writing as opposed to by email, which shall otherwise be acceptable if such Charterer refuses to provide such acknowledgement in a signed writing);

(d) Vessel Owners may only enter into bareboat or demise charters with Eligible Bareboat Charterers, as such term is defined in Schedule 2.02, and, prior to entering into any such bareboat or demise charter, the Borrower shall procure that a Charterer’s Undertaking is provided by the applicable Charterer (unless, after using commercially reasonable efforts to procure such Charterer’s Undertaking, the Borrower is unable to reach agreement with the relevant Charterer for the provision of such Charterer’s Undertaking and the Administrative Agent consents to the foregoing). In addition, the Borrower shall procure that any such bareboat or demise charter includes an undertaking from the Charterer to the effect that such Charterer will not permit the use or operation of the applicable Collateral Vessel (i) in any country or territory that at such time is the subject of Sanctions, or (ii) in any other manner that will result in a violation by any Person, the Finance Parties or any other person participating in the Program Debt (whether as underwriter, advisor, investor or otherwise) of Sanctions;

(e) Vessel Owners shall procure the prior written consent of the Administrative Agent for any charter where more than six (6) months charterhire is paid in advance;

 

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(f) Vessel Owners shall procure the prior written consent of the Administrative Agent for any arrangement under which Earnings of any Collateral Vessel may be shared with anyone else; and

(g) Vessel Owners shall procure the prior written consent of the Administrative Agent for any charter with any Affiliate of the Guarantor or which is otherwise than on arm’s length terms.

SECTION 5.25 Termination of Eligible Charters. At all times until the Maturity Date, each Obligor shall advise the Administrative Agent of any of the following events:

(a) any breach (other than a technical breach which is cured promptly) by the relevant Charterer or the Vessel Owner of the terms of an Eligible Charter of which such Obligor becomes aware;

(b) the termination of an Eligible Charter by either the relevant Vessel Owner or the relevant Charterer; and

(c) as soon as it becomes aware of such event, the occurrence of an insolvency event of the nature referred to in Section 7.01(f), (g), (h) or (j) in respect of a Charterer.

SECTION 5.26 Scope of Obligatory Insurances. Each Vessel Owner will, or in the case of a Collateral Vessel subject to a Charter which is a demise or bareboat charter, shall procure that the Charterer of such Collateral Vessel will, in respect of each Collateral Vessel:

(a) at all times for a Collateral Vessel, keep that Collateral Vessel insured in the applicable Required Insurance Amount, in Dollars in the name of the relevant Vessel Owner or in the joint names of the Vessel Owner, the Charterer (if such Collateral Vessel is subject to a Charter which is a demise or bareboat charter), the Manager (except if such Collateral Vessel is subject to a Charter which is a demise or bareboat charter to a person not a member of the Guarantor Group), any crewing agents (except if the Collateral Vessel is subject to a Charter which is a demise or bareboat charter to a person not a member of the Guarantor Group) and (if the Administrative Agent so requires) the Security Trustee (provided that all such Persons, other than the Security Trustee, any third party crewing agents (outside the Guarantor Group) and, in respect of protection and indemnity liability insurances only, any crewing agents within the Guarantor Group, have provided an assignment of their interests in such insurances to the Security Trustee or, in the case of Collateral Vessels that are subject to a demise or bareboat charter, to the relevant Vessel Owner or the Security Trustee (provided further that in such cases, the terms of any assignment of insurances in favor of the relevant Vessel Owner shall expressly provide that the Vessel Owner shall assign its rights thereunder in favor of the Security Trustee, and the relevant Vessel Owner provides such onward assignment and assignment of its own interests in such insurances to the Security Trustee)) without the Administrative Agent or the Security Trustee being liable for but having the right to pay premiums, through brokers approved by the Administrative Agent against fire and usual marine risks (including hull and machinery and Excess Risks) with approved underwriters or insurance companies approved by the Administrative Agent and by policies in form and content approved by the Administrative Agent with a deductible which is a Required Deductible Amount or in an amount reasonably satisfactory to the Administrative Agent;

(b) at all times for a Collateral Vessel, keep that Collateral Vessel insured in the applicable Required Insurance Amount in the same manner as above against war risks (including risks of mines and all risks, whether or not regarded as war risks, London Blocking and Trapping Addendum and Lost Vessel clause, excepted by the free of capture and seizure clauses in the standard form of Lloyds marine policy) either:

 

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(i) with underwriters or insurance companies approved by the Administrative Agent and by policies in form and content approved by the Administrative Agent; or

(ii) by entering the relevant Collateral Vessel in an approved war risks association,

and for the avoidance of doubt, such war risks insurance will include protection and indemnity liability up to at least the applicable Required Insurance Amount, excluding any liability in respect of death, injury or damage to crew, and shall include a deductible which is a Required Deductible Amount or in an amount reasonably satisfactory to the Administrative Agent;

(c) at all times for a Collateral Vessel, keep that Collateral Vessel entered in respect of her full value and tonnage in an approved protection and indemnity association against all risks as are normally covered by such protection and indemnity association (including pollution risks and the proportion not recoverable in case of collision under the running down clause inserted in the ordinary Lloyds policies), such cover for pollution risks to be for:

(i) a minimum amount of US$1,000,000,000 or such other amount of cover against pollution risks as shall at any time be comprised in the basic entry of each Collateral Vessel with either a protection and indemnity association which is an acceptable member of either the International Group of protection and indemnity associations (or any successor organization designated by the Administrative Agent for this purpose) or the International Group (or such successor organization) itself; or

(ii) if the International Group or any such successor ceases to exist or ceases to provide or arrange any cover for pollution risks (or any supplemental cover for pollution risks over and above that afforded by the basic entry of each Collateral Vessel with its protection and indemnity association), such aggregate amount of cover against pollution risks as shall be available on the open market and by basic entry with a protection and indemnity association for ships of the same type, size, age and flag as each respective Collateral Vessel,

provided that, if any Collateral Vessel has ceased trading or is in lay up and in either case has unloaded all cargo, the level of pollution risks cover afforded by ordinary protection and indemnity cover available through a member of the International Group or such successor organization or, as the case may be, on the open market in such circumstances shall be sufficient for such purposes; and

(d) at all times for a Collateral Vessel, whenever any Collateral Vessel is trading to Japanese territorial waters and when so required by the Administrative Agent, maintain in full force and effect social responsibility insurance in respect of the Collateral Vessel with underwriters or insurance companies approved by the Administrative Agent and by policies in form and content approved by the Administrative Agent, provided always that a first class Vessel Owner or operator of vessels such as the Collateral Vessels would maintain and effect such social responsibility insurance.

SECTION 5.27 Obligatory Insurances. Without prejudice to its obligations under Section 5.26, each Vessel Owner will or, in the case of a Collateral Vessel subject to a Charter which is a demise or bareboat charter to a person who is not a member of the Guarantor Group, shall procure that the Charterer of such Collateral Vessel will:

(a) not without the prior consent of the Administrative Agent materially alter any Obligatory Insurance nor make, do, consent or agree to any act or omission which would or might render any Obligatory Insurance invalid, void, voidable or unenforceable or render any sum paid out under any Obligatory Insurance repayable in whole or in part;

 

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(b) not cause or permit any Collateral Vessel to be operated or traded in any way inconsistent with the provisions or warranties of, or implied in, or outside the cover provided by, or which would trigger the exclusion clause (or similar) under, any Obligatory Insurance or to be engaged in any voyage or to carry any cargo not permitted by any Obligatory Insurances without first covering the relevant Collateral Vessel in the relevant Required Insurance Amount and her freights for an amount approved by the Administrative Agent in Dollars or another approved currency with the Insurers;

(c) duly and punctually pay when due all premiums, calls, contributions or other sums of money from time to time payable in respect of any Obligatory Insurance;

(d) renew all Obligatory Insurances at least three (3) days before the relevant policies or contracts expire and procure that the approved brokers and/or war risks and protection and indemnity clubs and associations shall promptly confirm in writing to the Administrative Agent as and when each renewal is effected;

(e) forthwith upon the effecting of any Obligatory Insurance, give written notice of the insurance to the Administrative Agent stating the full particulars (including the dates and amounts) of the insurance, and on request produce the receipts for each sum paid by it pursuant to paragraph (c) above;

(f) not settle, release, compromise or abandon any claim in respect of any Total Loss unless the Administrative Agent is satisfied that such release, settlement, compromise or abandonment will not prejudice the interests of the Finance Parties under or in relation to any Loan Document;

(g) arrange for the execution and delivery of such guarantees as may from time to time be required by any protection and indemnity or war risks club or association;

(h) procure that the interest of the Security Trustee is noted on all policies of insurance;

(i) procure that a loss payee provision in the form scheduled to the Insurances Assignment is endorsed on all policies of insurance relating to the Collateral Vessels;

(j) obtain from the relevant insurance brokers and P&I Club letters of undertaking in the forms scheduled to the Insurances Assignments; and

(k) in the event that the Vessel Owner (or, where applicable, the relevant Charterer of a Collateral Vessel which is subject to a Charter which is a demise or bareboat charter to a person who is not a member of the Guarantor Group) receives payment of any moneys under the Insurance Assignment, save as provided in the loss payable clauses scheduled to the Insurance Assignment, forthwith pay over the same to the Security Trustee and, until paid over, such moneys (to the extent they are held by an Obligor) shall be held in trust for the Security Trustee.

SECTION 5.28 Power of Administrative Agent to insure. If the Obligors (or, where applicable, the relevant Charterer(s) of a Collateral Vessel which is subject to a Charter which is a demise or bareboat charter to a person who is not a member of the Guarantor Group) fail to effect and keep in force Obligatory Insurances in accordance with this Agreement, it shall be permissible, but not obligatory, for the Administrative Agent to effect and keep in force insurance or insurances in the amounts required under this Agreement and entries in a protection and indemnity association or club and, if it deems necessary or expedient, to insure the war risks upon any Collateral Vessel, and the Borrower will reimburse the Administrative Agent for the costs of so doing.

 

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SECTION 5.29 ISM Code. Each Vessel Owner shall, and shall procure that the Manager shall (or, in the case of a Collateral Vessel which is subject to a Charter which is a demise or bareboat charter to a person who is not a member of the Guarantor Group, shall procure that the Charterer of such Collateral Vessel shall):

(a) at all times be responsible for compliance by itself and by each Collateral Vessel with the ISM Code; and

(b) at all times ensure that:

(i) each Collateral Vessel has a valid Safety Management Certificate (as defined in the ISM Code);

(ii) each Collateral Vessel is subject to a safety management system (as defined in the ISM Code) which complies with the ISM Code; and

(iii) there is a valid Document of Compliance (as defined in the ISM Code), which is held on board the Collateral Vessel,

(c) and shall deliver to the Administrative Agent, a copy of a valid Safety Management Certificate and a valid Document of Compliance in respect of the relevant Collateral Vessel, in each case duly certified by an officer of the Borrower;

(d) promptly notify the Administrative Agent of any actual or, upon becoming aware of the same, threatened withdrawal of an applicable Safety Management Certificate or Document of Compliance;

(e) promptly notify the Administrative Agent of the identity of the person ashore designated for the purposes of paragraph 4 of the ISM Code and of any change in the identity of that person; and

(f) promptly upon becoming aware of the same notify the Administrative Agent of the occurrence of any material accident or major non-conformity (as defined in the ISM Code) requiring action under the ISM Code.

SECTION 5.30 ISPS Code. Each Obligor shall, and shall procure that the Manager shall or in the case of a Collateral Vessel subject to a Charter which is a demise or bareboat charter to a person who is not a member of the Guarantor Group, shall procure that the Charterer of such Collateral Vessel at all times shall:

(a) comply and be responsible for compliance by itself and by each Collateral Vessel with the ISPS Code; and

(b) ensure that:

(i) each Collateral Vessel has a valid International Ship Security Certificate;

(ii) each Collateral Vessel’s security system and its associated security equipment comply with section 19.1 of Part Appendix 1 of the ISPS Code;

 

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(iii) each Collateral Vessel’s security system and its associated security equipment comply in all respects with the applicable requirements of Chapter XI-2 of SOLAS and Appendix 1 of the ISPS Code; and

(iv) an approved ship security plan is in place.

SECTION 5.31 Dry Docking. The Guarantor shall ensure that each Obligor shall meet all of that Obligor’s obligations with respect to the cost of scheduled dry docking in relation to the Collateral Vessel owned by such Obligor and that such costs are paid when due except those costs which are being disputed in good faith by appropriate proceedings (and for the payment of which adequate reserves have been provided or are and continue to be available).

SECTION 5.32 Rating. If, following the Closing Date, the Obligors obtain a credit rating from a rating agency as required by any Program Debt, the Borrower shall, solely during the period for which such rating is required to be maintained by the applicable Program Debt, be required to maintain a rating with the relevant rating agency or any replacement rating agent selected by Borrower. For the avoidance of any doubt, the requirement to maintain a rating shall not be breached if the rating changes (upwards or downwards) and, if a rating is provided by a rating agency but, prior to its publication, the ratings process is withdrawn, the Borrower shall not be required to maintain such rating.

SECTION 5.33 Taxation.

(a) Each Obligor shall pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:

(i) such payment is being contested in good faith;

(ii) in each case to the extent required by GAAP, adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to the Administrative Agent under Section 5.01; and

(iii) such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse Effect.

(b) No Obligor (other than the Guarantor) may change its residence for Tax purposes except with the consent of the Administrative Agent, such consent not to be unreasonably withheld.

SECTION 5.34 Decarbonization Certificates

(a) The Borrower must supply to, or procure the supply to, the Administrative Agent on or before 10 Business Days prior to each Delta Test Date, in sufficient copies (which may take the form of an electronic copy) for the Lead Sustainability Coordinator and all Lenders:

(i) all Compliance Data in support of the Decarbonization Certificate to be delivered on the next in time Delta Test Date and such other information required by the Lead Sustainability Coordinator (requested by the Administrative Agent if so directed by or on behalf of the Lead Sustainability Coordinator) in order to populate the Draft DC (defined below) in accordance with sub-section 5.34(b), provided that where such Collateral Vessel is subject to a bareboat or demise charter with an Eligible Bareboat Charterer, the Borrower shall use reasonable efforts to obtain such Compliance Data from that Eligible Bareboat Charterer. Where the Borrower is unable to procure such Compliance Data after reasonable efforts, the Lead Sustainability Coordinator shall have reference to corresponding reasonable estimates for the applicable Delta Test Period obtained from a Classification Society at the Borrower’s cost, in place of any unavailable “Compliance Data” when calculating the AER and/or the Collateral Vessel Delta on the relevant Delta Test Date; and

 

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(ii) the relevant extracts of the provisions of any Qualifying Charter Contract including a Sustainability Linked Charter Mechanism, certified by a Responsible Officer of the Borrower,

provided always that none of the Lenders shall publicly disclose such information delivered under this Section 5.34(a) with the identity of the relevant vessel without the prior written consent of the Borrower. For the avoidance of doubt, such information shall be “Confidential Information” for the purposes of Section 9.12 (Treatment of Certain Information; Confidentiality) but the Borrower acknowledges that, in accordance with the Poseidon Principles, such information will form part of the information published regarding each relevant Lender’s portfolio climate alignment,

and provided further that if the Borrower fails to comply with the conditions set out in, or deliver when due any of the documents and/or items contemplated by, this Section 5.34, then no Default or Event of Default will result therefrom, and the only consequence shall be a pricing adjustment (if applicable) to the Margin as otherwise contemplated by this Agreement.

(b) Within 5 Business Days of receipt of the Compliance Data and any other information to be provided in accordance with Section 5.34(a) above, the Lead Sustainability Coordinator shall send to the Borrower, with a copy to the Administrative Agent, a draft (which may be in electronic form), of the populated Decarbonization Certificate to be delivered by the Borrower for the applicable Delta Test Period, on the next in time Delta Test Date ( “Draft DC”).

(c) Subject to any revisions and/or amendments to the Draft DC prepared by Lead Sustainability Coordinator pursuant to Section 5.34(b) above being prior agreed in writing between the Administrative Agent, the Lead Sustainability Coordinator and the Borrower (the “Amended Draft DC”), on or before 2 Business Days before such next in time Delta Test Date, the Borrower must supply to, or procure the supply to, the Administrative Agent in sufficient copies (which may take the form of an electronic copy) for the Lead Sustainability Coordinator and all Lenders, a completed Decarbonization Certificate for the applicable Delta Test Period, in a form reflective of either the Draft DC or Amended Draft DC, as applicable, and which is signed by a Responsible Officer of the Borrower.

(d) Notwithstanding anything in this Agreement to the contrary, the Lead Sustainability Coordinator shall not:

(i) have any duty to verify and/or confirm the accuracy of any information, calculations and/or other details (including but not limited to any Compliance Data provided to it in accordance with this Section 5.34) included and/or reflected in any Draft DC, Amended Draft DC and/or Decarbonization Certificate; and

(ii) shall not be liable to the Borrower or any other party for:

(A) any inaccuracies or errors in such information, calculations and/or other details (including but not limited to transposing any Compliance Data provided to it in accordance with this Section 5.34) included and/or reflected in any Draft DC, Amended Draft DC and/or Decarbonization Certificate; and/or

 

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(B) any failure to deliver, or delay in delivering, a Draft DC to and/or any failure to agree, or delay in agreeing an Amended DC with, the Borrower and the Administrative Agent in accordance with this Section 5.34, if such failure and/or delay in delivering any Draft DC and/or agreeing any Amended DC, arises as a result of, or in connection with, the Borrower’s (x) failure to deliver and/or delay in delivering, any Compliance Data and/or other information required by the Lead Sustainability Coordinator and/or a Decarbonization Certificate, and/or (y) failure to agree, or delay in agreeing, any Amended DC, in each case in accordance with the terms of this Section 5.34,

and the Borrower hereby confirms and acknowledges for the benefit of the Lead Sustainability Coordinator, that notwithstanding any of the provisions of this Agreement, the contents of any Decarbonization Certificate, signed by a Responsible Officer of the Borrower and delivered in accordance with this Section 5.34, shall be verified by the Borrower only, and shall be true and accurate in all material respects.

ARTICLE VI

NEGATIVE COVENANTS

Until the Commitments have expired or been terminated and all Obligations have been paid in full, the Borrower covenants and agrees with the Lenders that:

SECTION 6.01 Security Interests. Each Obligor shall not, and each Obligor shall procure that the Manager does not, create or permit to subsist any Security Interest over the Obligatory Insurances or any other Security Assets or any Related Contract other than:

(a) Permitted Liens; or

(b) with the prior written consent of the Administrative Agent.

SECTION 6.02 Mergers. No Obligor (other than the Guarantor) shall enter into any amalgamation, demerger, merger or corporate reconstruction (other than intercompany mergers and amalgamations which would not otherwise lead to a contravention of this Agreement or any other Loan Document).

SECTION 6.03 Special Purpose Covenants. Unless otherwise stated, references to “Obligor” in this Section 6.03 shall be deemed, for this Section only, to exclude the Guarantor:

(a) No Obligor shall have any employees.

(b) No Obligor shall enter into any contract or agreement with any Person, or conduct any business, or otherwise create or incur any liability to any Person, other than in connection with the acquisition, chartering and disposition of the Security Assets, the making of Loans or otherwise as permitted by the Loan Documents and activities ancillary thereto.

(c) No Obligor shall incur any Indebtedness other than (i) Indebtedness normally associated with the day to day operation of the Collateral Vessels, or otherwise in the normal course of business, (ii) Indebtedness under the Related Contracts and the Loan Documents, (iii) Indebtedness under Intra Group Loans.

(d) No Obligor (other than the Guarantor) shall principally engage in any business other than the direct or indirect ownership, operation and chartering of container vessels and any business incidental or related thereto. The Guarantor shall not principally engage in any business other than the direct or indirect ownership, operation and chartering of seagoing vessels and any business incidental or related thereto.

 

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(e) No Obligor shall own, or otherwise have title to, any deposit account or securities account other than the Charged Accounts.

(f) No Obligor shall create or own any Subsidiary except, in the case of the Borrower, any Vessel Owner.

(g) No Obligor shall be party to any Intra Group Loan Agreement unless the lender under such Intra Group Loan Agreement has fully subordinated its rights thereunder and provided certain other undertakings in accordance with Section 5.02 of the Intercreditor Agreement and, in no circumstances, shall the maturity date in respect of any such Intra Group Loan occur on or prior to the Maturity Date.

SECTION 6.04 Payment of dividends. No Obligor shall pay any dividends or make any other distributions (whether by loan or otherwise) to shareholders unless, (a) under Applicable Law and accounting principles in its jurisdiction of incorporation, it is entitled to pay such dividends or make such other distribution, and (b) no Default has occurred and is continuing.

SECTION 6.05 Vessel Substitutions. A Vessel Owner may not substitute a Collateral Vessel with one or more vessels (each a “Substitute Vessel”) unless such vessel substitution is completed subject to and in accordance with the following conditions:

(a) the Borrower provides notice thereof at least five (5) Business Days prior to the date that it wishes the Substitute Vessel to become a Collateral Vessel and the existing Collateral Vessel to be released as a Collateral Vessel;

(b) each Substitute Vessel satisfies the requirements for being a Collateral Vessel hereunder and, on the date on which it becomes a Collateral Vessel, the Administrative Agent shall receive all conditions precedent it would be entitled to receive under Article IV in form and substance satisfactory to the Administrative Agent;

(c) the Borrower provides a Compliance Certificate evidencing such substitution will not give rise to a Default, a Concentration Limit Event, a breach of the Guarantor Financial Covenants, a BB Event or a DSCR Cash Sweep Event, assuming for the purposes of the calculation of such requirements that the substitution had taken place, and no such event shall be continuing; and

(d) such Substitute Vessel shall become a Collateral Vessel on the same date as the existing Collateral Vessel ceases to be a Collateral Vessel for the purposes of the Loan Documents.

SECTION 6.06 Vessel Dispositions and Removals. A Vessel Owner may not sell or dispose of a Collateral Vessel (a “Vessel Disposition”) unless the Vessel Disposition is completed subject to and in accordance with the following conditions:

(a) the Administrative Agent shall have received five (5) Business Days’ prior written notice (a “Disposition Notice”) of any such Vessel Disposition from the Borrower, and such Disposition Notice shall specify the proposed date of the Vessel Disposition, the relevant Collateral Vessel subject of the Vessel Disposition, the proposed buyer, the purchase price, levels of cash deposit and/or letter of credit provided by or on behalf of the proposed buyer and the anticipated Net Sale Proceeds (it being acknowledged that such information may change);

 

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(b) such Vessel Disposition shall not be permitted if, after giving effect to the application of the proceeds thereof, a Default, Concentration Limit Event, breach of the Guarantor Financial Covenants, BB Event or DSCR Cash Sweep Event would occur;

(c) such Vessel Disposition shall not be permitted at any time when a Default, a Concentration Limit Event, a breach of the Guarantor Financial Covenants, a BB Event or a DSCR Cash Sweep Event is continuing, unless such Vessel Disposition or the application of the proceeds thereof would cure such Default, Concentration Limit Event, breach of the Guarantor Financial Covenants, BB Event or DSCR Cash Sweep Event, as applicable; and

(d) the Administrative Agent shall have received no later than three (3) Business Days prior to the date of such Vessel Disposition a written confirmation from the Borrower:

(i) confirming that such Vessel Disposition is proceeding;

(ii) confirming the date on which such Vessel Disposition is scheduled to be completed (it being acknowledged that such date may change);

(iii) incorporating a representation and warranty from the Borrower in connection with the matters referred to in subsections (b), (c) and (d) above and certifying the BB Ratio and DSCR Ratio following such Vessel Disposition (including the supporting calculations).

In addition, a Vessel Owner may from time to time designate any Collateral Vessel to cease to be a Collateral Vessel, and thereby cause such Vessel to cease to be subject to the terms and conditions of this Agreement, so long as the Vessel Owner would be permitted pursuant to the above provisions to sell or dispose of such Collateral Vessel in circumstances where the proceeds thereof are zero, assuming that all references to any disposition of such Collateral Vessel pursuant to the above provisions referred instead to its removal as a Collateral Vessel.

SECTION 6.07 Year end. No Obligor shall change its financial year end except with prior notice to the Administrative Agent and, in the case of any Obligor other than the Guarantor, prior consent of the Administrative Agent (not to be unreasonably withheld or delayed).

SECTION 6.08 Related Contracts. Subject to Obligors’ right to release, substitute and dispose of Collateral Vessels, no Obligor shall take any action, enter into any document or agreement or omit to take any action or to enter into any document or agreement which would, or could reasonably be expected to, cause any Obligatory Insurances or Management Agreement to cease to remain in full force and effect and shall use commercially reasonable efforts to procure that each other party to such Related Contract does not take any action, enter into any document or agreement or omit to take any action or to enter into any document or agreement which would, or could reasonably be expected to, cause such Related Contract to cease to remain in full force and effect.

SECTION 6.09 Financial Covenants.

(a) Borrowing Base Ratio. If on any BB Test Date it is determined that a BB Event has occurred and is continuing, the Borrower shall, on the next Payment Date, prepay the Loan in accordance with Section 4.02(a)(viii) of the Intercreditor Agreement; provided that the Borrower shall be permitted to deposit or pledge Additional Security pursuant to Section 6.10 in an amount sufficient to ensure that a BB Event is not continuing after giving effect to such pledge or deposit.

 

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(b) Debt Service Coverage Ratio. On any Test Date a DSCR Cash Sweep Event shall occur if the DSCR Ratio is less than 1.25:1.

(c) Consolidated Tangible Net Worth. The Guarantor must ensure that its Consolidated Tangible Net Worth always equals or exceeds four hundred and fifty million Dollars ($450,000,000).

(d) Gearing. The Guarantor must ensure that its Total Borrowings are always less than 65% of its Total Assets.

(e) Interest and Principal Coverage Ratio. The Guarantor must ensure that its Interest and Principal Coverage Ratio is always greater than or equal to 1.1:1.

(f) Guarantor Cross Default. The Guarantor must ensure its Indebtedness is paid when due (having due regard to any applicable grace period), provided that it shall not be a breach of this subsection if the Guarantor fails to pay its Indebtedness when due but the aggregate amount of such Indebtedness is less than $50,000,000 or its equivalent.

Each of the Guarantor Financial Covenants set forth in Sections 6.09(c) to (f) (inclusive) above shall be tested on each Determination Date by reference to each rolling twelve (12) month Measurement Period, and compliance shall be evidenced in the Compliance Certificates.

SECTION 6.10 Creation of Additional Security. The value of any additional security which the Borrower offers to provide pursuant to Section 6.09(a) will only be taken into account for the purposes of determining the BB Ratio if and when:

(a) that additional security, its value and the method of its valuation have been approved by the Administrative Agent (and, where required, the holders of any Additional Secured Debt), provided that (i) cash and (ii) any vessel which could be a Substitute Vessel (by meeting the criteria set forth in Section 6.05 and said conditions are met (other than, for the avoidance of doubt, the removal of any Collateral Vessel)), shall be approved additional security;

(b) a Security Interest over that security has been constituted in favor of the Security Trustee in an approved form and manner;

(c) the Loan Documents have been unconditionally amended in such a manner as the Administrative Agent and Borrower reasonably agree in consequence of that additional security being provided; and

(d) the Administrative Agent, or its duly authorized representative, has received such documents and evidence it may reasonably require in relation to that amendment and additional security including documents and evidence of the type referred to in Article IV in relation to that amendment and additional security and its execution and (if applicable) registration.

SECTION 6.11 No amendment to Related Contracts. No Obligor shall amend or agree to any material amendment to the Obligatory Insurances or the Management Agreements without the prior written consent of the Administrative Agent.

SECTION 6.12 Anti-corruption law. (a) Each Obligor and its Subsidiaries shall conduct their business in compliance with Anti-Corruption Laws; and (b) Each Obligor shall ensure that no proceeds of the Program Debt will be applied in a manner or for a purpose prohibited by Anti-Corruption Laws.

 

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SECTION 6.13 Sanctions. (a) Each Obligor shall ensure that no proceeds of the Program Debt will be made available, directly or indirectly, to or for the benefit of, or used to fund any activities with or business of a Sanctioned Person, or in any country territory that, at the time of such funding, is the subject of Sanctions, or otherwise applied in a manner or for a purpose prohibited by Sanctions or Anti-Corruption Laws, or which would result in a violation of Sanctions by any person (including any person participating in the Program Debt, whether as underwriter, advisor, investor, lender, hedge provider, facility or security agent or otherwise); (b) each Obligor and its Subsidiaries shall remain in compliance with all Sanctions and shall implement a policy for Sanctions in line with the requirements in this Agreement; (c) no Obligor nor their respective Subsidiaries shall fund all or part of any repayment required to be made pursuant to Program Debt out of proceeds directly or indirectly derived from any business, activities or transactions which would be prohibited by Sanctions or which would otherwise cause any Person or a Lender to be in breach of Sanctions or to otherwise become the subject or target of Sanctions; (d) no Obligor nor their respective Subsidiaries shall (and shall procure that no Charterer of any Collateral Vessel will) operate, possess, use, dispose of or otherwise deal with, or procure or allow the ownership, operation, possession, use, disposal of or any other dealing with, each Collateral Vessel or part thereof for any purpose or to any person which would violate or cause any Finance Party to violate, when and as applicable, any Sanctions, any anti-terrorism law or any anti-corruption law in each case applicable to it; and (e) no Obligor will permit the use or operation of any Collateral Vessel (i) in any country or territory that at such time is the subject of Sanctions, (ii) by a Sanctioned Person, or (iii) in any other manner that will result in a violation by any Person, the Finance Parties or any other person participating in the Program Debt (whether as underwriter, advisor, investor or otherwise) of Sanctions.

SECTION 6.14 Additional Secured Debt. Each Obligor shall ensure that the terms of any Program Debt Documents (or amendments thereto and restatements thereof) entered into after the date hereof (other than terms related to interest rates and fees), shall (i) not be on more beneficial terms to the relevant Secured Parties thereunder than the terms of the Loan Documents are to the Finance Parties, and (ii) if such Additional Secured Debt shall be of the same facility or debt instrument type as the Obligations arising hereunder, not amortize more quickly, or have a shorter term, than the Obligations (unless prior to the effectiveness of such Program Debt Document or its amendment and/or restatement, such amendments are made to the Loan Documents to ensure the terms of the Loan Documents are at least as favorable as the terms of the relevant Program Debt Documents).

ARTICLE VII

EVENTS OF DEFAULT

SECTION 7.01 Events of Default. If any of the following events (each, an “Event of Default”) shall occur:

(a) any Obligor shall fail to pay any amount payable by it under the Loan Documents in the manner required under the Loan Documents, unless the non-payment is remedied within three Business Days of the due date;

(b) an Obligor shall fail to comply with any term of Sections 3.22, 5.26, 5.27(a), (b), (c) and (f), 6.01, 6.03, 6.09(c) to (e), 6.12 and 6.13;

(c) an Obligor shall fail to comply with any other term of the Loan Documents not already referred to in Section 7.01(b) above (excluding Section 5.34), unless the non-compliance: (i) is capable of remedy; and (ii) is remedied within thirty (30) days (or, in the case of Section 5.06(a), three (3) Business Days) of the earlier of (i) the date on which written notice of such failure is delivered to Guarantor and (ii) any Obligor having knowledge of such failure to comply;

 

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(d) a representation made or repeated by an Obligor in any Loan Document or in any document delivered by or on behalf of the Obligor under any Loan Document is incorrect in any material respect when made or deemed to be repeated, unless the circumstances giving rise to the misrepresentation: (i) are capable of remedy; and (ii) are remedied within thirty (30) days of the earlier of (i) the date on which written notice of such misrepresentation is delivered to Guarantor and (ii) any Obligor having knowledge of such misrepresentation;

(e) a BB Event shall occur and continue uncured for more than six (6) months;

(f) any of the following occurs in respect of an Obligor: (i) any of its Indebtedness is not paid when due (after the expiry of any originally applicable grace period); (ii) any of its Indebtedness: (A) becomes prematurely due and payable; or (B) is placed on demand; or (C) is capable of being declared by a creditor to be prematurely due and payable or being placed on demand, in each case, as a result of an event of default (howsoever described) and after the expiry of any applicable grace period; or (iii) any commitment for its Indebtedness is cancelled or suspended as a result of an event of default (howsoever described), unless, in the case of the Guarantor, the aggregate amount of Indebtedness falling within (i) to (iii) above is less than US$50,000,000 or its equivalent;

(g) any of the following occurs in respect of an Obligor: (i) it is deemed for the purposes of any Applicable Law to be, unable to pay its debts as they fall due or insolvent; (ii) it admits its inability to pay its debts as they fall due; (iii) it suspends making payments on any of its debts or announces an intention to do so; or (iv) a moratorium is declared in respect of any of its indebtedness, provided that if a moratorium occurs in respect of an Obligor, the ending of the moratorium will not remedy any Event of Default caused by the moratorium;

(h) any of the following occurs in respect of an Obligor: (i) any step is taken with a view to a moratorium, a composition, assignment or similar arrangement with any of its creditors; (ii) a meeting of its shareholders, directors or other officers is convened for the purpose of considering any resolution to petition for or to file documents with a court for its winding-up, administration or dissolution or any such resolution is passed; (iii) any person presents a petition, or files documents with a court for its winding-up, administration or dissolution; (iv) an order for its winding-up, administration or dissolution is made; (v) any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, receiver and manager, administrative receiver, administrator or similar officer is appointed in respect of it or any of its assets; (vi) its directors, shareholders or other officers request the appointment of or give notice of their intention to appoint a liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, receiver and manager, administrative receiver, administrator or similar officer; or (vii) any other analogous step or procedure is taken or appointment is made in any jurisdiction, provided that subsections (i) to (vii) above shall not apply to a frivolous or vexatious petition for winding-up presented by a creditor in respect of an Obligor which is being contested in good faith and with due diligence and is discharged or struck out within, in the case of an Obligor (other than Guarantor), thirty (30) days or, in the case of the Guarantor, sixty (60) days;

(i) any attachment, sequestration, distress, execution, enforcement action or analogous event affects any asset(s) of the Obligors and, in relation to the Guarantor only, the same is not discharged or stayed pending appeal within sixty (60) days;

 

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(j) an Obligor suspends, ceases, or threatens to suspend, cease, to carry on all or, in the case of the Guarantor, a material portion of its business, provided that lay-up of a Collateral Vessel or other action in the ordinary course of business shall not constitute a suspension of business by a Vessel Owner for these purposes;

(k) (i) an Obligor (other than Guarantor) fails to comply with or pay any sum due from it under any final judgment or any final order made or given by any court of competent jurisdiction in a non-appealable judgment or order with respect to which the amount in controversy exceeds $25,000 or (ii) Guarantor fails to comply with or pay any sum due from it under any final judgment or any final order made or given by any court of competent jurisdiction in a non-appealable judgment or order with respect to which the amount in controversy exceeds $50,000,000;

(l) the Borrower ceases to be a direct wholly owned Subsidiary of the Guarantor;

(m) any Obligor (other than the Borrower or the Guarantor) ceases to be a wholly owned subsidiary of the Borrower, except in connection with a permitted disposal of a Collateral Vessel in accordance with the Loan Documents;

(n) it is or becomes unlawful for an Obligor to perform any of its material obligations under the Loan Documents or any Related Contract as a result of the act or inaction of an Obligor; or any material provision of a Loan Document is not effective or is alleged by the Borrower to be ineffective for any reason; or any material provision of a Loan Document is not effective or is alleged by any Party (other than a Finance Party, the Borrower or the Account Bank) to be ineffective for any reason; or an Obligor repudiates any material provision of a Loan Document or evidences an intention to repudiate any material provision of a Loan Document; or any Party (other than a Finance Party or the Account Bank) repudiates or rescinds any material provision of a Loan Document or evidences an intention to repudiate or rescind any material provision of a Loan Document;

(o) any of the Security Documents ceases to be valid in any material respect or any of those Security Documents creating a Security Interest in favor of the Security Trustee ceases to provide a perfected first priority security interest in favor of the Security Trustee as a result of the act or inaction of an Obligor, provided that no Event of Default shall occur under this provision (i) if (A) the applicable Security Documents relate to certain Collateral Vessels only and the Asset Values of such Collateral Vessels account for no more than seven point five per cent. (7.5%) of the aggregate Asset Values of all Collateral Vessels, and (B) the Borrower remedies such circumstances within 10 days (and during such period the Borrower is diligently taking action to remedy such circumstances), or (ii) if, on the date any Security Document to which a Collateral Vessel or the applicable Vessel Owner is subject ceases to be valid in any material respect or any Security Document creating a Security Interest in such Collateral Vessel or the applicable Vessel Owner in favor of the Security Trustee ceases to provide a perfected first priority security interest in favor of the Security Trustee in such Collateral Vessel or the applicable Vessel Owner, such Collateral Vessel is subject to a Vessel Disposition or otherwise ceases to be a Collateral Vessel under and in accordance with the provisions of Sections 6.05 or 6.06;

(p) [Reserved];

(q) the registration of any Collateral Vessel at the registry of any Approved Flag State is cancelled or any Collateral Vessel is arrested or otherwise detained and such Collateral Vessel is not released within thirty (30) days, provided that no Event of Default shall occur under

 

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this provision (i) if (A) the applicable circumstances relate to certain Collateral Vessels only and the Asset Values of such Collateral Vessels account for no more than ten per cent. (10%) of the aggregate Asset Values of all Collateral Vessels, and (B) the Borrower remedies such circumstances within 10 days (and during such period the Borrower is diligently taking action to remedy such circumstances), which period shall, in the case of any arrest or detention be in addition to the thirty (30) day period above, or (ii) if, on the date of the applicable cancellation in the case of any cancellation of the registration of any Collateral Vessel at the registry of any Approved Flag State or prior to the expiry of the thirty (30) day in the case of arrest or detention of a Collateral Vessel, such Collateral Vessel is subject to a Vessel Disposition or otherwise ceases to be a Collateral Vessel under and in accordance with the provisions of Sections 6.05 or 6.06;

(r) any Obligor, or anyone acting through an Obligor, makes any withdrawal from, or instructs an Account Bank to make any payment from, any Charged Account, other than in accordance with article IV of the Intercreditor Agreement;

(s) any other event or circumstance occurs which gives rise to a Material Adverse Effect;

then, and in every such event (other than an event with respect to the Borrower described in clause (g) or (h) of this Section), and at any time thereafter during the continuance of such event, the Administrative Agent may (but without any obligation to do so), and at the request of the Required Lenders shall, by notice to the Borrower, take any or all of the following actions, at the same or different times:

(i) terminate the Commitments, and thereupon the Commitments shall terminate immediately;

(ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other Obligations of the Borrower accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower;

(iii) [reserved]; and

(iv) exercise on behalf of itself, the Lenders all rights and remedies available to it, the Lenders under the Loan Documents and/or in respect of the Security Assets;

provided that, in case of any event with respect to the Borrower described in clause (g) or (h) of this Section, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other Obligations accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

 

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ARTICLE VIII

AGENCY

SECTION 8.01 Appointment and Authority. Each of the Lenders hereby irrevocably appoints the Administrative Agent to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The Administrative Agent shall, unless a contrary indication appears in a Loan Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Administrative Agent in accordance with any instructions given to it by (a) all Lenders or the relevant proportion of the Lenders if the relevant Loan Document stipulates the matter is, as applicable, an all Lender decision or a decision requiring some specified proportion of the Lenders and (b) in all other cases, the Required Lenders. Except as otherwise provided in Section 8.06(b), the provisions of this Article are solely for the benefit of the Administrative Agent and the Lenders, and the Borrower shall not have rights as a third-party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan Document (or any other similar term) with reference to the Administrative Agent 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.

SECTION 8.02 Rights as a Lender. The Person serving as the Administrative Agent hereunder shall, if applicable, have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity, if applicable. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for, and generally engage in any kind of business with, the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

SECTION 8.03 Exculpatory Provisions.

(a) The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent:

(i) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(ii) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or Applicable Law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and

(iii) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

 

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(b) The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 8.01 and 9.02), or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent in writing by the Borrower or a Lender.

(c) The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

(d) If a payment is made by the Administrative Agent (or its Affiliates) in error or if a Lender or another recipient of funds is not otherwise entitled to receive such funds, then such Lender or recipient shall promptly following demand, but in any event not later than two Business Days following such demand, repay to the Administrative Agent the portion of such payment that was made in error (or otherwise not intended to be received) in same day funds, together with interest thereon in respect of each day from and including the date such amount was made available by the Administrative Agent (or its Affiliate) to such Lender or recipient to the date such amount is repaid to the Administrative Agent in same day funds at the applicable overnight rate from time to time in effect. Each Lender and other party hereto waives the discharge for value defense in respect of any such payment.

SECTION 8.04 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan that by its terms must be fulfilled to the satisfaction of a Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender unless the Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Loan. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

SECTION 8.05 Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

 

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SECTION 8.06 Resignation of Administrative Agent.

(a) The Administrative Agent may at any time give notice of its resignation to the Lenders and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in New York, New York, or an Affiliate of any such bank with an office in New York, New York. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall not be obligated to), on behalf of the Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that in no event shall any such successor Administrative Agent be a Defaulting Lender. Whether or not a successor Administrative Agent has been appointed, such resignation of such retiring Administrative Agent shall become effective in accordance with such notice on the Resignation Effective Date.

(b) With effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (i) the retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents and (ii) except for any indemnity payments owed to the retiring or removed Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender directly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring or removed Administrative Agent (other than any rights to indemnity payments owed to the retiring or removed Administrative Agent), and the retiring or removed Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring or removed Administrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Article and Section 9.03 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Administrative Agent was acting as Administrative Agent.

SECTION 8.07 Non-Reliance on Other Lenders. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Agent or Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

SECTION 8.08 No Other Duties. Anything herein to the contrary notwithstanding, the Structuring Agent, the Global Coordinator, the Mandated Lead Arrangers and the Co-Sustainability Coordinators, each listed on the cover page hereof, shall not have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent or a Lender hereunder.

 

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SECTION 8.09 Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to the Borrower, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Section 9.03) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Section 9.03.

SECTION 8.10 Intercreditor Agreement

Each of the Lenders and each Hedge Counterparty hereby instructs the Administrative Agent to enter into the Intercreditor Agreement and agrees, for the enforceable benefit of all holders of all existing and future Secured Obligations and each existing and future Secured Lien Representative, to each of the matters set out in paragraphs (1) to (3) of the definition of Lien Sharing and Priority Confirmation in the Intercreditor Agreement.

ARTICLE IX

MISCELLANEOUS

SECTION 9.01 Notices; Public Information.

(a) Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile or email as follows:

(i) if to the Borrower, to it at Unit 2, 16/F., W668 Building, Nos. 668 Castle Peak Road, Cheung Sha Wan, Kowloon, Hong Kong, China, Attention of Chief Financial Officer (Facsimile No. +852 3010 1868; Telephone No. +852 3588 9400; Email: gtalbot@atlascorporation.com and legal@seaspanltd.ca);

 

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(ii) if to the Guarantor, to it at Unit 2, 16/F., W668 Building, Nos. 668 Castle Peak Road, Cheung Sha Wan, Kowloon, Hong Kong, China, Attention of Chief Financial Officer (Facsimile No. +852 3010 1868; Telephone No. +852 3588 9400; Email: gtalbot@atlascorporation.com and legal@seaspanltd.ca);

(iii) if to the Administrative Agent, to Citibank, N.A. at Citibank Delaware, 1615 Brett Road, OPS III, New Castle, DE 19720, USA, Attention of Agency Operations (Facsimile No. +1 (646) 274-5080; Telephone No. +1 (302) 894-6010; Email: GlAgentOfficeOps@Citi.com);

(iv) [reserved]; and

(v) if to a Lender, to it at its address (or facsimile number or email address) set forth in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications, to the extent provided in paragraph (b) below, shall be effective as provided in said paragraph (b).

(b) Electronic Communications. Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communication (including e-mail, FpML, and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its e-mail address as described in the foregoing clause (i), of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.

(c) Change of Address, etc. Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto.

(d) Platform.

(i) The Borrower agrees that the Administrative Agent may, but shall not be obligated to, make the Communications (as defined below) available to the Lenders by posting the Communications on the Platform.

(ii) The Platform is provided “as is” and “as available.” The Agent Parties (as defined below) do not warrant the adequacy of the Platform and expressly disclaim liability for errors or omissions in the Communications. No warranty of any kind, express, implied or statutory, including any warranty of merchantability, fitness for a particular purpose, non-

 

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infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Communications or the Platform. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Borrower, any Lender or any other Person or entity for damages of any kind, including direct or indirect, special, incidental or consequential damages, losses or expenses (whether in tort, contract or otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of communications through the Platform. “Communications” means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of the Borrower pursuant to any Loan Document or the transactions contemplated therein that is distributed to the Administrative Agent or any Lender by means of electronic communications pursuant to this Section, including through the Platform.

(e) [Reserved]

SECTION 9.02 Waivers; Amendments.

(a) No Waiver; Remedies Cumulative; Enforcement. No failure or delay by the Administrative Agent or any Lender in exercising any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege, or any abandonment or discontinuance of steps to enforce such a right remedy, power or privilege, preclude any other or further exercise thereof or the exercise of any other right remedy, power or privilege. The rights, remedies, powers and privileges of the Administrative Agent and the Lenders hereunder and under the Loan Documents are cumulative and are not exclusive of any rights, remedies, powers or privileges that any such Person would otherwise have.

Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Obligors (and to direct instruct the Security Trustee in accordance with the Intercreditor Agreement) shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 8.01 for the benefit of all the Lenders; provided that the foregoing shall not prohibit (i) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (ii) [reserved], (iii) any Lender from exercising setoff rights in accordance with Section 9.08 (subject to the terms of Section 2.12) or (iv) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to the Borrower under any Debtor Relief Law; provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (x) the Required Lenders shall have the rights otherwise provided to the Administrative Agent pursuant to Section 8.01 and (y) in addition to the matters set forth in clauses (ii), (iii) and (iv) of the preceding proviso and subject to Section 2.12, any Lender may, with the consent of the Required Lenders, enforce any rights or remedies available to it and as authorized by the Required Lenders.

(b) Amendments, Etc. Except as otherwise expressly set forth in this Agreement, no amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower therefrom, shall be effective unless in writing executed by the Guarantor, the Borrower and the Required Lenders, and acknowledged by the Administrative Agent, or by the Guarantor, the Borrower and the Administrative Agent with the consent of the Required Lenders, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided that no such amendment, waiver or consent shall:

 

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(i) extend or increase any Commitment of any Lender without the written consent of such Lender (it being understood that a waiver of any condition precedent set forth in Article IV or the waiver of any Default shall not constitute an extension or increase of any Commitment of any Lender);

(ii) reduce the principal of, or rate of interest specified herein on, any Loan, or any fees or other amounts payable hereunder or under any other Loan Document, without the written consent of each Lender directly and adversely affected thereby (provided that only the consent of the Required Lenders shall be necessary (x) to amend the definition of “Default Rate” or to waive the obligation of the Borrower to pay interest at the Default Rate or (y) to amend any financial covenant (or any defined term directly or indirectly used therein), in each case even if the effect of such amendment would be to reduce the rate of interest on any Loan or other Obligation or to reduce any fee payable hereunder);

(iii) postpone any date scheduled for any payment of principal of, or interest on, any Loan, or any fees or other amounts payable hereunder or under any other Loan Document, or reduce the amount of, waive or excuse any such payment, without the written consent of each Lender directly and adversely affected thereby;

(iv) change Section 2.12 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender directly and adversely affected thereby;

(v) waive any condition set forth in Article IV without the written consent of, in the case of any condition set forth in Section 4.01, Section 4.02(h) and Section 4.04(e), each Lender and, in the case of any other condition set forth in Article IV, the consent of the Required Lenders but as if the reference in the definition of Required Lenders to “50%” referred to “662/3%”;

(vi) [reserved];

(vii) waive or amend any provision of Sections 3.22, 6.12 or 6.13 and any related sanctions definitions therein without the consent of each Lender; or

(viii) change any provision of this Section or the percentage in the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender;

provided, further, that no such amendment, waiver or consent shall amend, modify or otherwise affect the rights or duties hereunder or under any other Loan Document of (A) the Administrative Agent, unless in writing executed by the Administrative Agent, (B) [reserved], and (C) any Hedge Counterparty, unless in writing executed by such Hedge Counterparty, in each case in addition to the Borrower and the Lenders required above, provided that the consent of any Hedge Counterparty shall only be required in these circumstances if the applicable Hedge Counterparty or an Affiliate of that Hedge Counterparty is a Lender and if the applicable amendment, waiver or consent has the effect of (1) changing the position or priority of any Hedge Counterparty in the application of payments as set out in Section 4.02 of the Intercreditor; (2) changing the entitlement of any Hedge Counterparty to share in the Collateral and/or its interest therein; or (3) imposing an obligation on any Hedge Counterparty.

 

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Notwithstanding anything herein to the contrary, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent that by its terms requires the consent of all the Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders, except that (x) the Commitment of any Defaulting Lender may not be increased or extended, or the maturity of any of its Loan may not be extended, the rate of interest on any of its Loans may not be reduced and the principal amount of any of its Loans may not be forgiven, in each case without the consent of such Defaulting Lender and (y) any amendment, waiver or consent requiring the consent of all the Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than the other affected Lenders shall require the consent of such Defaulting Lender.

In addition, notwithstanding anything in this Section to the contrary, if the Administrative Agent and the Borrower shall have jointly identified an obvious error or any error or omission of a technical nature, in each case, in any provision of the Loan Documents, then the Administrative Agent and the Borrower shall be permitted to amend such provision, and, in each case, such amendment shall become effective without any further action or consent of any other party to any Loan Document if the same is not objected to in writing by the Required Lenders to the Administrative Agent within ten Business Days following receipt of notice thereof.

SECTION 9.03 Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Lenders, the Administrative Agent and their Affiliates (including the reasonable and documented fees, charges and disbursements of counsel for the Administrative Agent, where applicable, in accordance with previously agreed fee arrangements) in connection with the syndication of the Facilities, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents, or any amendments, modifications or waivers of the provisions hereof or thereof, including in connection with the implementation of a Benchmark Replacement and/or any Benchmark Replacement Conforming Changes pursuant to Section 2.16 (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) [reserved], and (iii) all out-of-pocket expenses incurred by the Administrative Agent or any Lender (including the documented fees, charges and disbursements of one counsel for the Administrative Agent and one additional counsel in any applicable local jurisdiction, one counsel for the Lenders as a whole (and one additional counsel in the event of an actual conflict of interest) and, in each case, such other counsel as may be agreed with the Borrower) in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans.

(b) Indemnification by the Borrower. The Borrower shall indemnify the Administrative Parties (and any sub-agent thereof), the Account Bank, each Lender, each Hedge Counterparty and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee) incurred by any Indemnitee or asserted against any Indemnitee by any Person (including the Borrower) arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, (iv) any costs associated with any Default hereunder or the enforcement of the Security Documents or acceleration of the Loans, or (v) any

 

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actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.

(c) Reimbursement by Lenders. To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under paragraph (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof) or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent) or such Related Party, as the case may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought based on each Lender’s Applicable Percentage at such time) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by such Lender); provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) in connection with such capacity.

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by Applicable Law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof. No Indemnitee referred to in paragraph (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

(e) Payments. All amounts due under this Section shall be payable not later than 10 days after demand therefor.

(f) Survival. Each party’s obligations under this Section shall survive the termination of the Loan Documents and payment of the obligations hereunder.

SECTION 9.04 Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither the Borrower nor the Guarantor may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender, and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of paragraph (b) of this Section, (ii) by way of participation in accordance with the provisions of paragraph (d) of this Section, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of paragraph (e) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in paragraph (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

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(b) Assignments by Lenders. Any Lender may at any time assign or transfer to any bank, financial institution, insurance company or a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in financing loans (an “Eligible Assignee”) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that the Administrative Agent shall have no duty or obligation at any time to determine if an entity constitutes an Eligible Assignee, and provided further that any such assignment shall be subject to the following conditions:

(i) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment assigned.

(ii) Required Consents. The consent of the Borrower (such consent not to be unreasonably withheld or delayed, and shall be deemed given if the Borrower has not rejected the proposed assignment within 10 Business Days of the Borrower’s receipt of written request for consent) shall be required unless the assignee is a Lender or an Affiliate of a Lender (so long as such Affiliate is engaged in making commercial loans or similar extensions of credit in the ordinary course of its business), or any Event of Default has occurred and is continuing at the time of assignment.

(iii) Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $5,000; provided that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

(iv) No Assignment to Certain Persons. No such assignment shall be made to (A) the Borrower or any of the Borrower’s Affiliates or Subsidiaries or (B) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute a Defaulting Lender or a Subsidiary thereof.

(v) Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent and each Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata share of all Loans in accordance with its Applicable Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under Applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

 

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Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 2.14 and 9.03 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this Section.

(c) Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices in New York, New York a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(d) Participations. Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural Person, or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural Person, or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the Borrower, the Administrative Agent and Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement, and (iv) such Lender retains the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement, provided that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in Section 9.02(b) which requires the consent of all Lenders. For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 9.03(b) with respect to any payments made by such Lender to its Participant(s).

The Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.13, 2.14 and 2.15 (subject to the requirements and limitations therein) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Section 2.18 as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under Section 2.14 or 2.15, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 2.18(b) with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender; provided that such Participant agrees to be subject to Section 2.12 as though it were a

 

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Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary 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 Loans or other obligations under the Loan Documents (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, letters of credit or its other obligations under any Loan Document) 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 Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(e) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

SECTION 9.05 Survival. All covenants, agreements, representations and warranties made by the Borrower herein and in any Loan Document or other documents delivered in connection herewith or therewith or pursuant hereto or thereto shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery hereof and thereof and the making of the Credit Extensions hereunder, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid and so long as the Commitments have not expired or been terminated. The provisions of Sections 2.13, 2.14, 9.03, 9.15 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the payment in full of the Obligations, the expiration or termination of the Commitments or the termination of this Agreement or any provision hereof.

SECTION 9.06 Counterparts; Integration; Effectiveness; Electronic Execution.

(a) Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents, and any separate letter agreements with respect to fees payable to the Administrative Agent, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (e.g., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement.

 

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(b) Electronic Execution of Assignments. The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any Applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

SECTION 9.07 Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this Section, if and to the extent that the enforceability of any provision of this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent then such provision shall be deemed to be in effect only to the extent not so limited.

SECTION 9.08 Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by Applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held, and other obligations (in whatever currency) at any time owing, by such Lender or any such Affiliate, to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement or any other Loan Document to such Lender or its Affiliates, irrespective of whether or not such Lender or Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrower may be contingent or unmatured or are owed to a branch office or Affiliate of such Lender different from the branch office or Affiliate holding such deposit or obligated on such indebtedness.

SECTION 9.09 Governing Law; Jurisdiction; Etc.

(a) Governing Law. This Agreement and the other Loan Documents and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement or any other Loan Document (except, as to any other Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the law of the State of New York.

(b) Jurisdiction. The Borrower irrevocably and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against the Administrative Agent, any Lender or any Related Party of the foregoing in any way relating to this Agreement or any other Loan Document or the transactions relating hereto or thereto, in any forum other than the courts of the State of New York sitting in New York County, and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such action, litigation or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by Applicable Law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or in any other Loan Document shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or its properties in the courts of any jurisdiction.

 

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(c) Waiver of Venue. The Borrower irrevocably and unconditionally waives, to the fullest extent permitted by Applicable Law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by Applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d) Service of Process. Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by Applicable Law.

SECTION 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 9.11 Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

SECTION 9.12 Treatment of Certain Information; Confidentiality. Each of the Parties or any person who becomes a Party, whether or not any such Party or person ceases to be a Party, shall not (i) without the express prior written consent of the other Parties, issue any press release in relation to the transactions evidenced by this Agreement and the other Loan Documents, or (ii) disclose to any other person (other than another Party to a Loan Document) the Loan Documents or any Confidential Information (as defined below), except that Confidential Information may be disclosed (a) to its Affiliates and to its Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (b) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners); (c) to the extent required by Applicable Laws or by any subpoena or similar legal process; (d) to any other party hereto; (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any Security Document or any action or proceeding relating to this Agreement or any other Loan Document or any Security Document or the enforcement of rights hereunder or thereunder; (f) to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights and obligations under this Agreement, or (ii) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Borrower and its obligations, this Agreement or payments hereunder, in each case provided such recipient(s) have signed a confidentiality

 

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agreement consistent with this Section 9.12; (g) on a confidential basis to (i) any rating agency in connection with rating the Borrower or its Subsidiaries or this Agreement or the Facilities or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to the Facilities; (h) to any central bank or Federal Reserve Bank to whom or for whose benefit a Lender charges, assigns or otherwise creates Security Interest (or may do so) pursuant to Section 9.04(e); (i) with the consent of the Party who has provided such Confidential Information; (j) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section, or (y) becomes available to the Administrative Agent, any Lender or any of their respective Affiliates on a non-confidential basis from a source other than the Borrower who did not acquire such information as a result of a breach of this Section, or (k) to its auditors, legal, insurance or other professional advisors or insurers or underwriters of any member of the group of companies of which such party is a member. In addition, the Administrative Agent and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry and service providers to the Agents or any Lender in connection with the administration of this Agreement, the other Loan Documents, and the Commitments.

For purposes of this Section, “Confidential Information” means this Agreement and the other Loan Documents and the transactions contemplated hereby and all information received from any other Party to this Agreement or any of its Subsidiaries or any of their respective businesses, relating to such Party’s business, financial or other covenants, other than any such information that is available to the receiving Party on a nonconfidential basis prior to disclosure by the disclosing Party; provided that, in the case of such information received after the Closing Date, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Confidential Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

SECTION 9.13 PATRIOT Act. The Administrative Agent and each Lender subject to the PATRIOT Act hereby notifies the Borrower that, pursuant to the requirements of the PATRIOT Act, it may be required to obtain, verify, record and update certain information relating to individuals and entities which maintain a business relationship with the Administrative Agent and such Lender, , which information includes the name and address of the Borrower and Obligors and other information that will allow the Administrative Agent and such Lender to identify the Borrower and Obligors in accordance with the PATRIOT Act. Accordingly, each Party agrees to provide to the Administrative Agent and each such Lender upon their request from time to time such identifying information and documentation as may be available in order to enable the Administrative Agent and each such Lender to comply with the requirements of the PATRIOT Act.

SECTION 9.14 Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts that are treated as interest on such Loan under Applicable Law (collectively, “charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) that may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with Applicable Law, the rate of interest payable in respect of such Loan hereunder, together with all charges payable in respect thereof, shall be limited to the Maximum Rate. To the extent lawful, the interest and charges that would have been paid in respect of such Loan but were not paid as a result of the operation of this Section shall be cumulated and the interest and charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the amount collectible at the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate for each day to the date of repayment, shall have been received by such Lender. Any amount collected by such Lender that exceeds the maximum amount collectible at the Maximum Rate shall be applied to the reduction of the principal balance of such Loan or refunded to the Borrower so that at no time shall the interest and charges paid or payable in respect of such Loan exceed the maximum amount collectible at the Maximum Rate.

 

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SECTION 9.15 Payments Set Aside. To the extent that any payment by or on behalf of the Borrower is made to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Effective Rate from time to time in effect.

SECTION 9.16 No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (a) (i) no fiduciary, advisory or agency relationship between the Borrower and its Subsidiaries and the Administrative Agent or any Lender is intended to be or has been created in respect of the transactions contemplated hereby or by the other Loan Documents, irrespective of whether the Administrative Agent or any Lender has advised or is advising the Borrower or any Subsidiary on other matters, (ii) the arranging and other services regarding this Agreement provided by the Administrative Agent and the Lenders are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Administrative Agent and the Lenders, on the other hand, (iii) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent that it has deemed appropriate and (iv) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; and (b) (i) the Administrative Agent and the Lenders each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person; (ii) none of the Administrative Agent and the Lenders has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent and the Lenders and their respective Affiliates may be engaged, for their own accounts or the accounts of customers, in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and none of the Administrative Agent and the Lenders has any obligation to disclose any of such interests to the Borrower or its Affiliates. To the fullest extent permitted by Law, the Borrower hereby waives and releases any claims that it may have against any of the Administrative Agent and the Lenders with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

SECTION 9.17 Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

 

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(a) the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder that may be payable to it by any party hereto that is an Affected Financial Institution; and

(b) the effects of any Bail-in Action on any such liability, including, if applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of the applicable Resolution Authority.

SECTION 9.18 QFC Provisions(i) . The following provisions apply to the extent that the Loan Documents provide support, through a guarantee or otherwise, for Hedging Agreements or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and each such QFC, a “Supported QFC”):

(a) The parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):

(i) In the event a Covered Entity that is party to a Supported QFC or to any QFC Credit Support (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States.

(ii) In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support

 

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(b) In addition, the parties agree that:

(i) Notwithstanding anything to the contrary in the Loan Documents or any other agreement, but without prejudice to the requirements of Section 9.18(a), (1) Default Rights under the Loan Documents that might otherwise apply to a Supported QFC or any QFC Credit Support may not be exercised against a Covered Party if such Default Rights are related, directly or indirectly, to a BHC Act Affiliate of such Covered Party becoming subject to Insolvency Proceedings, except to the extent such exercise would be permitted under 12 C.F.R. § 252.84, 12 C.F.R. § 47.5, or 12 C.F.R. § 382.4, as applicable; and (2) nothing in the Loan Documents or any other agreement shall prohibit the transfer of any Covered Affiliate QFC Credit Support, any interest or obligation in or under, or any property securing, such Covered Affiliate QFC Credit Support to a Transferee upon or following a BHC Act Affiliate of the Covered Party becoming subject to Insolvency Proceedings, unless the transfer would result in the party supported thereby being the beneficiary of such Covered Affiliate QFC Credit Support in violation of any law applicable to such party.

(ii) After a BHC Act Affiliate of a Covered Party has become subject to Insolvency Proceedings, if any party to the Loan Documents, any Supported QFC or any QFC Credit Support seeks to exercise any Default Right against such Covered Party with respect to such Supported QFC or such QFC Credit Support, the party seeking to exercise such Default Right shall have the burden of proof, by clear and convincing evidence, that the exercise of such Default Right is permitted hereunder.

(c) As used in this Section 9.18, the following terms have the following meanings;

(i) “BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

(ii) “Covered Entity” means any of the following:

(A) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

(B) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

(C) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

(iii) “Covered Affiliate QFC Credit Support” means, in respect of a Supported QFC to which a Covered Party is the direct party, QFC Credit Support provided by a Covered Party that is a BHC Act Affiliate of such direct party.

(iv) “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

(v) “Insolvency Proceeding” means a receivership, insolvency, liquidation, resolution, or similar proceeding.

(vi) “QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

(vii) “Transferee” means, in respect of any Covered Affiliate QFC Credit Support, a person to whom such Covered Affiliate QFC Credit Support is transferred upon the provider of such Covered Affiliate QFC Credit Support becoming subject to Insolvency Proceedings or thereafter as part of its resolution, restructuring, or reorganization.

 

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SECTION 9.19 Amendment and Restatement.

(a) This Agreement shall be deemed to be an amendment to and restatement of the Initial Credit Agreement, and the Initial Credit Agreement as amended and restated hereby shall remain in full force and effect and is hereby ratified and confirmed in all respects. This Agreement is not intended to constitute, nor does it constitute, an interruption, suspension of continuity, satisfaction, discharge of prior duties, novation, or termination of the Initial Credit Agreement or the liens, security interests, loans, guarantees, liabilities, expenses, or obligations under the Initial Credit Agreement, or the collateral thereunder. Each of the Obligors affirms its duties and obligations under the terms of the Initial Credit Agreement (as amended and restated by this Agreement). This Agreement amends and restates the Initial Credit Agreement in its entirety and any obligation thereunder shall be deemed to be outstanding under this Agreement. If there is a conflict between the Initial Credit Agreement and this Agreement, this Agreement shall govern from and after the Restatement Date. Upon the Restatement Date, each reference to the Initial Credit Agreement in any other Secured Debt Document or in any other document, instrument or agreement shall mean and be a reference to the Initial Credit Agreement as amended and restated by this Agreement.

(b) Each Obligor hereby expressly acknowledges and agrees that as at the Restatement Date the Term Loan Required Payments (reflecting drawn Term Loan Commitments) which are outstanding are set out in the Repayment Schedule prepared as of the Restatement Date set forth in Schedule 2.03.

(c) Each Obligor hereby (i) expressly acknowledges the terms of this Agreement, (ii) ratifies and affirms its obligations under the Loan Documents (including guarantees and security agreements) executed by such Obligor and (iii) acknowledges, renews and extends its continued liability under all such Loan Documents and agrees such Loan Documents remain in full force and effect, including with respect to the obligations of the Borrower as modified by this Agreement. Each Obligor further represents and warrants to each Secured Party that after giving effect to this Agreement, neither the modification of the Initial Credit Agreement effected pursuant to this Agreement, nor the execution, delivery, performance or effectiveness of this Agreement (A) impairs the validity, effectiveness or priority of the Liens granted pursuant to any Secured Debt Document (as such term is defined in the Initial Credit Agreement), and such Liens continue unimpaired with the same priority to secure repayment of all Obligations, whether heretofore or hereafter incurred; or (B) requires that any new filings be made or other action taken to perfect or to maintain the perfection of such Liens.

(d) Each Obligor hereby agrees, acknowledges and affirms that (i) each of the Loan Documents to which it is a party shall remain in full force and effect and shall constitute security for all Obligations pursuant to the Initial Credit Agreement as amended and restated hereby, and (ii) any reference to the Initial Credit Agreement appearing in any other Secured Debt Document shall on and after the Restatement Date be deemed to refer to the Initial Credit Agreement as amended and restated hereby. In furtherance of the foregoing, each Obligor hereby confirms the security interest in the Collateral granted by it in favor of the Security Trustee pursuant to each Collateral Document to which it is a party.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

BORROWER
SEASPAN HOLDCO III LTD.
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President


PRIMARY GUARANTOR
SEASPAN CORPORATION
By:  

/s/ Graham Talbot

Name: Graham Talbot
Title: Chief Financial Officer


ADMINISTRATIVE AGENT
CITIBANK, N.A.,
as Administrative Agent
By:  

/s/ Marion O’Connor

Name: Marion O’Connor
Title: Senior Trust Officer


STRUCTURING AGENT
CITIBANK, N.A.,
as Structuring Agent
By:  

/s/ Matthew J. Simonetti

Name: Matthew J. Simonetti
Title: Managing Director


LEAD SUSTAINBILITY COORDINATOR
SOCIÉTÉ GÉNÉRALE, HONG KONG BRANCH, a public limited company incorporated in France, acting through its Hong Kong Branch,
as Lead Sustainability Coordinator
By:  

/s/ Gwenael Delattre

Name: Gwenael Delattre
Title:   Director, Head of Shipping & Offshore Finance Asia Pacific
By:  

/s/ Ting Zhang

Name: Ting Zhang
Title:   Director, Shipping & Offshore Finance


LENDERS AND OTHER AGENTS
CITIBANK, N.A., as Global Coordinator and as Co-Sustainability Coordinator
By:  

/s/ Matthew J. Simonetti

Name: Matthew J. Simonetti
Title: Managing Director


BANK OF MONTREAL,
as Mandated Lead Arranger and Co-Sustainability Coordinator
By:  

/s/ Ben Rough

Name: Ben Rough
Title: Director


NATIONAL AUSTRALIA BANK LIMITED,
as Mandated Lead Arranger
By:  

/s/ Daniel Carr

Name: Daniel Carr
Title:   Head of Asset Finance & Leasing, North America


WELLS FARGO BANK, N.A.,

as Lender, Mandated Lead Arranger and Co-Sustainability Coordinator

By:  

/s/ Jerri Kallam

Name: Jerri Kallam
Title: Director


BANK OF AMERICA, N.A.,
as Lender and Mandated Lead Arranger
By:  

/s/ Daryl K. Hogge

Name: Daryl K. Hogge
Title: Senior Vice President


CTBC BANK CO., LTD.,
as Lender
By:  

/s/ Ting Chen

Name: Ting Chen
Title: Senior Vice President


CATHAY UNITED BANK,
as Lender
By:  

/s/ Ng Shih Wu

Name: Ng Shih Wu
Title: Vice President


KFW IPEX-BANK GMBH,
as Lender
By:  

/s/ Sebastian Blum

Name: Sebastian Blum
Title: Director
By:  

/s/ André Mutter

Name: André Mutter
Title: Vice President


THE TORONTO-DOMINION BANK,
as Lender
By:  

/s/ Andrei Rybianski

Name: Andrei Rybianski
Title: Director, Commercial National Accounts
By:  

/s/ Kathryn Gislason

Name: Kathryn Gislason
Title: Manager, Commercial Credit


CRÉDIT INDUSTRIEL ET COMMERCIAL,

NEW YORK BRANCH, as Lender

By:  

/s/ Andrew McKuin

Name: Andrew McKuin
Title: Managing Director
By:  

/s/ Mark Palin

Name: Mark Palin
Title: First Vice President


HSBC BANK CANADA,

as Lender

By:  

/s/ Angie Hall

Name: Angie Hall
Title: Assistant Vice President, Large Corporate
By:  

/s/ Carlo Chavarri

Name: Carlo Chavarri
Title: Assistant Vice President, Corporate Banking


STANDARD CHARTERED BANK,

as Lender

By:  

/s/ James Beck

Name: James Beck
Title: Director


RAYMOND JAMES BANK, N.A., as Lender
By:  

/s/ Cormac Mac Lochlainn

Name: Cormac Mac Lochlainn
Title: SVP, Corporate Banking


STATE BANK OF INDIA, LONDON BRANCH, as Lender
By:  

/s/ Pradipta Hazra

Name: Pradipta Hazra
Title: Head Credit


CHANG HWA COMMERCIAL BANK, LTD, as Lender
By:  

/s/ Huei Jin, Lin

Name: Huei Jin, Lin
Title: VP & General Manager


BANK OF PANHSIN, as Lender
By:  

/s/ Henry Chien

Name: Henry Chien
Title: E.V.P & General Manager

Exhibit 4.3

 

 

 

FIRST AMENDED AND RESTATED

CREDIT AGREEMENT

dated as of

19 May, 2021

between

SEASPAN HOLDCO III LTD.,

as Borrower,

SEASPAN CORPORATION,

as Guarantor,

CITIBANK, N.A.,

as Administrative Agent

CITIBANK, N.A.,

as Structuring Agent

CITIBANK, N.A.,

as global coordinator, left lead mandated lead arranger and joint-bookrunner

BANK OF MONTREAL,

SOCIÉTÉ GÉNÉRALE, HONG KONG BRANCH,

BNP PARIBAS,

NATIONAL AUSTRALIA BANK LIMITED,

BANK OF AMERICA, N.A. and

WELLS FARGO BANK, N.A.,

as mandated lead arrangers and joint-bookrunners

SOCIÉTÉ GÉNÉRALE, HONG KONG BRANCH,

as Lead Sustainability Coordinator

CITIBANK, N.A.,

BANK OF MONTREAL, and

WELLS FARGO BANK, N.A.,

as Co-Sustainability Coordinators

and

THE SEVERAL LENDERS FROM TIME TO

TIME PARTY HERETO

 

 

 

 


TABLE OF CONTENTS

 

     Page  

ARTICLE I DEFINITIONS

     2  

SECTION 1.01

  Defined Terms      2  

SECTION 1.02

  Terms Generally      30  

SECTION 1.03

  Accounting Terms; Changes in GAAP      31  

SECTION 1.04

  Rates      31  

SECTION 1.05

  Restricted Lenders.      31  

ARTICLE II COMMITMENTS

     32  

SECTION 2.01

  Term Loan Commitments      32  

SECTION 2.02

  [Reserved].      33  

SECTION 2.03

  Repayment Schedules.      33  

SECTION 2.04

  Repayment of the Loans      34  

SECTION 2.05

  Optional Prepayments      34  

SECTION 2.06

  Mandatory Prepayments.      35  

SECTION 2.07

  [Reserved].      36  

SECTION 2.08

  Interest      36  

SECTION 2.09

  Fees      37  

SECTION 2.10

  Evidence of Debt      37  

SECTION 2.11

  Payments Generally; Several Obligations of Lenders      38  

SECTION 2.12

  Sharing of Payments      38  

SECTION 2.13

  Compensation for Losses      39  

SECTION 2.14

  Increased Costs      39  

SECTION 2.15

  Taxes      40  

SECTION 2.16

  Benchmark Replacement Setting      41  

SECTION 2.17

  [Reserved].      47  

SECTION 2.18

  Mitigation Obligations; Replacement of Lenders      48  

SECTION 2.19

  [Reserved].      49  

SECTION 2.20

  Defaulting Lenders      49  

SECTION 2.21

  Increases in Commitments      50  

ARTICLE III REPRESENTATIONS AND WARRANTIES

     51  

SECTION 3.01

  Status      51  

SECTION 3.02

  Powers and authority      51  

SECTION 3.03

  Legal validity      51  

SECTION 3.04

  Non-conflict      51  

SECTION 3.05

  No default      52  

SECTION 3.06

  Authorizations      52  

SECTION 3.07

  Financial statements      52  

SECTION 3.08

  No misleading information      52  

SECTION 3.09

  No Material Adverse Effect      52  

SECTION 3.10

  Litigation      52  

SECTION 3.11

  Pari passu ranking      52  

SECTION 3.12

  Taxes      53  

 

i


SECTION 3.13

  Taxes on payments      53  

SECTION 3.14

  Stamp duties      53  

SECTION 3.15

  Environment      53  

SECTION 3.16

  Security Interests      53  

SECTION 3.17

  Security Assets      53  

SECTION 3.18

  Collateral Vessel      53  

SECTION 3.19

  ISM Code and ISPS Code compliance      53  

SECTION 3.20

  No amendments to Related Contracts      54  

SECTION 3.21

  Money Laundering      54  

SECTION 3.22

  Anti-Corruption and Sanctions      54  

SECTION 3.23

  Compliance with laws      54  

SECTION 3.24

  Investments Company Act      54  

SECTION 3.25

  Regulation U      55  

SECTION 3.26

  Insolvency      55  

SECTION 3.27

  Immunity      55  

SECTION 3.28

  [Reserved]      55  

SECTION 3.29

  Jurisdiction and governing law      55  

SECTION 3.30

  Accounts      55  

SECTION 3.31

  Charters      55  

SECTION 3.32

  Ownership      55  

SECTION 3.33

  Use of proceeds      55  

SECTION 3.34

  Special purpose representations      56  

SECTION 3.35

  Separateness      56  

SECTION 3.36

  Beneficial Ownership Certification      57  

ARTICLE IV CONDITIONS

     57  

SECTION 4.01

  Initial Borrowing Date      57  

SECTION 4.02

  Conditions to Borrowings      60  

SECTION 4.03

  [Reserved]      64  

SECTION 4.04

  Conditions to Restatement      64  

SECTION 4.05

  Post-Restatement Items      66  

ARTICLE V AFFIRMATIVE COVENANTS

     66  

SECTION 5.01

  Financial Statements      66  

SECTION 5.02

  Compliance Certificates      67  

SECTION 5.03

  Valuation      67  

SECTION 5.04

  Access to Books and Records      68  

SECTION 5.05

  Information—miscellaneous      68  

SECTION 5.06

  Notification of Default      68  

SECTION 5.07

  Know your customer checks      69  

SECTION 5.08

  Use of websites      69  

SECTION 5.09

  Authorizations      70  

SECTION 5.10

  Compliance with laws      70  

SECTION 5.11

  Pari passu ranking      70  

SECTION 5.12

  Place of business      70  

SECTION 5.13

  Security      70  

SECTION 5.14

  Separateness Covenants      71  

SECTION 5.15

  Registration of the Collateral Vessels      72  

SECTION 5.16

  Classification and repair      72  

 

ii


SECTION 5.17

  Lawful and safe operation      73  

SECTION 5.18

  Repair of the Collateral Vessels      74  

SECTION 5.19

  Arrests and liabilities      74  

SECTION 5.20

  Environment      75  

SECTION 5.21

  Information regarding the Collateral Vessels      75  

SECTION 5.22

  Provision of further information      76  

SECTION 5.23

  Management      76  

SECTION 5.24

  Charters      76  

SECTION 5.25

  Termination of Eligible Charters      77  

SECTION 5.26

  Scope of Obligatory Insurances      78  

SECTION 5.27

  Obligatory Insurances      79  

SECTION 5.28

  Power of Administrative Agent to insure      80  

SECTION 5.29

  ISM Code      80  

SECTION 5.30

  ISPS Code      81  

SECTION 5.31

  Dry Docking      81  

SECTION 5.32

  Rating      81  

SECTION 5.33

  Taxation      82  

SECTION 5.34

  Decarbonization Certificates      82  

ARTICLE VI NEGATIVE COVENANTS

     84  

SECTION 6.01

  Security Interests      84  

SECTION 6.02

  Mergers      84  

SECTION 6.03

  Special Purpose Covenants      84  

SECTION 6.04

  Payment of dividends      84  

SECTION 6.05

  Vessel Substitutions      85  

SECTION 6.06

  Vessel Dispositions and Removals      85  

SECTION 6.07

  Year end      86  

SECTION 6.08

  Related Contracts      86  

SECTION 6.09

  Financial Covenants      86  

SECTION 6.10

  Creation of Additional Security      87  

SECTION 6.11

  No amendment to Related Contracts      87  

SECTION 6.12

  Anti-corruption law      87  

SECTION 6.13

  Sanctions      87  

SECTION 6.14

  Additional Secured Debt      88  

ARTICLE VII EVENTS OF DEFAULT

     88  

SECTION 7.01

  Events of Default      88  

ARTICLE VIII AGENCY

     91  

SECTION 8.01

  Appointment and Authority      91  

SECTION 8.02

  Rights as a Lender      91  

SECTION 8.03

  Exculpatory Provisions      92  

SECTION 8.04

  Reliance by Administrative Agent      93  

SECTION 8.05

  Delegation of Duties      93  

SECTION 8.06

  Resignation of Administrative Agent      93  

SECTION 8.07

  Non-Reliance on Other Lenders      94  

SECTION 8.08

  No Other Duties      94  

SECTION 8.09

  Administrative Agent May File Proofs of Claim      94  

 

iii


SECTION 8.10

  Intercreditor Agreement      95  

ARTICLE IX MISCELLANEOUS

     95  

SECTION 9.01

  Notices      95  

SECTION 9.02

  Waivers; Amendments      97  

SECTION 9.03

  Expenses; Indemnity; Damage Waiver      99  

SECTION 9.04

  Successors and Assigns      100  

SECTION 9.05

  Survival      103  

SECTION 9.06

  Counterparts; Integration; Effectiveness; Electronic Execution      103  

SECTION 9.07

  Severability      103  

SECTION 9.08

  Right of Setoff      104  

SECTION 9.09

  Governing Law; Jurisdiction; Etc      104  

SECTION 9.10

  WAIVER OF JURY TRIAL      105  

SECTION 9.11

  Headings      105  

SECTION 9.12

  Treatment of Certain Information; Confidentiality      105  

SECTION 9.13

  PATRIOT Act      106  

SECTION 9.14

  Interest Rate Limitation      106  

SECTION 9.15

  Payments Set Aside      106  

SECTION 9.16

  No Advisory or Fiduciary Responsibility      107  

SECTION 9.17

  Acknowledgement and Consent to Bail-In of EEA Financial Institutions      107  

SECTION 9.18

  QFC Provisions      108  

SECTION 9.19

  Amendment and Restatement      110  

 

iv


SCHEDULES

 

SCHEDULE 1.01      

Estimated add back related to vessel depreciation

SCHEDULE 2.01      

Commitments and Lenders

SCHEDULE 2.02      

Concentration Limit Requirements

SCHEDULE 2.03      

Repayment Schedule as of the Restatement Date

EXHIBITS          
EXHIBIT A          

Assignment and Assumption

EXHIBIT B      

Compliance Certificate

EXHIBIT C      

Identified Vessels

EXHIBIT D      

Form of Decarbonization Certificate

EXHIBIT E      

Form of Charterer’s Undertaking

 

 

v


FIRST AMENDED AND RESTATED CREDIT AGREEMENT dated as of 19 May, 2021 (this “Agreement”), between SEASPAN HOLDCO III LTD., a corporation organized and existing under the laws of the Republic of the Marshall Islands, with limited liability, with its registered offices at Trust Company Complex, Ajeltake Road, Ajeltake Island, P.O. Box 1405, Majuro, Marshall Islands MH96960 and registered as a non-Hong Kong company under Part 16 of the Companies Ordinance (Cap. 622 of the laws of Hong Kong) (the “Borrower”), SEASPAN CORPORATION, a corporation organized and existing under the laws of the Republic of the Marshall Islands with limited liability, as a Guarantor, the several banks and other financial institutions or entities from time to time party hereto as Lenders, CITIBANK, N.A. (“Citibank”), acting through its Agency and Trust Division, not in its individual capacity but solely as administrative agent (in such capacity, together with its successors and permitted assigns, the “Administrative Agent”), CITIBANK, N.A., as structuring agent (in such capacity, the “Structuring Agent”), CITIBANK, N.A., as global coordinator and left lead mandated lead arranger and joint-bookrunner (in such capacity, the “Global Coordinator”), BANK OF MONTREAL, SOCIÉTÉ GÉNÉRALE, HONG KONG BRANCH, a public limited company incorporated in France, acting through its Hong Kong Branch (“Société Générale, Hong Kong Branch”), BNP PARIBAS, NATIONAL AUSTRALIA BANK LIMITED, BANK OF AMERICA, N.A. and WELLS FARGO BANK, N.A., as mandated lead arrangers and joint-bookrunners (in such capacity, the “Mandated Lead Arrangers” and each a “Mandated Lead Arranger”), SOCIÉTÉ GÉNÉRALE, HONG KONG BRANCH, a public limited company incorporated in France, acting through its Hong Kong Branch (“Société Générale, Hong Kong Branch”), as lead sustainability coordinator (in such capacity, the “Lead Sustainability Coordinator”) and CITIBANK, N.A., BANK OF MONTREAL and WELLS FARGO BANK, N.A., as co-sustainability coordinators (in such capacity, the “Co-Sustainability Coordinators” and each a “Co-Sustainability Coordinator”).

W I T N E S S E T H:

WHEREAS the Borrower has requested from the Lenders a term loan facility (as may be increased from time to time in accordance with the terms of this Agreement and the other Secured Debt Documents) as set forth herein.

WHEREAS the proceeds of the Loans and any Additional Secured Debt will be used (a) to finance the acquisition of Collateral Vessels and refinance existing indebtedness in relation to the Collateral Vessels and (b) for general corporate purposes of the Borrower and the Guarantor.

WHEREAS it is the intent of the parties hereto that this Agreement not constitute a novation of the obligations and liabilities of the parties under the Initial Credit Agreement, but that this Agreement amend and restate in its entirety the Initial Credit Agreement and re-evidence the obligations and liabilities of the parties thereunder.

WHEREAS the parties are willing to amend and restate the Initial Credit Agreement on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained herein, the parties hereto hereby agree as follows:


ARTICLE I

DEFINITIONS

SECTION 1.01 Defined Terms. Capitalized terms used in this Agreement which are not otherwise defined have the meanings assigned to them in the Intercreditor Agreement. As used in this Agreement, the following terms have the meanings specified below:

Account Bank” means, in relation to the HK Collection Account, Citibank, N.A., Hong Kong Branch, in relation to any Vessel Owner Account, such bank as may be approved by the Administrative Agent, and, in relation to all other Accounts, Bank of Montreal.

Account Charge” means, in relation to each of the Charged Accounts, the first priority fixed charge or pledge over all such accounts given or to be given by the relevant account holder thereof in favor of and in form and substance satisfactory to the Security Trustee.

Additional Secured Debt” has the meaning specified in the Intercreditor Agreement.

Additional Security” means any Security Interest created pursuant to Section 6.10.

Additional Vessel” means any vessel (other than the Identified Vessels) that meets the Eligibility Criteria.

Administrative Agent” means Citibank, N.A., acting through its Agency and Trust Division, not in its individual capacity but solely in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate, account as set forth in Section 9.01, or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.

Administrative Parties” means, collectively, the Global Coordinator, the Mandated Lead Arrangers, the Lead Sustainability Coordinator, the Co-Sustainability Coordinators, the Administrative Agent, the Structuring Agent and the Security Trustee.

Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

Advance Rate” shall mean, for any Borrowing and the Collateral Vessel related thereto, the amount calculated as a percentage of the Asset Value of such Collateral Vessel as follows: (a) in respect of a Collateral Vessel which is subject to an Eligible Charter, (i) where such Collateral Vessel is less than 5 years old, 75%, (ii) where such Collateral Vessel is equal to or more than 5 years old but less than 10 years old, 70%, and (iii) where such Collateral Vessel is equal to or greater than 10 years old, 60%; and (b) in respect of a Collateral Vessel which is not subject to an Eligible Charter, (i) where such Collateral Vessel is less than 10 years old, 60%, and (ii) where such Collateral Vessel is equal to or greater than 10 years old, 50%.

Affected Financial Institution” means, (a) any EEA Financial Institution or (b) any UK Financial Institution.

 

2


Affiliate” means, with respect to a specified Person, another Person that directly or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

Agents” means, collectively, the Administrative Agent, the Structuring Agent, the Global Coordinator, the Mandated Lead Arrangers, the Lead Sustainability Coordinator and the Co-Sustainability Coordinators.

Agent Parties” has the meaning specified in Section 9.01(d)(ii).

Agreement” has the meaning specified in the introductory paragraph hereof.

Annex VI” means Annex VI of the Protocol of 1997 (as subsequently amended from time to time) to amend the International Convention for the Prevention of Pollution from Ships 1973 (Marpol), as modified by the Protocol of 1978 relating thereto.

Anti-Corruption Laws” means all laws, rules, and regulations, as amended, concerning or relating to bribery or corruption, including, without limitation, the U.S. Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 (as amended), and all other applicable anti-bribery and corruption laws, regulations or ordinances in any jurisdiction where the Obligors are located or doing business.

Anti-Money Laundering Laws” has the meaning specfied in Section 3.21.

Applicable Charter Margin Adjustment” means for the relevant Margin Period:

(a) less 0.025% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Margin Period is equal to or greater than 25% and less than 30%;

(b) less 0.030% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Margin Period is equal to or greater than 30% and less than 35%;

(c) less 0.035% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Margin Period is equal to or greater than 35% and less than 40%;

(d) less 0.040% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Margin Period is equal to or greater than 40% and less than 45%;

(e) less 0.045% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Margin Period is equal to or greater than 45% and less than 50%; and

(f) less 0.050% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Margin Period is equal to or greater than 50%.

Applicable Law” means, as to any Person, all applicable Laws binding upon such Person or to which such a Person is subject.

 

3


Applicable Percentage” means, with respect to any Lender, the percentage of the total Commitments represented by such Lender’s Commitment. If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments.

Applicable Performance Margin Adjustment” means for the relevant Margin Period:

(a) plus 0.025% per annum where the Average Collateral Vessel Delta determined on the Delta Test Date immediately prior to the relevant Margin Period is greater than +2.5%; and

(b) less 0.025% per annum where the Average Collateral Vessel Delta determined on the Delta Test Date immediately prior to the relevant Margin Period is less than -2.5%.

Approved Flag State” means the Republic of the Marshall Islands, the Commonwealth of the Bahamas, the Republic of Liberia, the Republic of Panama, the Commonwealth of Bermuda, the Cayman Islands, the Isle of Man, Malta, Hong Kong, the United Kingdom, the Commonwealth of Australia, Barbados, Belgium, the Republic of Cyprus, Danish International Ship Register (DIS), Germany, Gibraltar, Greece, Norwegian International Ship Register (NIS), Norway, The Netherlands, Singapore, United States of America and any other flag state approved by the Administrative Agent in writing; provided that the total number of Collateral Vessels that may be registered under the United States of America flag at any one time shall be limited to two and such Collateral Vessels shall not be qualified Jones Act vessels. The Administrative Agent shall, in giving any such approval, act on the instructions of all Lenders, unless no Lender has objected to any such other flag state within 15 days of a request for approval, in which case, the Administrative Agent shall act on the instructions of the Required Lenders.

Approved Valuers” means H. Clarkson & Co. Ltd. and Howe Robinson Partners (or, in either case, such other appraiser as the Administrative Agent shall agree).

Asset Value” means, in respect of any Collateral Vessel or Substitute Vessel, the greater of the DCF Value and the Market Value of such Collateral Vessel.

Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in substantially the form of Exhibit A or any other form approved by the Administrative Agent.

Availability Termination Date” means the Term Loan Availability Termination Date.

Average Collateral Vessel Delta” means the weighted average Collateral Vessel Delta for all Collateral Vessels when calculated on each Delta Test Date, with the weighting of each Collateral Vessel Delta to be determined by the proportion the Asset Value of the relevant Collateral Vessel multiplied by the Advance Rate for such Collateral Vessel, bears to the Borrowing Base on 31 December of the year immediately prior to the relevant Delta Test Date, calculated by the Lead Sustainability Coordinator with reference to the Decarbonization Certificate and the Compliance Data.

 

4


Average Efficiency Ratio” and/or “AER” means, in respect of a single Collateral Vessel, such Collateral Vessel’s average efficiency ratio expressed in unit grams of CO2 per tonne-mile i.e. gCO2/dwt-nm calculated by the Lead Sustainability Coordinator with reference to the Decarbonization Certificate and the Compliance Data, as per the below formula:

 

LOGO

where [GRAPHIC APPEARS HERE] is the carbon emissions for voyage [GRAPHIC APPEARS HERE] computed using the fuel consumption with reference to the Decarbonization Certificate and the Compliance Data and carbon factor of each type of fuel set out in MEPC 63/23 Annex 8 – 2012 Guidelines on the Method of Calculation of the Attained Energy Efficient Design Index (EEDI) for New Ships as updated from time to time, [GRAPHIC APPEARS HERE] is the design deadweight of the Collateral Vessel, and [GRAPHIC APPEARS HERE] is the distance travelled on voyage [GRAPHIC APPEARS HERE]. The AER is computed for all voyages performed by the relevant Collateral Vessel over the applicable 12 calendar months.

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

Bail-In Legislation” means, (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

BB Event” means, as of any BB Test Date, a BB Ratio in excess of 1.0:1.0x.

BB Ratio” means, at any Test Date, the ratio of (a) the aggregate of (x) the outstanding Program Debt plus (y) the then mark-to-market value of any amounts payable to (but, for the avoidance of any doubt, ignoring amounts payable by) the Hedge Counterparties under any Hedging Agreements and the other Hedge Counterparties (as defined in the Intercreditor Agreement) under any other Hedging Agreements (as defined in the Intercreditor Agreement), to (b) the Borrowing Base.

BB Test Date” means (a) each Borrowing Date; (b) each Vessel Substitution Date; (c) each Vessel Disposition Date; and (d) each Determination Date.

Beneficial Ownership Certification” means a certification regarding beneficial ownership or control as required by the Beneficial Ownership Regulation.

Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

Bill of Sale” means, in respect of a Collateral Vessel, the relevant bill of sale (or other instrument of transfer) executed by the relevant seller in favor of the relevant Vessel Owner pursuant to the relevant Purchase Agreement.

Borrower” means Seaspan Holdco III Ltd., a company incorporated in the Marshall Islands or such other jurisdiction approved by the Administrative Agent with the consent of all Lenders (in their reasonable discretion).

Borrower Materials” has the meaning specified in Section 9.01(e).

Borrowing” means a borrowing by the Borrower of Loans.

 

5


Borrowing Base” means, at any Test Date, the aggregate of (a) the latest Asset Value of each Collateral Vessel (other than Excluded Collateral Vessels) multiplied by the Advance Rate applicable to each such Collateral Vessel (provided that, where a Concentration Limit Event has occurred and is continuing, there shall be excluded from the Borrowing Base an amount equal to the Asset Values of Collateral Vessels solely to the extent such Asset Value exceeds the specified percentage thresholds set forth on Schedule 2.02); (b) any Additional Security multiplied by such percentage as shall be agreed between the Borrower and the Administrative Agent acting in their reasonable judgment; and (c) the then current balance of any amounts on deposit in the Collateral Account.

Borrowing Date” means any Business Day specified in a notice pursuant to Section 2.01 or 2.02 as a date on which any Borrower requests the Lenders to make Loans hereunder.

Borrowing Request” means a request for a Term Loan Borrowing which shall be in such form as the Administrative Agent may approve.

Business Day” means any day that is not a Saturday, Sunday or other day that is a legal holiday under the laws of the State of New York, the Province of British Columbia, the Province of Ontario or Hong Kong, or is a day on which banking institutions in such jurisdictions are authorized or required by Law to close; provided that (a) when used in connection with a LIBO Rate Loan, the term “Business Day” means any such day that is also a day on which dealings in Dollar deposits are conducted by and between banks in the London interbank market and (b) when used in connection with any Borrowing Date, the term “Business Day” shall also exclude any day which is a legal holiday in Paris, Montreal and Taipei.

Cash Sweep Event” means a BB Event or a DSCR Cash Sweep Event.

Change in Law” means 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, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

Change of Control” means the acquisition, directly or indirectly, by any person or group of persons other than a UBO of beneficial ownership of more than 50% of the aggregate outstanding voting power of the equity interests of the Guarantor.

Charged Accounts” means each of: (a) the Collection Account; (b) the Collateral Account; (c) the HK Collection Account; and (d) any Vessel Owner Account, and each such account shall be held with the Account Bank in the name of (in the case of any Vessel Owner Account) the relevant Vessel Owner and (in all other cases) the Borrower.

Charter” means any charter or contract for the use, employment or operation of a vessel or the carriage of people and/or cargo or the provision of services by or from such vessel.

 

6


Charter Guarantees” means in relation to each of the Collateral Vessels, any guarantee provided or to be provided by a Charter Guarantor in relation to a Charterer’s obligations under a Charter and “Charter Guarantee” means any of them.

Charter Guarantor” means any guarantor of a Charterer’s obligations under a Charter.

Charter Termination Fee” means any amount due to the Borrower or Vessel Owner from a Charterer or Charter Guarantor as a result of or in connection with the termination of a Charter.

Charterer” means any charterer of a Collateral Vessel, and “Charterer” shall mean any of them.

Charterer’s Undertaking” means, in respect of any Collateral Vessel which is subject to a Charter which is a demise or bareboat charter, an undertaking from the Charterer in favor of the Security Trustee in substantially the form set out in Exhibit E (or in such other form as the Security Trustee and Borrower may agree).

Classification Society” means Lloyds Register of Shipping, DNV GL, or any other member of the International Association of Classification Societies.

Closing Date” means the date of the Initial Credit Agreement.

Code” means the Internal Revenue Code of 1986.

Collateral Vessel” means each or any, as the context may require, of Identified Vessels and the Additional Vessels which are from time to time the subject of a Borrowing or a Borrowing Request or which are otherwise mortgaged or over which security is granted to secure Program Debt, and any Substitute Vessel that has satisfied the requirements of Section 6.05, but excluding any Collateral Vessel which has been sold and which no longer constitutes part of the Security, in each case in accordance with this Agreement.

Collateral Vessel Delta” means for each Collateral Vessel, the percentage difference between (i) that Collateral Vessel’s Average Efficiency Ratio for the relevant Delta Test Period, and (ii) the then current and applicable IMO Decarbonization Trajectory (for a vessel’s average efficiency ratio) expressed as a positive or negative percentage (+/-)% as calculated by the Lead Sustainability Coordinator with reference to the Decarbonization Certificate and the Compliance Data, on each Delta Test Date per the formula below:

 

LOGO

where [GRAPHIC APPEARS HERE] is the required average efficiency ratio for the ship type and size class for the relevant calendar year period as determined by the related IMO Decarbonization Trajectory. For the sake of clarity, a positive Collateral Vessel Delta means that a Collateral Vessel is misaligned and above the then current and applicable IMO Decarbonization Trajectory (for a vessel’s average efficiency ratio). A zero or negative Collateral Vessel Delta means that a Collateral Vessel is aligned and on or below the then current and applicable IMO Decarbonization Trajectory (for a vessel’s average efficiency ratio).

Collection Account” means the account of the Borrower maintained with Bank of Montreal with account number 0004-4624-914.

 

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Commitment Fee” means the fees payable by the Borrower pursuant to Sections 2.09(b) and (c).

Commitments” means the Term Loan Commitments.

Communications” has the meaning specified in Section 9.01(d)(ii).

Compliance Certificate” means the form of certificate attached at Exhibit B.

Compliance Data” means all information necessary for and/or reasonably requested by the Lead Sustainability Coordinator, in order for the Lead Sustainability Coordinator (i) to calculate the AER and/or the Collateral Vessel Delta, including, without limitation, all ship fuel oil consumption data required to be collected and reported in accordance with Regulation 22A of Annex VI and any Statement of Compliance provided by a Recognized Organization, in each case relating to any relevant Collateral Vessel for the relevant Delta Test Period, and (ii) to verify the existence and suitability of a Sustainability Linked Charter Mechanism in a Qualifying Charter Contract, including, without limitation, the relevant extracts (certified by a Responsible Officer of the Borrower) of the provisions of the corresponding Qualifying Charter Contracts, in each case relating to any relevant vessel owned by the Guarantor Group for the relevant Delta Test Period.

Concentration Limit Event” means the occurrence and continuance of any breach of the Concentration Limit Requirements.

Concentration Limit Requirements” has the meaning specified in Schedule 2.02.

Concentration Test Date” means each of the following dates: (a) each Borrowing Date; (b) each Vessel Substitution Date; (c) each Vessel Disposition Date; (d) any date on which a Vessel Owner proposes entering into a new Eligible Charter in respect of a Collateral Vessel; and (e) each other Test Date.

Consolidated Tangible Net Worth” means, as of any date of determination, for the Guarantor on a consolidated basis, total shareholders’ equity as reported in the most recently delivered balance sheet of the Guarantor and its consolidated Subsidiaries adjusted by:

(a) adding any subordinated debentures (being convertible debentures and other equity linked instruments which are subordinate to the rights of its unsecured creditors generally and which are akin to equity), mezzanine equity and redeemable shares;

(b) adding the amount referred to in Schedule 1.01 for the date of such balance sheet (as the same may be adjusted from time to time to reflect the sale of any of the vessels referred to in Schedule 1.01 whether or not they are Collateral Vessels or Collateral Vessels at the date of their sale, following the date of this Agreement);

(c) deducting any amount attributable to goodwill or any other intangible asset; and

(d) reflecting any variation in the amount of the issued share capital of the Guarantor since the date of such balance sheet.

Contracted Net Cash Flow” means, in respect of any Collateral Vessel and Eligible Charter, the contracted cash flow payable to the applicable Vessel Owner under such Eligible Charter, reduced by US$6,800 per day (which amount shall be escalated on an annual basis at the LTM Rate);

 

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provided that such reduction shall not apply to the calculation of the Contracted Net Cash Flow for any Collateral Vessel which is subject to a bareboat or demise charter; and provided further that Contracted Net Cash Flow in respect of any Collateral Vessel and Eligible Charter and any extension period shall be deemed to be zero to the extent that, as of the relevant date, the applicable contracted cash flow payable during such extension period (or part thereof) is uncertain or is not capable of being conclusively calculated.

Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings analogous thereto.

Co-Sustainability Coordinators” means each of Citibank, N.A., Bank of Montreal and Wells Fargo Bank, N.A., in their respective capacities as co-sustainability coordinators.

Credit Extension” means a Borrowing.

DCF Value” means the sum of (i) the Present Value of Contracted Net Cash Flow in respect of the relevant Collateral Vessel, plus (ii) the Terminal Value of such Collateral Vessel.

Debtor Relief Laws” means the Bankruptcy Code of the United States of America, 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.

Debtor Relief Plan” means a plan of reorganization or plan of liquidation pursuant to any Debtor Relief Laws.

Decarbonization Certificate” means the form of certificate attached at Exhibit D.

Deed of Covenants” means, in respect of a Collateral Vessel, the deed of covenants entered into or to be entered into by the relevant Vessel Owner and the Security Trustee collateral to the Mortgage over that Collateral Vessel.

Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

Default Rate” means an interest rate (before as well as after judgment) equal to the applicable interest rate set forth in Section 2.08(a) plus 2.00% per annum.

Defaulting Lender” means, subject to Section 2.20(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within two Business Days of the date when due, (b) has notified the Borrower or the Administrative Agent in writing that it does not intend to comply

 

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with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within two (2) Business Days after request by the Borrower or the Administrative Agent, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans, or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, or (iii) become the subject of a Bail-in Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from (A) the jurisdiction of courts within the United States, or (B) with respect to any Lender that is otherwise subject to the jurisdiction of courts outside the United States, the jurisdiction of such courts, or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.20(b)) upon delivery of written notice of such determination to the Borrower and each Lender.

Delta Test Date” means June 30, 2021 and thereafter each anniversary of such date in each subsequent calendar year provided that if any such date shall not be a Business Day, the relevant Delta Test Date shall be the immediately succeeding Business Day.

Delta Test Period” means the twelve (12) calendar month period commencing on January 1 ending on December 31 immediately prior to the relevant Delta Test Date.

Determination Date” means the last day of each of February, May, August and November in each year.

Dollar” and “$” mean lawful money of the United States.

DSCR Cash Sweep Event” means, as of any date of determination, the failure of the DSCR Ratio as of such date to be at least equal to 1.25:1.0x.

DSCR Ratio” means, with respect to the last two fiscal quarters for the Borrower, the ratio of: (a) EBITDA of the Borrower for such period, to (b) the aggregate amount of scheduled principal and interest payable (excluding any final payments due at maturity) in respect of Program Debt during the applicable period (whether or not actually paid during such period and disregarding any voluntary prepayments made at the Borrower’s election in accordance with Section 2.05(b)(ii)), plus any Commitment Fees payable during such period, plus any amounts paid by the Borrower during such period under any Hedging Agreements.

Earnings” means, in respect of a Collateral Vessel, all present and future moneys and claims which are earned by or become payable to or for the account of the Borrower or Vessel Owner in connection with the operation or ownership of that Collateral Vessel and including but not limited to: (a)

 

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freights, passage and hire moneys (howsoever earned); (b) remuneration for salvage and towage services; (c) demurrage and detention moneys; (d) all moneys and claims in respect of the requisition for hire of that Collateral Vessel; (e) payments received in respect of any off-hire insurance; (f) payments received pursuant to any Charter Guarantee relating to that Collateral Vessel; and (g) Charter Termination Fees or other payments in respect of the termination of any Charter, including without limitation, pursuant to legal proceedings, arbitration or other settlement arrangements.

EBITDA” means the net income of the Guarantor (on a consolidated basis) or the Borrower, as applicable, for a Measurement Period as adjusted by:

(a) adding back taxation;

(b) adding back Interest Expenses;

(c) taking no account of any extraordinary item;

(d) excluding any amount attributable to minority interests;

(e) adding back depreciation and amortization, including amounts relating to operating leases but with the exception of amortization of dry-docking costs;

(f) adding back non-cash expenses and deducting non-cash gains, including mark to market on Hedging Agreements and any other financial instruments and stock based compensation;

(g) adding bareboat charter fees and deducting bareboat related interest income from leasing;

(h) taking no account of any revaluation of an asset or any loss or gain over book value, whether or not arising on the disposal of an asset (otherwise than in the ordinary course of trading) by the Guarantor or the Borrower, as applicable, during that Measurement Period; and

(i) adding proportionate distributions from unconsolidated entities to the Guarantor or the Borrower, as applicable.

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

EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

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

 

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EEOI” means the Energy Efficiency Operational Indicator, developed by the International Maritime Organization in order to allow shipowners to measure the fuel efficiency of a ship in operation.

Eligibility Criteria” means: (a) such vessel shall be a container vessel that satisfies the requirements in respect of a Collateral Vessel set out in this Agreement; (b) such vessel shall be owned by (and not leased or chartered to) a Vessel Owner on the Borrowing Date; (c) its inclusion as a Collateral Vessel shall not give rise to a Default, a Concentration Limit Event, a BB Event or a DSCR Cash Sweep Event; and (d) it and any contract of employment or charter for such vessel shall comply with all requirements set out in the Loan Documents as if it was a Collateral Vessel and its owner was a Vessel Owner.

Eligible Assignee” as the meaning given to it in Section 9.04(b).

Eligible Charter” shall mean any firm contract for the employment of a Collateral Vessel with a Person other than a member of the Guarantor Group which has a remaining fixed term of not less than 3 months (which shall include any extension options which (i) if at the option of the Charterer, have been exercised, (ii) if at the option of the Vessel Owner, have or have not yet been exercised and (iii) are automatically exercised (without any condition, requirement or other arrangement whereby such extension will not occur other than a determination from the Vessel Owner otherwise)), and shall include any charter providing the applicable Vessel Owner with a termination right.

Environmental Approvals” means any permit, license, approval, ruling, variance, exemption or other authorization required under applicable Environmental Laws.

Environmental Laws” means any and all federal, state, local, and foreign statutes, Laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions, including all common law, relating to pollution or the protection of health, safety or the environment or the release of any materials into the environment, including those related to Hazardous Materials, air emissions, discharges to waste or public systems and health and safety matters.

Environmental Liability” means any liability or obligation, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), directly or indirectly, resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment, disposal or permitting or arranging for the disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

Environmental Representative” means each Vessel Owner and the Manager together with their respective employees and all of those persons for whom such Vessel Owner or the Manager is responsible under any Applicable Law in respect of any activities undertaken in relation to any of the Collateral Vessels.

Equity Interests” means, as to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

 

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

Event of Default” has the meaning specified in Article VII.

Excess Risks” means, in respect of a Collateral Vessel: (a) the proportion of claims for general average, salvage and salvage charges which are not recoverable as a result of the value at which that Collateral Vessel is assessed for the purpose of such claims exceeding her hull and machinery insured value; and (b) collision liabilities not recoverable in full under the hull and machinery insurance by reason of those liabilities exceeding such proportion of the insured value of that Collateral Vessel as is covered by the hull and machinery insurance.

Excluded Collateral Vessels” means each of:

(a) any Collateral Vessel with respect to which (i) any Security Document to which such Collateral Vessel or the applicable Vessel Owner is subject ceases to be valid in any material respect or (ii) any Security Document creating a Security Interest in such Collateral Vessel or the applicable Vessel Owner in favor of the Security Trustee ceases to provide a perfected first priority security interest in favor of the Security Trustee in such Collateral Vessel or the applicable Vessel Owner as a result of the act or inaction of an Obligor; and

(b) any Collateral Vessel with respect to which the registration at the registry of any Approved Flag State is cancelled or any Collateral Vessel that is arrested or otherwise detained and not released within thirty (30) days.

Excluded Taxes” means 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, 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), and (b) any withholding Taxes imposed under FATCA.

FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively 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)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.

Federal Funds Effective Rate” means, for any day, the greater of (a) the rate calculated by the Federal Reserve Bank of New York based on such day’s Federal funds transactions by depositary institutions (as determined in such manner as the Federal Reserve Bank of New York shall set forth on its public website from time to time) and published on the next succeeding Business Day by the Federal Reserve Bank of New York as the Federal funds effective rate and (b) 0%.

Federal Reserve Board” means the Board of Governors of the Federal Reserve System of the United States.

 

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Fee Letters” means any letter between (inter alios) and Finance Party and any Obligor which states that it is a “Fee Letter” for the purposes of this Agreement and “Fee Letter” means any of them.

Fees” means the Commitment Fee and other fees payable pursuant to any Fee Letter.

Finance Party” means, collectively, each Lender, any Receiver and any Administrative Party.

Financial Officer” means, as to any Person, the chief financial officer, principal accounting officer, treasurer or controller of such Person.

GAAP” means, subject to Section 1.03, United States generally accepted accounting principles as in effect as of the date of determination thereof.

General Assignment” means in respect of a Collateral Vessel, the assignment of its Eligible Charter, any Charter Guarantee, any Requisition Compensation and the Earnings granted or to be granted by the relevant Vessel Owner in favor of the Security Trustee, together with any and all notices and acknowledgements entered into in connection therewith.

Global Coordinator” means Citibank, N.A., in its capacity as global coordinator, and left lead mandated lead arranger and joint-bookrunner.

Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state 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 (including any supra-national bodies such as the European Union or the European Central Bank).

Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part) or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien); provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

 

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Guarantor Financial Covenants” means the requirements set forth in Section 6.09(c) to (f).

Guarantor Group” means the Guarantor and each of its Subsidiaries.

Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes, and other substances or wastes of any nature regulated under or with respect to which liability or standards of conduct are imposed pursuant to any Environmental Law.

HK Collection Account” means the account of the Borrower maintained with Citibank, N.A., Hong Kong Branch with account number 1004151018.

Identified Vessels” means the vessels referred to in Exhibit C.

IMO Decarbonization Trajectory” means the standard decarbonization trajectories produced or to be produced (as the case may be) from time to time by the Secretariat of the Poseidon Principles for each ship type and size class, being a representation of how many grams of CO2 a single vessel can emit to move one tonne of goods one nautical mile (gCO2/tnm) over the relevant time horizon, and on any Delta Test Date the IMO Decarbonization Trajectory shall be the most recent standard decarbonization trajectory which is applicable to the relevant Delta Test Period. The IMO Decarbonization Trajectory measured with reference to average efficiency ratio for containerships as of the date hereof (and as may be updated from time to time) is as per below:

 

Size (TEU)

   2020      2021      2022      2023      2024      2025      2026  

0-999

     17.663577        17.194349        16.725121        16.255893        15.786665        15.317437        14.848209  

1,000-1,999

     15.480516        15.069280        14.658045        14.246809        13.835574        13.424338        13.013103  

2,000-2,999

     10.429868        10.152802        9.875735        9.598669        9.321602        9.044536        8.767469  

3,000-4,999

     8.677976        8.447448        8.216920        7.986392        7.755864        7.525336        7.294808  

5,000-7,999

     8.199880        7.982053        7.764225        7.546398        7.328570        7.110743        6.892915  

8,000-11,999

     6.982743        6.797249        6.611754        6.426260        6.240765        6.055270        5.869776  

12,000-14,500

     4.844465        4.715773        4.587082        4.458390        4.329698        4.201006        4.072314  

> 14,500

     4.844465        4.715773        4.587082        4.458390        4.329698        4.201006        4.072314  

Incremental Commitment” has the meaning specified in Section 2.21(a).

Incremental Commitment Effective Date” has the meaning specified in Section 2.21(c).

 

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Incremental Lender” has the meaning specified in Section 2.21(b).

Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(b) all direct or contingent obligations of such Person arising under (i) letters of credit (including standby and commercial), bankers’ acceptances and bank guaranties and (ii) surety bonds, performance bonds and similar instruments issued or created by or for the account of such Person;

(c) net obligations of such Person under any Hedging Agreement;

(d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(f) any agreement treated as a finance or capital lease in accordance with GAAP; and

(g) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Hedging Agreement on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any Indebtedness of any Person for purposes of clause (e) that is expressly made non-recourse or limited-recourse (limited solely to the assets securing such Indebtedness) to such Person shall be deemed to be equal to the lesser of (i) the aggregate principal amount of such Indebtedness and (ii) the fair market value of the property encumbered thereby as determined by such Person in good faith.

Indemnified Taxes” means (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 Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.

Indemnitee” has the meaning specified in Section 9.03(b).

Information” has the meaning specified in Section 9.12.

Initial Credit Agreement” means that certain Credit Agreement dated as of October 14, 2020 by and among certain of the parties hereto, as in effect immediately prior to the Restatement Date.

 

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Insurances Assignment” means, in respect of a Collateral Vessel, the assignment of the Obligatory Insurances granted or to be granted in favor of the Security Trustee by the relevant Vessel Owner together with any and all notices and acknowledgments entered into in connection therewith.

Insurers” means the underwriters or insurance companies with whom any Obligatory Insurances are effected and the managers of any protection and indemnity or war risks association in which any or the Collateral Vessels may at any time be entered.

Intercreditor Agreement” means the intercreditor and proceeds agreement dated as of May 15, 2019, as amended and restated on or about the Restatement Date among, inter alios, the Borrower, the Guarantor, the Administrative Agent and the Security Trustee (as further amended and/or restated from time to time).

Interest and Principal Coverage Ratio” means, as at any date of determination and with respect to any period, the ratio of EBITDA for such period to Interest and Principal Expense for such period.

Interest and Principal Expense” means all Interest Expense incurred and all scheduled payments of principal (excluding any final payment thereof due on the maturity date thereof) made by the Guarantor and its consolidated Subsidiaries during a Measurement Period.

Interest Expense” means all cash interest and cash commitment fees incurred by the Guarantor or the Borrower, as applicable, and its consolidated Subsidiaries during a Measurement Period.

Interest Payment Date” means each Payment Date and the Maturity Date.

Interest Period” means, with respect to each Borrowing and the Loans constituting the same, the period commencing on the relevant Borrowing Date and ending on the next Interest Payment Date, and thereafter each period commencing on the last day of the preceding Interest Period and ending on the Interest Payment Date immediately succeeding such last day provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period, and (iii) no Interest Period shall extend beyond the relevant Maturity Date.

Interpolated Rate” means, at any time, the rate per annum determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the rate as displayed on the applicable Bloomberg page (or on any successor or substitute page or service providing quotations of interest rates applicable to dollar deposits in the London interbank market comparable to those currently provided on such page, as determined by the Administrative Agent from time to time; in each case the “Screen Rate”) for the longest period (for which that Screen Rate is available) that is shorter than the Interest Period and (b) the Screen Rate for the shortest period (for which that Screen Rate is available) that exceeds the Interest Period, in each case, at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.

 

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Intra Group Loan” means:

(a) any loan or other Indebtedness advanced by an Obligor, as lender, to any other Obligor (other than the Guarantor), as borrower; and

(b) any loan or other Indebtedness owing by the Borrower to a member of the Guarantor Group which is, as at the Closing Date, the shareholder of the owner of m.v. “Seaspan Thames”, “CMA CGM Tuticorin”, “MOL Brilliance”, “MOL Belief”, “YM World”, YM Wondrous”, “MOL Beauty” or “YM Wreath” or any other vessel owned, as at the Closing Date, directly or indirectly by Greater China Intermodal Investments LLC for purposes of adding a Collateral Vessel to the Collateral.

Intra Group Loan Agreement” means any agreement in respect of an Intra Group Loan .

IRS” means the United States Internal Revenue Service.

ISM Code” means the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organization Assembly as Resolutions A.741(18) and A.788(19), as the same may have been or may be amended or supplemented from time to time. The terms “safety management system”, “Safety Management Certificate”, “Document of Compliance” and “major non-conformity” shall have the same meanings as are given to them in the ISM Code.

ISP” means the International Standby Practices, International Chamber of Commerce Publication No. 590 (or such later version thereof as may be in effect at the applicable time).

ISPS Code” means the International Ship and Port Facility Security Code adopted by the International Maritime Organization Assembly as the same may have been or may be amended or supplemented from time to time.

Joinder Agreement” means a joinder or similar agreement entered into by any Person (including any Lender) under Section 2.21 pursuant to which such Person shall provide an Incremental Commitment hereunder and (if such Person is not then a Lender) shall become a Lender party hereto.

Laws” means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

Lead Sustainability Coordinator” means Société Générale, Hong Kong Branch, in its capacity as lead sustainability coordinator.

Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall have become party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.

LIBO Rate” means, for any Interest Period with respect to any Borrowing, the greater of (a) the rate appearing on the applicable Bloomberg page (or on any successor or substitute page or service providing quotations of interest rates applicable to dollar deposits in the London interbank market comparable to those currently provided on such page, as determined by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement

 

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of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period; provided that (i) if such rate is not available at such time for any reason, then the “LIBO Rate” for such Interest Period shall be the Interpolated Rate, and (ii) if the Interpolated Rate is not available, the “LIBO Rate” for such Interest Period shall be the Reference Bank Rate and (b) 0%.

Lien” means any mortgage, pledge, hypothecation, collateral assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

Loans” means the Term Loan.

Loan Documents” means, collectively, this Agreement, the Intercreditor Agreement, the Hedging Agreements (in relation to the Loans), any subordination agreement entered into in connection with Section 5.02(g) of the Intercreditor Agreement, the Security Documents, any Borrowing Request, the Fee Letters and any other documents entered into in connection herewith.

LTM Rate” means the most recent US CPI rate as published by the U.S. Bureau of Labor Statistics, provided that the applicable indexation will have a floor of 0% p.a. and a cap of 3% p.a..

Management Agreement” means each management agreement between a Vessel Owner and the Manager in respect of a Collateral Vessel, as the same may be amended from time to time in accordance with this Agreement.

Management Agreement Assignment” means each assignment of a Management Agreement granted or to be granted in favor of the Security Trustee by a Vessel Owner with any and all notices and acknowledgements entered into in connection therewith, one to be entered into between the Manager and the relevant Vessel Owner.

Manager” means Seaspan Management Services Ltd. of Clarendon House, 2 Church Street, Hamilton, HM 11, Bermuda or such other professional manager or managers as may be approved by the Administrative Agent from time to time, provided that V.Group, Anglo-Eastern and Bernhard Schulte Shipmanagement are so approved for these purposes.

Manager’s Undertaking” means, in respect of each Collateral Vessel, a letter of undertaking to be issued by the Manager to the Security Trustee confirming it shall not make a claim to security ranking ahead of the Lenders’ security in respect of that Collateral Vessel in form and substance satisfactory to the Administrative Agent.

Mandated Lead Arrangers” means each of Bank of Montreal, Société Générale, Hong Kong Branch, BNP Paribas, National Australia Bank Limited, Bank of America, N.A. and Wells Fargo Bank, N.A. in their respective capacities as mandated lead arrangers and joint-bookrunners.

Margin” means, for any Loan, (i) from the Closing Date until September 4, 2021, 2.25% per annum, and (ii) for any Margin Period thereafter, the aggregate of:

 

  (a)

the Margin applicable in the immediately preceding Margin Period; and

 

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  (b)

(i) any Applicable Performance Margin Adjustment for the relevant Margin Period, minus (ii) any Applicable Charter Margin Adjustment in the immediately preceding Margin Period, plus (iii) any Applicable Charter Margin Adjustment for the relevant Margin Period, save that the collective aggregate of the foregoing (b)(i), (b)(ii) and (b)(iii) may not (A) exceed 0.05% per annum or (B) be less than -0.05% per annum, in each case for any single Margin Period (relative to the prior Margin Period),

provided that, the collective aggregate of the foregoing paragraphs (a) and (b) shall not (X) exceed 2.35% per annum for any single Margin Period, or (Y) be less than 2.15% per annum for any single Margin Period,

and provided further that, where the Borrower fails to deliver any of the Compliance Data, other items contemplated by Section 5.34(a) hereof and/or any Decarbonization Certificate required by this Agreement, in order to determine any Applicable Charter Margin Adjustment for the relevant Margin Period, the foregoing paragraph (b) shall be replaced with and applied as follows:

 

  “(b)

(i) 0.025% per annum, minus (ii) any Applicable Charter Margin Adjustment in the immediately preceding Margin Period, save that the collective aggregate of the foregoing (b)(i) and (b)(ii) may not (A) exceed 0.05% per annum or (B) be less than -0.05% per annum, in each case for any single Margin Period (relative to the prior Margin Period),”.

Margin Period” means (i) for the first Margin Period, the period commencing on the Closing Date and ending on September 4, 2021, and (ii) for any subsequent period, each 12 month period commencing on the September 5 Interest Payment Date which follows a Delta Test Date and ending on September 4, the following year (or if earlier, the Maturity Date).

Market Value” means, in respect of any Collateral Vessel, the average of the two values of such Collateral Vessel provided by the Approved Valuers.

Material Adverse Effect” means a material adverse effect on (a) the ability of the Borrower to perform its Obligations, (b) the legality, validity, binding effect or enforceability against the Borrower of any Loan Document to which it is a party or (c) the rights, remedies and benefits available to, or conferred upon, the Administrative Parties, any Lender or any Hedge Counterparties under any Loan Documents.

Maturity Date” means the date falling six (6) years after the Closing Date or, if such date is not a Business Day, on the immediately preceding Business Day.

Maximum Rate” has the meaning specified in Section 9.14.

Measurement Period” means, at any time, the last four fiscal quarters for the Guarantor or the Borrower, as applicable.

Mortgage” means, in respect of a Collateral Vessel, the first priority or first preferred ship mortgage, each given or to be given by the relevant Vessel Owner in favor of the Security Trustee and registered with the Approved Flag State registry of such Collateral Vessel.

Non-Consenting Lender” means any Lender that does not approve any consent, waiver or amendment that (a) requires the approval of all or all affected Lenders in accordance with the terms of Section 9.02 and (b) has been approved by the Required Lenders.

 

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Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.

Non-Extension Notice Date” has the meaning specified in Section 2.07(b).

Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, the Borrower arising under any Loan Document or Hedging Agreement or otherwise with respect to any Loan, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against the Borrower or any other Obligor thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding. Without limiting the foregoing, the Obligations include (a) the obligation to pay principal, interest, charges, expenses, fees, indemnities and other amounts payable by the Borrower under any Loan Document or Hedging Agreement and (b) the obligation of the Borrower to reimburse any amount in respect of any of the foregoing that the Administrative Agent or any Lender, in each case in its sole discretion, may elect to pay or advance on behalf of the Borrower.

Obligatory Insurances” means, in respect of each Collateral Vessel: (a) all contracts and policies of insurance and all entries in clubs and/or associations which are from time to time required to be effected and maintained in accordance with this Agreement in respect of each of the Collateral Vessels; and (b) all benefits under the contracts, policies and entries under subsection (a) above and all claims in respect of them and the return of premiums.

Obligor” means the Borrower, the Guarantor and the Vessel Owners.

OFAC” has the meaning specified in Section 3.16(a).

Organizational Documents” means (a) as to any corporation, the charter or certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction), (b) as to any limited liability company, the certificate or articles of formation or organization and operating or limited liability agreement and (c) as to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

Original Financial Statements” means the consolidated financial statements of the Guarantor for the financial year ended 31 December 2020.

Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document.

Participant” has the meaning specified in Section 9.04(d).

Participant Register” has the meaning specified in Section 9.04(d).

 

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PATRIOT Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).

Payment Date” means each March 5, June 5, September 5, December 5 commencing on June 5, 2021, provided that if any such date is not a Business Day, the relevant Payment Date shall be the immediately succeeding Business Day.

Payment Disruption Event” means either or both of:

(a) a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Loan Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or

(b) the occurrence of any other event which results in a disruption (of a technical or systems related nature) to the treasury or payments operations of a Party preventing that, or any other Party: (i) from performing its payment obligations under the Loan Documents; or (ii) from communicating with other Parties in accordance with the terms of the Loan Documents,

(and which (in either such case)) is not caused by, and is beyond the control of, the Party whose operations are disrupted.

Permitted Liens” means, in respect of a Collateral Vessel: (a) Security Interests created by the Security Documents; (b) liens for unpaid crew’s wages including wages of the master and stevedores employed by the Collateral Vessel, outstanding in the ordinary course of trading for not more than one calendar month after the due date for payment; (c) liens for salvage; (d) liens for classification or scheduled dry docking or for necessary repairs to that Collateral Vessel that in each case are outstanding for not more than one month; (e) liens for collision; (f) liens for master’s disbursements incurred in the ordinary course of trading; (g) statutory and common law liens of carriers, warehousemen, mechanics, suppliers, materials men, repairers or other similar liens, including maritime liens, in each case arising in the ordinary course of business, outstanding for not more than one month and (h) liens for damages arising from maritime torts which are unclaimed, or are covered by insurance and any deductible applicable thereto, or in respect of which a bond or other security has been posted on behalf of the relevant Vessel Owner with the appropriate court or other tribunal to prevent the arrest or secure the release of such Collateral Vessel from arrest; provided that in the case of subsections (b) to (g) inclusive the amounts which give rise to such liens are paid when due (or, in the case of subsections (b) or (g) above, within one month of such amount being outstanding) or, if not paid when due are being disputed in good faith by appropriate proceedings (and for the payment of which adequate reserves or security are at the relevant time maintained or provided), provided further that such proceedings, whether by payment of adequate security into court or otherwise, do not give rise to a material risk of the relevant Collateral Vessel or any interest therein being seized, sold, forfeited or otherwise lost or of criminal liability on an Indemnitee.

Platform” means Debt Domain, Intralinks, Syndtrak, DebtX or a substantially similar electronic transmission system.

Poseidon Principles” means the financial industry framework for assessing and disclosing the climate alignment of ship finance portfolios published in June 2019 as the same may be amended or replaced to reflect changes in applicable law or regulation or the introduction of or changes to mandatory requirements of the International Maritime Organization from time to time.

 

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Prepayment Notice” means a notice by the Borrower to prepay Loans, which shall be in such form as the Administrative Agent may approve.

Present Value of Contracted Net Cash Flow” means, in respect of any Collateral Vessel and Eligible Charter, the Contracted Net Cash Flow in respect thereof discounted using a discount rate of 10% per annum (or, where the Terminal Value provider is VesselsValue, 8% per annum).

Program Debt” has the meaning specified in the Intercreditor Agreement.

Program Debt Documents” means (a) the credit agreement dated 15 May 2019 between, among others, the Borrower, the Guarantor, the Administrative Agent and the Lenders (as defined therein) party thereto from time to time as amended and restated on or about the Restatement Date; (b) the credit agreement dated 30 December 2019 between, among others, the Borrower, the Guarantor, the Administrative Agent and the Lenders (as defined therein) party thereto from time to time, as amended and restated on or about the Restatement Date ((a) and (b) together being the “Existing Program Debt Documents”); and (c) any other Additional Debt Document.

Purchase Agreement” means, in respect of a Collateral Vessel, the memorandum of agreement or purchase agreement entered into or to be entered into between the relevant seller of such Collateral Vessel and the Vessel Owner, as buyer.

QCC Target Ratio” means in respect of any QCC Test Period, the proportion expressed as a percentage (Q) of (i) the number of Qualifying Charter Contracts which are executed and dated during that QCC Test Period (and, if elected by the Borrower, any Qualifying Charter Contracts which are extended or renewed during such period (such Qualifying Charter Contracts being referred to herein as “Renewals”)) and which contain a Sustainability Linked Charter Mechanism, to (ii) the total number of Qualifying Charter Contracts which are executed and dated during such QCC Test Period (and any Renewals) and calculated per the formula below:

 

LOGO

where SC is the number Qualifying Charter Contracts which are executed and dated during that QCC Test Period (and any Renewals) and which contain a Sustainability Linked Charter Mechanism and [GRAPHIC APPEARS HERE] is the total number Qualifying Charter Contracts which are executed and dated during the same QCC Test Period (and any Renewals).

QCC Test Date” means, at the election of the Lead Sustainability Coordinator, a Business Day falling on or before June 30, 2022 and thereafter each anniversary of such date in each subsequent calendar year provided that if any such date shall not be a Business Day, the relevant QCC Test Date shall be the immediately succeeding Business Day.

QCC Test Period” means the twelve (12) calendar month period commencing on January 1 and ending on December 31 immediately prior to the relevant QCC Test Date.

Qualifying Charter Contracts” means any firm contract for the employment of a vessel owned by a member of the Guarantor Group with a Person other than a member of the Guarantor Group, which has a remaining fixed term of not less than 12 months (which shall include any extension options which (i) if at the option of the Charterer, have been exercised, (ii) if at the option of the relevant vessel owner, have or have not yet been exercised and (iii) are automatically exercised (without any condition, requirement or other arrangement whereby such extension will not occur other than a determination from the relevant vessel owner otherwise)), and shall include any charter providing the applicable vessel owner with a termination right.

 

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Receiver” means a receiver or receiver and manager or administrative receiver of the whole or any part of the Security Assets appointed under any Security Document.

Recipient” means (a) the Administrative Agent or (b) any Lender, as applicable.

Recognized Organization” means, in respect of a Collateral Vessel, an organization approved by the maritime administration of the Collateral Vessel’s flag state to verify that the ship energy efficiency management plans of vessels registered in such flag state are in compliance with Regulation 22A of Annex Vl and to issue “statements of compliance for fuel consumption reporting” confirming that vessels registered in such flag state are in compliance with that regulation, including any Classification Society.

Reference Bank Rate” means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Administrative Agent at its request by the Reference Banks:

(a) (other than where paragraph (b) below applies) as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in the relevant currency and for the relevant period were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period; or

(b) if different, as the rate (if any and applied to the relevant Reference Bank and the relevant currency and period) which contributors to the applicable Screen Rate are asked to submit to the relevant administrator,

provided that if none or only one of the Reference Banks supplies a quotation, there shall be no Reference Bank Rate for the relevant Interest Period.

Reference Banks” means Citibank, N.A., Bank of Montreal and Wells Fargo Bank, N.A., or such banks as otherwise may be appointed from time to time by the Administrative Agent in consultation with the Lenders and with the Borrower.

Register” has the meaning specified in Section 9.04(c).

Related Contracts” means any or all of the following (as the context requires): (a) the Obligatory Insurances; (b) the Eligible Charters; (c) the Management Agreements; and (d) the Charter Guarantees.

Related Parties” means, with respect to any Person, such Person’s Affiliates, head office, other branches and regional offices, and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates, head office, other branches and regional offices.

Relevant Vessel” has the meaning specified in Section 4.02(a)(ii).

Relevant Vessel Owner” has the meaning specified in Section 4.02(a)(iii).

Removal Effective Date” has the meaning specified in Section 8.06(b).

 

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Repayment Schedule” means the repayment schedule prepared in accordance with Section 2.03.

Required Deductible Amount” means, in respect of the Obligatory Insurances for a Collateral Vessel, an amount not to exceed the following amounts:

(a) in respect of hull cover, US$1,000,000;

(b) in respect of crew cover, US$30,000;

(c) in respect of collision cover, US$150,000;

(d) in respect of cargo cover, US$78,000; and

(e) in respect of any other cover, US$150,000.

Required Insurance Amount” means, in respect of a Collateral Vessel, the higher of (a) the amount which is 120% of the product of (i) the proportion of the Market Value of such Collateral Vessel to the total Market Value of all Collateral Vessels, multiplied by (ii) the total outstanding amount of the Secured Obligations, and (b) the Market Value of such Collateral Vessel calculated as of the date on which such Collateral Vessel is added to the Security Assets and thereafter as of the date of the annual renewal of the relevant Obligatory Insurances.

Required Lenders” means, at any time, Lenders holding more than 50% of the aggregate principal amount of the Term Loan outstanding. The outstanding Loans and Commitments of any Defaulting Lender shall be disregarded in determining the “Required Lenders” at any time.

Requisition Compensation” means, in respect of a Collateral Vessel, all moneys or other compensation payable by reason of requisition for title to, or other compulsory acquisition of, that Collateral Vessel including requisition for hire.

Resignation Effective Date” has the meaning specified in Section 8.06(a).

Resolution Authority” means, an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.

Responsible Officer” means (a) the chief executive officer, president, executive vice president or a Financial Officer of the Borrower, (b) solely for purposes of the delivery of incumbency certificates and certified Organizational Documents and resolutions pursuant to Section 4.01, any vice president, secretary or assistant secretary of the Borrower and (c) solely for purposes of Borrowing Requests, certifying extracts of Qualifying Charter Contracts for the purposes of any Compliance Data, prepayment notices and notices for Commitment terminations or reductions given pursuant to Article II, any other officer or employee of the Borrower so designated from time to time by one of the officers described in clause (a) in a notice to the Administrative Agent (together with evidence of the authority and capacity of each such Person to so act in form and substance satisfactory to the Administrative Agent). Any document delivered hereunder that is signed by a Responsible Officer of the Borrower shall be conclusively presumed to have been authorized by all necessary corporate, partnership or other action on the part of the Borrower and such Responsible Officer shall be conclusively presumed to have acted on behalf of the Borrower.

 

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Restatement Date” means the date on which each of the conditions specified in Section 4.04 is satisfied (or waived in accordance with Section 9.02), such date being May 19, 2021.

Sanctioned Jurisdiction” means, at any time, a country or territory that is the subject of Sanctions.

Sanctioned Person” means, at any time, (a) any Person listed in, or acting on behalf of a Person listed in, any Sanctions related list maintained by any Sanctions Authority, (b) any Person located, organized, or resident in a Sanctioned Jurisdiction, or (c) any other subject of Sanctions, including, without limitation, any Person controlled or 50 percent or more owned in the aggregate, directly or indirectly, by any subject or subjects of Sanctions.

Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by any Sanctions Authority.

Sanctions Authority” means the United States (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, the U.S. Department of Commerce or through any existing or future statute or Executive Order), the United Kingdom (including, without limitation, Her Majesty’s Treasury), the European Union and any EU member state, the French Republic, the United Nations Security Council, Canada, Australia (including without limitation, the Department of Foreign Affairs and Trade) and Hong Kong Monetary Authority and any other governmental authority with jurisdiction over the Obligors.

Sanctions Target” means a Sanctioned Person or Sanctioned Jurisdiction.

Screen Rate” has the meaning specified in the definition of the term “Interpolated Rate”.

SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

Security Assets” means any asset which is the subject of a Security Interest created by a Security Document.

Security Documents” means: (a) the Mortgages; (b) the Deeds of Covenant; (c) the Insurances Assignments; (d) the Management Agreement Assignments; (e) the General Assignments; (f) the Account Charges; (g) the Manager’s Undertakings; (h) the Share Pledges; (i) any Charterer’s Undertakings, (j) any Additional Security; and (k) any other document designated as such in writing by the Borrower or any Vessel Owner and the Administrative Agent; in each case together with any and all notices and acknowledgements entered into and in connection therewith.

Security Interest” means any mortgage, pledge, lien, charge, assignment, hypothecation or security interest or any other agreement or arrangement having a similar effect.

Security Trustee” means UMB Bank, National Association.

Shareholders’ Equity” means, as of any date of determination, consolidated shareholders’ equity of the Borrower and its Subsidiaries as of such date determined in accordance with GAAP.

 

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Share Pledge” means, in relation to the Borrower and each Vessel Owner, each first priority charge, pledge or mortgage or equivalent over the shares in the Borrower or Vessel Owner (as the case may be) to be given by: (a) in the case of the Borrower, the Guarantor; and (b) in the case of each Vessel Owner, the Borrower, in each case in favor of and in form and substance satisfactory to the Security Trustee and “Share Pledges” means all such share pledges.

Statement of Compliance” means a Statement of Compliance related to fuel oil consumption pursuant to regulations 6.6 and 6.7 of Annex VI.

Subsidiary” of a Person means a corporation, partnership, limited liability company, association or joint venture or other business entity of which a majority of the Equity Interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time owned or the management of which is controlled, directly, or indirectly through one or more intermediaries, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

Substitute Vessel” has the meaning set forth in Section 6.05.

Sustainability Linked Charter Mechanism” means, in the sole opinion of the Lead Sustainability Coordinator, acting reasonably, a qualifying contractual provision of a Qualifying Charter Contract providing for the relevant charter rate to be increased and/or reduced, by an amount which is not less than 0.5% of the relevant initial charter rate, and where any such increase and reduction in the charter rate is subject to and dependent on the alignment of the relevant vessel’s carbon intensity, measured by that vessel’s AER, EEOI, or some other broadly accepted emissions metric for which the International Maritime Organization produces a related trajectory, with such trajectory.

Swap” means any trade or transaction entered into by the Borrower and a Hedge Counterparty under or pursuant to a Hedging Agreement.

Swap Termination Value” means, in respect of any one or more Swaps, after taking into account the effect of any legally enforceable netting agreement relating to such Swaps, (a) for any date on or after the date such Swaps have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swaps, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swaps (which may include a Lender or any Affiliate of a Lender).

Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

Terminal Value” means, in respect of any Collateral Vessel: (a) the present value (using a discount rate of 10% per annum) of the forward projected value for such Collateral Vessel as at the maturity of the relevant Eligible Charter (which shall, for these purposes, take account of any extension option which is included for the purposes of the definition of Eligible Charter for such Collateral Vessel) as provided by Maritime Strategies International Ltd; or (b) if the Borrower has elected that VesselsValue valuations shall be used for all Collateral Vessels on the applicable calculation date, the fixed age valuation for such Collateral Vessel as at the maturity of the relevant Eligible Charter (which shall, for these purposes, take account of any extension option which is included for the purposes of the definition of Eligible Charter for such Collateral Vessel) as provided by VesselsValue (with no discount rate applicable). Where the Eligible Charter of any Collateral Vessel has been extended and the Terminal Value on any Test Date would otherwise be calculated on the basis of valuations which pre-date such extension, the Borrower shall be permitted to obtain an updated valuation for such Collateral Vessel which shall be used for the purposes of calculating the Terminal Value of such Collateral Vessel.

 

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Term Lender” means each Lender having a Term Loan Commitment.

Term Loan” has the meaning set forth in Section 2.01.

Term Loan Availability Period” means the period from the Closing Date to but excluding the Term Loan Availability Termination Date.

Term Loan Availability Termination Date” means the date falling six (6) months after the Closing Date (or, if such date is not a Business Day, on the next preceding Business Day).

Term Loan Commitment” means, as to each Term Lender, the obligation of such Lender to make, on and subject to the terms and conditions hereof, a Term Loan to the Borrower pursuant to Section 2.01(b) in an aggregate principal amount up to but not exceeding the amount set forth opposite the name of such Lender in Schedule 2.01 under the heading “Term Loan Commitment” or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Term Loan Commitment, as applicable, as such amount may be reduced pursuant to Sections 2.05 or 2.06 or increased or reduced pursuant to assignments effected in accordance with Section 9.04.

Term Loan Required Payments” has the meaning given in Section 2.03(a)(i).

Test Date” means: (a) any BB Test Date; and (b) any Determination Date.

Total Assets” means, in respect of the Guarantor on a consolidated basis, the following, in each case as indicated on the most recently delivered financial statement of the Guarantor and its consolidated Subsidiaries:

(a) all of the assets of the types presented on its consolidated balance sheet; less

(b) assets under any vessel construction or ship purchase agreement (including novation and assignment and assumption agreements) that the Guarantor or any of its Subsidiaries is required to record on its books under GAAP even though such entity is no longer the legal owner of the vessel or legally obligated to take delivery of the vessel.

Total Borrowings” means, in respect of the Guarantor on a consolidated basis and without duplication, in each case as indicated on the most recently delivered financial statement of the Guarantor and its Subsidiaries, the aggregate of the following:

(a) the outstanding principal amount of any moneys borrowed; plus

(b) the outstanding principal amount of any acceptance under any acceptance credit; plus

(c) the outstanding principal amount of any bond, note, debenture or other similar instrument; plus

(d) the book values of indebtedness under a lease, charter, hire purchase agreement or other similar arrangement which would, in accordance with GAAP, be treated as a finance or capital lease; plus

 

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(e) the outstanding principal amount of all moneys owing in connection with the sale or discounting of receivables (otherwise than on a non-recourse basis or which otherwise meet any requirements for de-recognition under GAAP); plus

(f) the outstanding principal amount of any indebtedness arising from any deferred payment agreements arranged primarily as a method of raising finance or financing the acquisition of an asset (except trade payables); plus

(g) any fixed or minimum premium payable on the repayment or redemption of any instrument referred to in clause (c) above; and plus

(h) the outstanding principal amount of any indebtedness of any Person other than a Subsidiary of the Guarantor of a type referred to in the above clauses of this definition which is the subject of a guarantee (or other agreement by which recourse is granted to the Guarantor) given by the Guarantor to the extent that such guaranteed indebtedness is determined and given a value in respect of the Guarantor on a consolidated basis in accordance with GAAP.

Notwithstanding the foregoing, “Total Borrowings” shall not include (a) Indebtedness or obligations arising from derivative transactions, such as protecting against interest rate or currency fluctuations or (b) Indebtedness under any vessel construction or ship purchase agreement (including novation and assignment and assumption agreements) that the Guarantor is required to record on its books under GAAP even though the Guarantor is no longer the legal owner of the vessel or legally obligated to take delivery of the vessel.

Total Loss” means in relation to a Collateral Vessel:

(a) actual, constructive, compromised, agreed or arranged total loss of that Collateral Vessel;

(b) requisition for title or other compulsory acquisition of that Collateral Vessel otherwise than by requisition for hire;

(c) capture, seizure, arrest, detention, or confiscation of that Collateral Vessel by any government or by persons acting or purporting to act on behalf of any government or by any other person which deprives the Vessel Owner of that Collateral Vessel or as the case may be the Charterer of the use of that Collateral Vessel for more than sixty (60) days after that occurrence; and

(d) requisition for hire of that Collateral Vessel by any government or by persons acting or purporting to act on behalf of any government which deprives the Vessel Owner or as the case may be the Charterer of the use of that Collateral Vessel for a period of sixty (60) days, other than a Charter of the Collateral Vessel to a government or government agency approved by the Borrower and by the Administrative Agent.

UBO” means (a) any of Kyle Washington, Kevin Washington, Dennis Washington or any of their estate, spouse, and/or descendants; (b) any trust for the benefit of the persons listed in (a); (c) Fairfax Financial Holdings Limited; (d) an Affiliate of any of the persons listed in (a), (b) or (c); or (e) a combination of the foregoing.

 

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UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.

UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.

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

Unrelated Parties” has the meaning given in Section 3.35.

Vessel Disposition” has the meaning given to such term in Section 6.06.

Vessel Disposition Date” means the date of any Vessel Disposition in accordance with the requirements set forth in Section 6.06.

Vessel Owner” means any special purpose company that owns a Collateral Vessel and the entire issued share capital of which is acquired or to be acquired by the Borrower.

Vessel Owner Account” means, in respect of any Vessel Owner, any account in the name of the applicable Vessel Owner opened or to be opened with the Account Bank into which Earnings shall be paid, as more particularly described in the relevant Account Charge relating thereto.

Vessel Substitution Date” means the date of any vessel substitution in accordance with the requirements set forth in Section 6.05.

Wholly-Owned” means, as to a Subsidiary of a Person, a Subsidiary of such Person all of the outstanding Equity Interests of which (other than (a) director’s qualifying shares and (b) shares issued to foreign nationals to the extent required by Applicable Law) are owned by such Person and/or by one or more Wholly-Owned Subsidiaries of such Person.

Withholding Agent” means the Borrower and the Administrative Agent.

Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.

SECTION 1.02 Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall

 

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be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (e) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

SECTION 1.03 Accounting Terms; Changes in GAAP.

(a) Accounting Terms. Except as otherwise expressly provided herein, all accounting terms not otherwise defined herein shall be construed in conformity with GAAP as in effect on the Closing Date. Financial statements and other information required to be delivered by the Borrower to the Lenders pursuant to Sections 5.01(a) and 5.01(b) shall be prepared in accordance with GAAP as in effect at the time of such preparation. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of the Borrower and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 on financial liabilities shall be disregarded. Notwithstanding any changes in GAAP after the Closing Date, any lease of the Obligors that would be characterized as an operating lease under GAAP as in effect on the Closing Date (whether such lease is entered into before or after the Closing Date) shall not constitute Indebtedness or a capital lease (and shall continue to be characterized as an operating lease) under this Agreement or any other Loan Document as a result of such changes in GAAP.

(b) Changes in GAAP. If the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Closing Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

SECTION 1.04 Rates. The Administrative Agent does not warrant or accept responsibility for, and shall not have any liability with respect to, the administration, submission or any other matter related to the rates in the definition of “LIBO Rate” or with respect to any comparable or successor rate thereto.

SECTION 1.05 Restricted Lenders.

(a) Notwithstanding any other provision of this Agreement, in relation to each Lender that is incorporated in Germany and any other Lender that notifies “the Administrative Agent that this clause applies to it (each a “Restricted Lender”), Sections 3.22, 5.24(d), 6.13 and any other sanctions provision in this Agreement (together the “Sanctions Provisions”) will not apply for the benefit of that Restricted Lender to the extent that the Sanctions Provisions would result in any violation of or liability under EU Regulation (EC) 2271/96 (in conjunction with (EU) 2018/1100) or section 7 of the German Außenwirtschaftsverordnung (foreign trade rules) or a similar anti-boycott statute in any other jurisdiction.

 

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(b) Solely in the event of, or on the basis of, any breach of any Sanctions Provisions as result solely of Sanctions imposed by any Sanctions Authority (other than the United Nations, the European Union or Germany) and for which such Sanctions Provisions do not apply in this case for the benefit of a Restricted Lender in accordance with Section 1.05(a) (a “Sanctions Breach”), the parties hereto agree that such Restricted Lender will not be entitled to:

(i) declare that its Commitment is cancelled or require a mandatory prepayment of its part of the Loans in accordance with Section 2.06(b) (Illegality) of this Agreement; or

(ii) assert any other rights under the Loan Documents on the sole basis of such Sanctions Breach.

(c) With respect to any proposal to enforce, or to instruct the Administrative Agent to enforce, a Sanctions Breach, a Restricted Lender may abstain or vote against any proposal to take action in relation to a Sanctions Breach, but will not vote in favour of any such proposal.

(d) Nothing in this Section 1.05 will affect the rights of a Restricted Lender under any other provision of the Loan Documents or its right to benefit as a Lender from any action taken by the Administrative Agent or the other Lenders in relation to the Loan Documents (whether in relation to any of the Sanctions Provisions or otherwise).

ARTICLE II

COMMITMENTS

SECTION 2.01 Term Loan Commitments.

(a) Term Loan. Each Term Lender severally, and not jointly with the other Term Lenders, agrees, upon the terms and subject to the conditions herein set forth, to make term loans denominated in US Dollars (the “Term Loan”) available to Borrower during the Term Loan Availability Period in an aggregate principal amount up to but not exceeding such Term Lender’s Term Loan Commitment. The amount of each Borrowing under the Term Loan shall be less than or equal to the Advance Rate therefor. Amounts repaid or prepaid with respect to the Term Loan may not be re-borrowed. Unless previously terminated, the Term Loan Commitment of each Term Lender shall automatically terminate at 5:00 p.m. (New York City time) on the Term Loan Availability Termination Date.

(b) Procedure for Term Loan Borrowing. Borrower may make up to 6 Borrowings under the Term Loan during the Term Loan Availability Period, provided that Borrower shall give the Administrative Agent a revocable Borrowing Request (which must be received by the Administrative Agent prior to 12:00 Noon, New York City time three Business Days prior to the requested Borrowing Date), specifying (i) the amount to be borrowed, (ii) the applicable Collateral Vessel(s) and (iii) the requested Borrowing Date. Each borrowing of the Term Loan shall be in an amount equal to at least US$10,000,000. Upon receipt of any such Borrowing Request from Borrower, the Administrative Agent shall promptly notify each Lender thereof. Each Term Lender will make the amount of its pro rata share of the Term Loan advance available to the Administrative Agent for the account of the Borrower prior to 12:00 Noon, New York time, on the Borrowing Date requested by Borrower in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the Borrower by

 

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the Administrative Agent crediting the Collection Account or, at the Borrower’s option, by effecting a wire transfer of such amounts to an account designated by the Borrower to the Administrative Agent. If the Borrower revokes any Borrowing Request, the Borrower shall compensate the Lenders in connection with such revocation in accordance with Section 2.13.

(c) Prefunding Arrangements.

(i) The Borrower shall be permitted to request in any Borrowing Request that the relevant Borrowing be credited to an escrow account (the “Escrow Account”) held by Citibank, N.A. as escrow agent (the “Escrow Agent”) under an escrow agreement in form and substance satisfactory to the Administrative Agent and the Lenders (the “Escrow Agreement”). In such circumstances, the requirement to satisfy the conditions set out in Section 4.02 shall be deferred and such conditions (together with any conditions to the release of the Borrowing from the Escrow Account under the Escrow Agreement) shall instead be required to be satisfied prior to, or simultaneously with, the release of the relevant Borrowing from the Escrow Account. Prior to the release of the relevant Borrowing from the Escrow Account, the Borrower shall have no right or interest in respect of such funds.

(ii) If the relevant Borrowing (or part thereof) is returned to the Administrative Agent pursuant to the terms of the Escrow Agreement, such funds shall be returned by the Administrative Agent to the Lenders and the relevant Borrowing shall (to the extent of the funds so returned to the Lenders) be deemed not to have occurred, provided that the Borrower shall be required to pay interest on the relevant funds on and from the date of payment to the Escrow Account up to but excluding the date on which the funds are returned. Such interest shall be payable on the date the relevant funds are returned and shall be calculated at the rate that would otherwise have applied if such amount constituted a Borrowing for such period.

(iii) If the Administrative Agent is satisfied that the conditions set out in Section 4.02 in relation to any Borrowing which has been credited to an Escrow Account have been satisfied or will upon release of such Borrowing from the Escrow Account be satisfied, the Administrative Agent shall execute a release instruction in respect thereof and the Borrowing Date in relation to the funds so released shall be deemed for all purposes under this Agreement, save for the purposes of the calculation of interest which shall accrue from the date the relevant funds are paid to the Escrow Account, to be the date of such release.

(iv) The Borrower shall indemnify, on written demand, the Finance Parties for (A) in the case of any funds returned to the Administrative Agent pursuant to any Escrow Agreement, amounts set out in Section 2.13 as if such return constituted a prepayment and (B) any other costs, losses and expenses, as the case may be, incurred by the Finance Parties in connection with the arrangements set forth in this Section 2.01(c). For the avoidance of any doubt, the Finance Parties shall not be liable for any costs, expenses or other amounts payable to the Escrow Agent under or pursuant to the Escrow Agreement.

SECTION 2.02 [Reserved].

SECTION 2.03 Repayment Schedules.

(a) Promptly following the issuance of the first Borrowing Request in respect of the Term Loan, the Administrative Agent will, in consultation with the Borrower and the Term Lenders, prepare a repayment schedule in respect of the Term Loan, and promptly following the issuance of each subsequent Borrowing Request in respect of the Term Loan, the Administrative Agent will, in consultation with the Borrower and the Term Lenders, revise the repayment schedule in respect of the Term Loan to take into account the additional advance being made under such Borrowing Request (the “Repayment Schedule”). The Repayment Schedule will be prepared on the basis that:

(i) the Borrower will repay the Term Loan in instalments on each Payment Date (the “Term Loan Required Payments”);

 

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(ii) the Term Loan will amortize, commencing on the first Borrowing Date in respect of the Term Loan until the Maturity Date, at a rate of 8% per annum, which rate shall be calculated on the basis of the aggregate amount of the Term Loan which has been advanced (excluding any amortization payments which have previously been made) as at the applicable Payment Date; and

(iii) such annual repayments shall be split pro rata over each of the applicable Payment Dates.

(b) The Administrative Agent, the Term Lenders and the Borrower will agree such Repayment Schedule prior to the relevant Borrowing Date.

(c) If any optional partial prepayment of the Term Loan is made pursuant to Section 2.05(a), or any amount of the Term Loan is prepaid as a result of a Cash Sweep Event, such amounts shall reduce the Term Loan Required Payments pro rata (or, if the Borrower makes an election in accordance with Section 2.05(b)(ii), the next in time amortization payment(s) only) and the Administrative Agent will, in consultation with the Borrower and the Term Lenders, revise the repayment schedule to take into account the relevant partial prepayment and its required manner of application pursuant hereto. The Administrative Agent, the Term Lenders and the Borrower will agree such Repayment Schedule. The revised repayment schedule shall thereafter be the “Repayment Schedule” for the purposes of this Agreement

SECTION 2.04 Repayment of the Loans

(a) Term Loan. The Borrower shall repay the Term Loan as follows:

(i) on each Payment Date, the Term Loan Required Payments in accordance with the Repayment Schedule; and

(ii) on the Maturity Date, the outstanding principal balance of the Term Loan.

(b) [Reserved].

SECTION 2.05 Optional Prepayments

(a) Optional Prepayments. The Borrower may, upon notice to the Administrative Agent, at any time and from time to time prepay any Borrowing in whole or in part without premium or penalty; provided that (i) such notice shall be in the form of a written Prepayment Notice, appropriately completed and signed by a Responsible Officer of the Borrower, or may be given by telephone to the Administrative Agent (if promptly confirmed by such a written Prepayment Notice consistent with such telephonic notice) and must be received by the Administrative Agent not later than 11:00 a.m. (New York City time) three Business Days before the date of prepayment; (ii) such Prepayment Notice shall specify (A) whether such prepayment shall be applied to prepay the Term Loans of the Term Lenders and/or prepay outstanding principal under any other Program Debt Documents, (B) the prepayment date and (C) the principal amount of each Borrowing or portion thereof to be prepaid; and (iii) each such partial prepayment shall be in an amount not less than $1,000,000 or a larger multiple of $1,000,000. Promptly following receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise the applicable Lenders of the contents thereof. Each Prepayment Notice shall be irrevocable.

 

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(b) Application. Each optional prepayment of a Borrowing shall be applied (i) to reduce all Term Loan Required Payments pro rata, or (ii) if the Borrower so directs in relation to any optional partial prepayment of the Term Loan pursuant to Section 2.05(a), against the next in time amortization payment(s) only. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.08, together with any additional amounts required pursuant to Section 2.13.

(c) [Reserved].

SECTION 2.06 Mandatory Prepayments.

(a) [Reserved].

(b) Illegality. If it is or will be unlawful in any jurisdiction for a Lender to perform any of its obligations under any Loan Documents, or to fund or maintain its share in the Loans, or any Obligor is or becomes a Sanctioned Person, and the Lender (or in the case of any Obligor being or becoming a Sanctioned Person, any Lender) has notified the Administrative Agent and the Borrower of the same: (i) the Borrower shall repay or prepay that Lender’s participation in the Loans in full; and (ii) the Commitments of that Lender will be immediately cancelled. The date for repayment or prepayment referred to in (i) above will be, (x) in the case where it is already unlawful for such Lender to perform such obligations or to fund or maintain its share in the Loans, or an Obligor has become a Sanctioned Person, as soon as practicable and (y) in the case of unlawfulness that will occur in the future, the date specified by that Lender in the relevant notification, which shall not be earlier than ten (10) Business Days preceding the last day of any applicable grace period allowed by law and which shall be a date falling at least thirty (30) days from the date of the notice (but in any event no later than the last day of any applicable grace period allowed by law).

(c) Change of Control. Upon the occurrence of a Change of Control, the Borrower shall (i) prepay the Loans in full, together with accrued interest thereon to the date of such prepayment, and (ii) terminate all of the unused Commitments, if any. Any prepayment of the Loans under this Section 2.06(c) shall be made on the date of occurrence of such Change of Control.

(d) Failure of Security. If any of the Security Documents do not, or shall have ceased to, constitute an enforceable Security Interest over the monies, interests and assets expressed to be assigned, mortgaged, charged, pledged or over which Security Interests are otherwise created or expressed to be created thereby (a “Collateral Defect”), and (if the same is capable of remedy) the same has not been remedied to the satisfaction of the Administrative Agent within 15 Business Days (provided that during such period the Borrower is diligently taking action to remedy such Collateral Defect), the Administrative Agent may by written notice to the Borrower declare that the Loans shall become immediately due and payable in whole or in part by the Borrower, provided that if the Collateral Defect relates to some but not all of the Collateral Vessels, the Borrower may prepay a portion of the Loans pursuant to Section 2.05(a) in such amount as is required such that, following such payment, no BB Event and no DSCR Cash Sweep would be continuing (for these purposes, not taking into account the Collateral Vessel(s) the subject of the Collateral Defect).

(e) Unlawfulness. If it is or becomes unlawful for an Obligor to perform any of its material obligations under the Loan Documents or any Related Contract other than as a result of any action or inaction of an Obligor (an “Unlawfulness Event”), and (if the same is capable of remedy) the same has not been remedied to the satisfaction of the Administrative Agent within 15 Business Days (provided that during such period the Borrower is diligently taking action to remedy such Unlawfulness

 

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Event), the Administrative Agent may by written notice to the Borrower declare that the Loans shall become immediately due and payable in whole or in part by the Borrower, provided that if the Unlawfulness Event relates to some but not all of the Collateral Vessels, the Borrower may prepay a portion of the Loans pursuant to Section 2.05(a) in such amount as is required such that, following such payment, no BB Event and no DSCR Cash Sweep would be continuing (for these purposes, not taking into account the Collateral Vessel(s) the subject of the Unlawfulness Event).

(f) Application of Mandatory Prepayments. Any repayment or Prepayment under Section 2.06(c) to (e) (inclusive) shall be applied, pro rata and pari passu, to repay the outstanding principal of the Term Loan under this Agreement and the outstanding principal under any other Program Debt Document (provided that if any relevant Secured Party thereunder elects not to receive such amounts, such amounts shall be applied to repay the outstanding principal of the Term Loan under this Agreement pro rata to the remaining installments).

SECTION 2.07 [Reserved].

SECTION 2.08 Interest.

(a) Interest Rates. Subject to paragraphs (b) and (e) of this Section, each Loan shall bear interest at a rate per annum equal to the LIBO Rate for the Interest Period therefor plus the Margin.

(b) Default Interest. If any amount payable by any Obligor under this Agreement or any other Loan Document (including principal of any Loan, interest, fees and other amount) is not paid when due, whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a rate per annum equal to the applicable Default Rate. Upon the request of the Required Lenders, while any Event of Default exists, the Borrower shall pay interest on the principal amount of all Loans outstanding hereunder at a rate per annum equal to the applicable Default Rate.

(c) Payment Dates. Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein; provided that (i) interest accrued pursuant to paragraph (b) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any LIBO Rate Borrowing prior to the end of the Interest Period therefor, accrued interest on such Borrowing shall be payable on the effective date of such conversion.

(d) Interest Computation. All interest hereunder shall be computed on the basis of a year of 360 days, and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

(e) Market Disruption. If in respect of any Interest Period (i) at or about 12:00 noon, London time, two Business Days prior to the commencement of such Interest Period the Screen Rate is not available, and there is no Reference Bank Rate, or (ii) before close of business in London on the Business Day prior to the commencement of such Interest Period, the Administrative Agent receives notifications from a Lender or Lenders (whose participations in the Loans exceed 35%) of the aggregate outstanding amount of all the Advances under the applicable Senior Secured Facility) that the cost to it or them of obtaining matching deposits in the interbank market would be in excess of LIBOR, then (in each case) the rate of interest on the relevant Lender’s share of that Loan for the Interest Period shall be the rate per annum which is the sum of: (x) the rate notified to the Administrative Agent by the relevant Lender(s) as soon as practicable and in any event by close of business on the first day of such Interest Period, to be that which expresses as a percentage rate per annum the cost to the relevant Lender(s) of funding its or their participation in the Loans; and (y) the Margin.

 

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(f) Modification and/or discontinuation of certain benchmarks. Without prejudice to any other provisions of this Agreement (including in particular this Section 2.08 and Section 9.02(b) (Amendments, Etc.), each Party acknowledges and agrees for the benefit of each other Party that:

(i) IBOR benchmarks (i) may be subject to methodological or other changes which could affect their value, or (ii) may not comply with applicable laws and regulations (including Regulation (EU) 2016/1011 of the European Parliament and of the Council, as amended (EU Benchmarks Regulation)) and/or (iii) may be permanently discontinued; and

(ii) the occurrence of any of the aforementioned events set out in (f)(i) above and/or events set out in Section 2.16 (Inability to Determine Rates) may have adverse consequences which may materially impact the economics of the financing transaction contemplated under this Agreement.

SECTION 2.09 Fees.

(a) Fee Letters. Fees (other than the Commitment Fee) shall be paid by the Borrower in the amount, in the manner and at the times agreed in the Fee Letters.

(b) Term Loan Commitment Fee. The Borrower agrees to pay to the Administrative Agent for the account of each Term Lender a commitment fee on the daily average unused amount of the Term Loan Commitment of such Term Lender, for each day during the period from the Closing Date until the Term Loan Availability Termination Date, at a rate equal to 0.25% per annum (or, during any period where less than 50% of the aggregate Term Loan Commitments have been utilized, 0.50% per annum), accrued commitment fees to be payable on each Borrowing Date in respect of the Term Loan and upon any termination or expiry of the applicable Term Loan Commitments.

(c) [Reserved].

(d) [Reserved].

(e) [Reserved].

(f) Fee Computation. All fees payable under this Section shall be computed on the basis of a year of 360 days and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). Each determination by the Administrative Agent of a fee hereunder shall be conclusive absent manifest error.

SECTION 2.10 Evidence of Debt. Each Lender shall maintain in accordance with its usual practice records evidencing the indebtedness of the Borrower to such Lender resulting from each Credit Extension made by such Lender. The Administrative Agent shall maintain the Register in accordance with Section 9.04(c). The entries made in the records maintained pursuant to this paragraph (a) shall be prima facie evidence absent manifest error of the existence and amounts of the obligations recorded therein. Any failure of any Lender or the Administrative Agent to maintain such records or make any entry therein or any error therein shall not in any manner affect the obligations of the Borrower under this Agreement and the other Loan Documents. In the event of any conflict between the records maintained by any Lender and the records maintained by the Administrative Agent in such matters, the records of the Administrative Agent shall control in the absence of manifest error.

 

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SECTION 2.11 Payments Generally; Several Obligations of Lenders.

(a) Payments by Borrower. All payments to be made by the Borrower hereunder and the other Loan Documents shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all such payments shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in immediately available funds not later than 2:00pm (New York City time) on the date specified herein. All amounts received by the Administrative Agent after such time on any date shall be deemed to have been received on the next succeeding Business Day and any applicable interest or fees shall continue to accrue. The Administrative Agent will apply such amounts in accordance with the Intercreditor Agreement.

(b) Application of Insufficient Payments. Subject to Section 4.02 of the Intercreditor Agreement, if at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest, fees and other amounts then due hereunder, such funds shall be applied (i) first, to pay interest, fees and other amounts then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest, fees and other amounts then due to such parties, and (ii) second, to pay principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal, then due to such parties.

(c) Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

(d) Several Obligations of Lenders. The obligations of the Lenders hereunder to make Loans and to make payments pursuant to Section 9.03(c) are several and not joint. The failure of any Lender to make any Loan or to fund any such participation or to make any such payment on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participations or to make its payment under Section 9.03(c).

SECTION 2.12 Sharing of Payments. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Lender receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other such obligations greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them; provided that:

(i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

 

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(ii) the provisions of this paragraph shall not be construed to apply to (x) any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (y) [reserved], or (z) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this paragraph shall apply).

The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under Applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

SECTION 2.13 Compensation for Losses. In the event of (a) the payment of any principal other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) [reserved], (c) the failure for any reason to borrow, convert, continue or prepay any amount of any Loan on the date specified in any notice delivered pursuant hereto, or (d) the assignment of any Loan or part of a Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.18(b), then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. Such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest (as reasonably determined by such Lender) that would have accrued on the principal amount of such Loan had such event not occurred, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest that would accrue on such principal amount for such period at the interest rate that such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the London interbank eurodollar market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

SECTION 2.14 Increased Costs.

(a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender;

(ii) impose on any Lender or the London interbank market any other condition, cost or expense (other than Indemnified Taxes, Other Taxes and Excluded Taxes) affecting this Agreement or Loans made by such Lender;

 

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and the result of any of the foregoing shall be to increase the cost to such Lender of making, converting to, continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Lender or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or any other amount) then, upon request of such Lender, the Borrower will pay to such Lender, such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

(b) Capital Requirements. If any Lender determines that any Change in Law affecting such Lender or any lending office of such Lender or such Lender’s holding company, if any, regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

(c) Certificates for Reimbursement. A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section and delivered to the Borrower, shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

(d) Delay in Requests. Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions, and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

SECTION 2.15 Taxes.

(a) Defined Terms. For purposes of this Section, the term “Applicable Law” includes FATCA.

(b) Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrower under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by Applicable Law. If any Applicable Law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with Applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

 

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(c) Payment of Other Taxes by Borrower. The Borrower shall timely pay to the relevant Governmental Authority in accordance with Applicable Law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.

(d) Indemnification by Borrower. The Borrower shall indemnify each Recipient, within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(e) Evidence of Payments. As soon as practicable after any payment of Taxes by the Borrower to a Governmental Authority pursuant to this Section, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(f) Status of Lenders. Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall to the extent legally able to do so, use reasonable efforts to deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. Notwithstanding anything to the contrary in the preceding sentence, (i) nothing herein shall obligate any Lender to disclose any confidential information in connection therewith and (ii) the completion, execution and submission of such documentation shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

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

SECTION 2.16 Benchmark Replacement Setting.

(a) Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Loan Document (and any Hedging Agreement shall be deemed not to be a “Loan Document” for purposes of this Section titled “Benchmark Replacement Setting”), if a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (1) or (2) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (3) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for

 

41


all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders.

If (i) a Benchmark Replacement Date has occurred and the applicable Benchmark Replacement on such Benchmark Replacement Date is a Benchmark Replacement other than the sum of: (a) Term SOFR and (b) the related Benchmark Replacement Adjustment, (ii) subsequently, the Relevant Governmental Body recommends for use a forward-looking term rate based on SOFR and the Borrower requests that the Administrative Agent review the administrative feasibility of such recommended forward-looking term rate for purposes of this Agreement and (iii) following such request from the Borrower, the Administrative Agent determines (in its sole discretion) that such forward looking term rate is administratively feasible for the Administrative Agent, then the Administrative Agent may (in its sole discretion) provide the Borrower and Lenders with written notice that from and after a date identified in such notice: (i) a Benchmark Replacement Date shall be deemed to have occurred, the Benchmark Replacement on such Benchmark Replacement Date shall be deemed to be a Benchmark Replacement determined in accordance with clause (1) of the definition of “Benchmark Replacement” under this Section titled “Benchmark Replacement Setting”; provided, however, that if upon such Benchmark Replacement Date the Benchmark Replacement Adjustment is unable to be determined in accordance with clause (1) of the definition of “Benchmark Replacement” and the corresponding definition of “Benchmark Replacement Adjustment”, then the Benchmark Replacement Adjustment in effect immediately prior to such new Benchmark Replacement Date shall be utilized for purposes of this Benchmark Replacement (for avoidance of doubt, for purposes of this proviso, such Benchmark Replacement Adjustment shall be the Benchmark Replacement Adjustment which was established in accordance with the definition of “Benchmark Replacement Adjustment” on the date determined in accordance with clauses (1) or (2), as applicable, of the definition of “Benchmark Replacement Date” hereunder) and (ii) such forward looking term rate shall be deemed to be the forward looking term rate referenced in the definition of “Term SOFR” for all purposes hereunder or under any Loan Document in respect of any Benchmark setting and any subsequent Benchmark settings, without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document. For the avoidance of doubt, if the circumstances described in the immediately preceding sentence shall occur, all applicable provisions set forth in this Section titled “Benchmark Replacement Setting” shall apply with respect to such election of the Administrative Agent as completely as if such forward-looking term rate was initially determined in accordance with clause (1) of the definition of “Benchmark Replacement”, including, without limitation, the provisions set forth in clauses (b) and (f) of this Section titled “Benchmark Replacement Setting.”.

(b) Benchmark Replacement Conforming Changes. In connection with the implementation of a Benchmark Replacement, the Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.

(c) Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Borrower and the Lenders of (i) any Benchmark Replacement Date and the related Benchmark Replacement, (ii) the effectiveness of any Benchmark Replacement Conforming Changes, and (iii) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (d) below. For the avoidance of doubt, any notice required to be delivered by the Administrative Agent as set forth in

 

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this Section titled “Benchmark Replacement Setting” may be provided, at the option of the Administrative Agent (in its sole discretion), in one or more notices and may be delivered together with, or as part of any amendment which implements any Benchmark Replacement or Benchmark Conforming Changes. Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section titled “Benchmark Replacement Setting,” including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section titled “Benchmark Replacement Setting.”.

(d) Unavailability of Tenor of Benchmark. Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including Term SOFR or USD LIBOR) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is or will be no longer representative, then the Administrative Agent may modify the definition of “Interest Period” for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition of “Interest Period” for all Benchmark settings at or after such time to reinstate such previously removed tenor.

(e) Disclaimer. The Administrative Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to (i) the administration, submission or any other matter related to the London interbank offered rate or with respect to any alternative or successor rate thereto, or replacement rate thereof (including, without limitation any Benchmark Replacement implemented hereunder), (ii) the composition or characteristics of any such Benchmark Replacement, including whether it is similar to, or produces the same value or economic equivalence to USD LIBOR (or any other Benchmark) or have the same volume or liquidity as did USD LIBOR (or any other Benchmark), (iii) any actions or use of its discretion or other decisions or determinations made with respect to any matters covered by this Section titled “Benchmark Replacement Setting” including, without limitation, whether or not a Benchmark Transition Event has occurred, the removal or lack thereof of unavailable or non-representative tenors, the implementation or lack thereof of any Benchmark Replacement Conforming Changes, the delivery or non-delivery of any notices required by clause (c) above or otherwise in accordance herewith, and (iv) the effect of any of the foregoing provisions of this Section titled “Benchmark Replacement Setting.”.

(f) Certain Defined Terms.

As used in this Section titled “Benchmark Replacement Setting”:

Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, any tenor for such Benchmark or payment period for interest calculated with reference to such Benchmark, as applicable, that is or may be used for determining the length of an Interest Period pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to clause (d) of this Section titled “Benchmark Replacement Setting.”.

 

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Benchmark” means, initially, USD LIBOR; provided that if a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred with respect to USD LIBOR or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause (a) of this Section titled “Benchmark Replacement Setting.”.

Benchmark Replacement” means, for any Available Tenor, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date:

 

  (1)

the sum of: (a) Term SOFR and (b) the related Benchmark Replacement Adjustment;

 

  (2)

the sum of: (a) Daily Simple SOFR and (b) the related Benchmark Replacement Adjustment;

 

  (3)

the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for U.S. dollar-denominated syndicated credit facilities at such time and (b) the related Benchmark Replacement Adjustment; provided that, in the case of clause (1), such Unadjusted Benchmark Replacement is displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion.

If the Benchmark Replacement as determined pursuant to clause (1), (2) or (3) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.

Benchmark Replacement Adjustment” means, with respect to any replacement of the then current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement:

 

  (1)

for purposes of clauses (1) and (2) of the definition of “Benchmark Replacement,” the first alternative set forth in the order below that can be determined by the Administrative Agent: (a) the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Interest Period that has been selected or recommended by the Relevant Governmental Body for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for the applicable Corresponding Tenor; (b) the spread adjustment (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Interest Period that would apply to the fallback rate for a derivative transaction referencing the ISDA Definitions to be effective upon an index cessation event with respect to such Benchmark for the applicable Corresponding Tenor; and

 

  (2)

for purposes of clause (3) of the definition of “Benchmark Replacement,” the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the

 

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  Borrower for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date or (ii) any evolving or then prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar denominated syndicated credit facilities; provided that, in the case of clause (1) above, such adjustment is displayed on a screen or other information service that publishes such Benchmark Replacement Adjustment from time to time as selected by the Administrative Agent in its reasonable discretion.

Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, the formula for calculating any successor rates identified pursuant to the definition of “Benchmark Replacement”, the formula, methodology or convention for applying the successor Floor to the successor Benchmark Replacement and other technical, administrative or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

Benchmark Replacement Date” means the earliest to occur of the following events with respect to the then current Benchmark:

 

  (1)

in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof);

 

  (2)

in the case of clause (3) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein; or

 

  (3)

in the case of an Early Opt-in Election, the sixth (6th) Business Day after the date notice of such Early Opt-in Election is provided to the Lenders, so long as the Administrative Agent has not received, by 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Early Opt-in Election is provided to the Lenders, written notice of objection to such Early Opt-in Election from Lenders comprising the Required Lenders.

For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

 

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Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark:

 

  (1)

a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);

 

  (2)

a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or

 

  (3)

a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer representative.

For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).

Corresponding Tenor” with respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.

Daily Simple SOFR” means, for any day, SOFR, with the conventions for this rate (which will include a lookback) being established by the Administrative Agent in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for syndicated business loans; provided, that if the Administrative Agent decides that any such convention is not administratively feasible for the Administrative Agent, then the Administrative Agent may establish another convention in its reasonable discretion.

 

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Early Opt-in Election” means, if the then-current Benchmark is USD LIBOR, the occurrence of the following:

 

  (1)

a notification by the Administrative Agent to (or the request by the Borrower to the Administrative Agent to notify) each of the other parties hereto that at least five currently outstanding U.S. dollar denominated syndicated credit facilities in the U.S. syndicated loan market at such time contain (as a result of amendment or as originally executed) a SOFR-based rate (including SOFR, a term SOFR or any other rate based upon SOFR) as a benchmark rate (and such syndicated credit facilities are identified in such notice and are publicly available for review), and

 

  (2)

the joint election by the Administrative Agent and the Borrower to trigger a fallback from USD LIBOR and the provision by the Administrative Agent of written notice of such election to the Lenders.

Floor” means the benchmark rate floor of zero.

ISDA Definitions” means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time by the International Swaps and Derivatives Association, Inc. or such successor thereto.

Reference Time” with respect to any setting of the then-current Benchmark means (1) if such Benchmark is USD LIBOR, 11:00 a.m. (London time) on the day that is two London banking days preceding the date of such setting, and (2) if such Benchmark is not USD LIBOR, the time determined by the Administrative Agent in its reasonable discretion.

Relevant Governmental Body” means the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto.

SOFR” means, with respect to any Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day published by the SOFR Administrator on the SOFR Administrator’s Website on the immediately succeeding Business Day.

SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).

SOFR Administrator’s Website” means the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.

Term SOFR” means, for the applicable Corresponding Tenor as of the applicable Reference Time, the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.

Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.

USD LIBOR” means the London interbank offered rate for U.S. dollars.

SECTION 2.17 [Reserved].

 

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SECTION 2.18 Mitigation Obligations; Replacement of Lenders.

(a) Designation of a Different Lending Office. If any Lender (x) requests Borrower to repay its Loans in full pursuant to Section 2.06(b), (y) requests compensation under Section 2.14, or (z) requires the Borrower to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.15, then such Lender shall (at the request of the Borrower) use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate the illegality contemplated by Section 2.06(b) or eliminate or reduce amounts payable pursuant to Section 2.14 or 2.15, as the case may be, in the future, and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b) Replacement and Termination of Lenders. If (x) any Lender requests (A) Borrower to repay its Loans in full pursuant to Section 2.06(b) or (B) compensation under Section 2.14, or (y) the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.15 and, in each case, such Lender has declined or is unable to designate a different lending office in accordance with paragraph (a) of this Section, or if any Lender is a Defaulting Lender or a Non-Consenting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, (I) require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 9.04), all of its interests, rights (other than its existing rights to payments pursuant to Section 2.14 or Section 2.15) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment) or (II) prepay such Lender’s Loans in full and permanently reduce the Commitments by the amount of such payment; provided that:

(i) the Borrower shall have paid to the Administrative Agent the assignment fee (if any) specified in Section 9.04;

(ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 2.13) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

(iii) in the case of any such assignment resulting from a claim for compensation under Section 2.14 or payments required to be made pursuant to Section 2.15, such assignment will result in a reduction in such compensation or payments thereafter;

(iv) such assignment does not conflict with Applicable Law and such Lender shall have satisfied any know your customer requirements of such Lender in connection with such assignment as required by Applicable Law; and

(v) in the case of any assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.

 

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A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

Notwithstanding anything in this Section to the contrary, in the event that a Lender acts as the Administrative Agent, such Lender may not be replaced hereunder except in accordance with the terms of Section 8.06.

SECTION 2.19 [Reserved].

SECTION 2.20 Defaulting Lenders.

(a) Defaulting Lender Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by Applicable Law:

(i) Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders and Section 9.02(b).

(ii) Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VII or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 9.08 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, [reserved]; third, [reserved]; fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, [reserved]; sixth, to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of such Defaulting Lender until such time as all Loans are held by the Lenders pro rata in accordance with the Commitments without giving effect to clause (iv) below. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender pursuant to this Section shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

(iii) Commitment Fees. No Defaulting Lender shall be entitled to receive any Commitment Fee for any period during which that Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

 

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(b) Defaulting Lender Cure. If the Borrower and the Administrative Agent agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans to be held pro rata by the Lenders in accordance with the Commitments (without giving effect to paragraph (a)(iv) above), whereupon, such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

SECTION 2.21 Increases in Commitments.

(a) Request for Increase. The Borrower may, by notice to the Administrative Agent (who shall promptly notify the Lenders), request an increase in the Term Loan Commitments (each such increase, an “Incremental Commitment”); provided that any such request for an increase shall (i) be in a minimum amount of $20,000,000 (or such lesser amount as may be approved by the Administrative Agent) and (ii) not result in the aggregate amount of the Loan Secured Obligations and the Additional Secured Obligations referred to in the Intercreditor Agreement to exceed the maximum amount permitted thereunder.

(b) Incremental Lenders. An Incremental Commitment may be provided by any existing Lender or other Person that is an Eligible Assignee and is not a Person of the type described in Section 9.04(b)(iv) (each such existing Lender or other Person that agrees to provide an Incremental Commitment, an “Incremental Lender”). Notwithstanding anything herein to the contrary, no Lender shall have any obligation to agree to increase its Commitment, or to provide a Commitment, pursuant to this Section and any election to do so shall be in the sole discretion of such Lender.

(c) Terms of Incremental Commitments. The Administrative Agent and the Borrower shall determine the effective date for such increase pursuant to this Section (an “Incremental Commitment Effective Date”) and, if applicable, the final allocation of such increase among the Persons providing such increase; provided that such date shall be a Business Day at least 10 Business Days after delivery of the request for such increase (unless otherwise approved by the Administrative Agent) and at least 30 days prior to the Maturity Date.

In order to effect such increase, the Borrower, the applicable Incremental Lender(s) and the Administrative Agent (but no other Lenders or Persons) shall enter into one or more Joinder Agreements, each in form and substance satisfactory to the Borrower and the Administrative Agent, pursuant to which the applicable Incremental Lender(s) will provide the Incremental Commitment(s).

Effective as of the applicable Incremental Commitment Effective Date, subject to the terms and conditions set forth in this Section, each Incremental Commitment shall be a Term Loan Commitment (and not a separate facility hereunder), each Incremental Lender providing such Incremental Commitment shall be, and have all the rights of, a Term Lender for all purposes of this Agreement.

 

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(d) Conditions to Effectiveness. Notwithstanding the foregoing, the increase in the Commitments pursuant to this Section shall not be effective with respect to any Incremental Lender unless:

(i) no Default or Event of Default shall have occurred and be continuing on the Incremental Commitment Effective Date and after giving effect to such increase;

(ii) the representations and warranties contained in this Agreement are true and correct on and as of the Incremental Commitment Effective Date and after giving effect to such increase, as though made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date);

(iii) the Administrative Agent shall have received one or more Joinder Agreements contemplated above, providing for Incremental Commitments in the amount of such increase, and satisfied all know your customer requirements (including any know your customer requirements of the Security Trustee) in respect of such Incremental Lender; and

(iv) the Administrative Agent shall have received such legal opinions and other documents reasonably requested by the Administrative Agent in connection therewith.

As of such Incremental Commitment Effective Date, upon the Administrative Agent’s receipt of the documents required by this paragraph (d), the Administrative Agent shall record the information contained in the applicable Joinder Agreement(s) in the Register and give prompt notice of the increase in the Commitments to the Borrower and the Lenders (including each Incremental Lender).

ARTICLE III

REPRESENTATIONS AND WARRANTIES

To induce the other parties (excluding any other Obligors) to enter into this Agreement, the Borrower represents and warrants with respect to itself and each other Obligor to each other party hereto (excluding any other Obligors) that as of the Restatement Date, (other than in respect of the representation and warranty set forth is Section 3.13) each Borrowing Date and, in respect of the representations and warranties set forth in Sections 3.01, 3.02, 3.03, 3.04, 3.06, 3.07, 3.08, 3.09, 3.11, 3.12, 3.16, 3.17, 3.21, 3.22, 3.27, 3.29, 3.30. 3.32, 3.33, 3.34 and 3.35, on each Payment Date:

SECTION 3.01 Status. (a) Each Obligor is a corporation, duly incorporated and validly existing under the laws of the Republic of the Marshall Islands, or in relation to any applicable Vessel Owner, Singapore (or such other jurisdiction as may be acceptable to the Administrative Agent), and (b) each Obligor has the power to own its assets and carry on its business as it is being conducted.

SECTION 3.02 Powers and authority. Each Obligor has the power to enter into and perform, and has taken all necessary action to authorize the entry into and performance of, the Loan Documents to which it is or will be a party and the transactions contemplated by those Loan Documents.

SECTION 3.03 Legal validity. The obligations expressed to be assumed by each Obligor in each Loan Document to which it is a party are legal, valid, binding and enforceable obligations, except as such enforceability may be limited by any applicable bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally and to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 3.04 Non-conflict. The entry into and performance by each Obligor of, and the transactions contemplated by, the Loan Documents to which it is a party do not conflict in any material respect with: (a) any law or regulation applicable to it; (b) its constitutional documents; or (c) any document which is binding upon it or any of its assets that, in the case of this clause (c), would reasonably be expected to cause a Material Adverse Effect.

 

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SECTION 3.05 No default. (a) No Default is continuing or will result from the execution of, or the performance of any transaction contemplated by, any Loan Document. (b) No other event is outstanding which constitutes a default under any document which is binding on any Obligor or any of its assets to an extent or in a manner which is reasonably likely to have a Material Adverse Effect.

SECTION 3.06 Authorizations. All authorizations required by each Obligor in connection with the entry into, performance, validity and enforceability of, and the transactions contemplated by, the Loan Documents have been obtained or effected (as appropriate) and are in full force and effect, or, in the case of the registration of any Mortgage in respect of a Collateral Vessel that is the subject of a Loan on a Borrowing Date, shall be promptly obtained or effected following such Borrowing Date and within the period prescribed by the Applicable Law.

SECTION 3.07 Financial statements . The audited consolidated financial statements of the Guarantor most recently delivered to the Administrative Agent (or, until delivery of the first audited financial statements, the Original Financial Statements) together with any other financial information of the Guarantor supplied to the Administrative Agent by the Borrower or the Guarantor: (a) have been prepared in accordance with GAAP, consistently applied; (b) have been audited in accordance with GAAP; and (c) fairly represent its financial condition (consolidated, if applicable) as at the date to which they were drawn up, except, in each case, as disclosed to the contrary in those financial statements or other information.

SECTION 3.08 No misleading information. (a) Any factual information provided in writing (“Written Factual Information”) by or on behalf of any Obligor in connection with the Loan Documents or any Collateral Vessel (other than forward looking information and information of a general economic or industry specific nature) was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated; (b) any financial projections contained in the Written Factual Information were prepared on the basis of recent historical information and on the basis of reasonable assumptions believed by such Obligor to be reasonable at the time made and reflect such Obligor’s judgment based on present circumstances of the most likely set of conditions and course of action for the projected period (it being recognized by the Administrative Agent that such projections are not to be viewed as facts and are subject to significant uncertainties and contingencies many of which are beyond the Obligors’ control, that no assurance can be made that any particular projection will be realized, that actual results may differ from projected results and that such differences may be material); and (c) to the best of the knowledge and belief of the Obligors, nothing has occurred and no information has been given or withheld that results in the information contained in the Written Factual Information, taken as a whole, being untrue or misleading in any material respect.

SECTION 3.09 No Material Adverse Effect. There has been no Material Adverse Effect since the date of the Original Financial Statements.

SECTION 3.10 Litigation. No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency (including, but not limited to, investigative proceedings) which, if adversely determined, might reasonably be expected to have a Material Adverse Effect have (to the best of its knowledge and belief) been started or threatened against any Obligor.

SECTION 3.11 Pari passu ranking. Each Obligor’s payment obligations under the Loan Documents rank at least pari passu with all its other present and future unsecured and unsubordinated payment obligations, except for obligations mandatorily preferred by law applying to companies generally.

 

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SECTION 3.12 Taxes. Each Obligor has filed all Tax returns which are required to have been filed and has paid, or made adequate provisions for the payment of, all of its Taxes which are due and payable, except such Taxes, if any, as are being contested in good faith and by appropriate proceedings and as to which such reserves or other appropriate provisions as may be required by GAAP have been established, and except where failure to file such returns or pay such Taxes, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

SECTION 3.13 Taxes on payments. Assuming for these purposes that no Lender is based or conducting business in the Republic of the Marshall Islands or Hong Kong, all amounts payable by any Obligor to the Administrative Parties under the Loan Documents and the Related Contracts may be made without any deduction or withholding for any Taxes.

SECTION 3.14 Stamp duties. Except as notified in writing to by the Administrative Agent by any Obligor, no stamp or registration duty or similar Tax or charge is payable in its jurisdiction of incorporation in respect of any Loan Document or Related Contract.

SECTION 3.15 Environment. Except as may already have been disclosed by the Borrower in writing to the Administrative Agent: (a) each Vessel Owner and its Environmental Representatives have, without limitation, complied with the provisions of all applicable Environmental Laws in relation to each Collateral Vessel in all material respects; (b) each Vessel Owner and its Environmental Representatives have obtained all requisite Environmental Approvals in relation to each Collateral Vessel and are in compliance with such Environmental Approvals; (c) no Vessel Owner or any of their Environmental Representatives have received notice of any Environmental Liability in relation to a Collateral Vessel which alleges that a Vessel Owner is not in compliance in all material respects with applicable Environmental Laws in relation to such Collateral Vessel or Environmental Approvals in relation to such Collateral Vessel; (d) there is no Environmental Liability in relation to any Collateral Vessel pending or, to the knowledge of the Borrower, threatened which is such that a first class Vessel Owner or operator of vessels such as the Collateral Vessels, making all due enquiries and complying in all respects with its obligations under the ISM Code, ought to have known about; and (e) there has been no release of Hazardous Materials by or in respect of any Collateral Vessel about which a first class borrower or operator of vessels such as the Collateral Vessels making all due enquiries and complying in all respects with its obligations under the ISM Code ought to have known about.

SECTION 3.16 Security Interests. No Security Interest exists over any Obligors’ assets which would cause a breach of Section 6.01.

SECTION 3.17 Security Assets. Each Obligor is solely and absolutely entitled to the Security Assets over which it has or will create any Security Interest pursuant to the Security Documents to which it is, or will be, a party and there is no agreement or arrangement, under which it is obliged to share any proceeds of or derived from such Security Assets with any third party.

SECTION 3.18 Collateral Vessel. (a) Each Collateral Vessel is operational, seaworthy and fit for service and is registered in the name of the applicable Vessel Owner at the relevant registry in the Approved Flag State; and (b) except as approved by the Administrative Agent (acting on the instructions of the Required Lenders), there are no arrangements under which Earnings of any Collateral Vessel may be shared with anyone else.

SECTION 3.19 ISM Code and ISPS Code compliance. In respect of each Collateral Vessel, the relevant Vessel Owner is in compliance with the ISM Code and ISPS Code in respect of that Collateral Vessel in all material respects.

 

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SECTION 3.20 No amendments to Related Contracts. Other than as notified to and agreed by the Administrative Agent in writing, there have been no material amendments to any of the Obligatory Insurance or Management Agreements, and the copies of the Eligible Charters and Charter Guarantees provided to the Administrative Agent prior to the Closing Date are correct and complete (and there have been no material amendments thereto) as of the Closing Date.

SECTION 3.21 Money Laundering. Neither any Borrowings hereunder nor the performance of any of the Obligors’ respective obligations under the Loan Documents or Related Contracts will involve any breach by the Obligors or any of their respective Subsidiaries of any money laundering statutes of any jurisdictions where the Obligors or any of their respective Subsidiaries conduct business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental or regulatory agency (collectively, the “Anti-Money Laundering Laws”).

SECTION 3.22 Anti-Corruption and Sanctions. (a) Each Obligor is conducting and will continue to conduct its business in compliance with Anti-Money Laundering Laws and Anti-Corruption Laws; (b) each Obligor has implemented, maintained, and will continue to maintain in effect policies and procedures to ensure its compliance and the compliance by its directors, officers, employees, and agents, with Anti-Money Laundering Laws and Anti-Corruption Laws; (c) none of the Obligors or any of their subsidiaries is, or, to the knowledge of the Obligors, is owned or controlled by, a Sanctioned Person, or located, organized, or resident in a Sanctioned Jurisdiction; (d) no proceeds of the Program Debt will be made available, directly or indirectly, to or for the benefit of, or used to fund any activities with or business of a Sanctioned Person, or in any country territory that, at the time of such funding, is the subject of Sanctions, or otherwise applied in a manner or for a purpose prohibited by Sanctions or Anti-Corruption Laws, or which would result in a violation of Sanctions by any person (including any person participating in the Program Debt, whether as underwriter, advisor, investor, lender, hedge provider, facility or security agent or otherwise); (e) each Obligor and each of their Subsidiaries is in compliance with all Sanctions, is not, to the best of its knowledge and belief, under investigation for an alleged violation of Sanctions, and shall implement a policy for Sanctions in line with the requirements of this Agreement; (f) each Obligor and each of their Subsidiaries shall not fund all or part of any repayment required to be made pursuant to Program Debt out of proceeds directly or indirectly derived from any business, activities or transactions which would be prohibited by Sanctions or which would otherwise cause any person or a Finance Party to be in breach of Sanctions or to otherwise become the subject or target of Sanctions; and (g) each Obligor and each of their Subsidiaries shall not (and shall procure that no Charterer of any Collateral Vessel will) operate, possess, use, dispose of or otherwise deal with, or procure or allow the ownership, operation, possession, use, disposal of or any other dealing with, each Collateral Vessel or part thereof for any purpose or to any person which would violate or cause any Finance Party to violate, when and as applicable, any Sanctions, any anti-terrorism law or any anti-corruption law in each case applicable to it.

SECTION 3.23 Compliance with laws. To the best of the Borrower’s knowledge and belief, each Obligor is in compliance in all material respects with all laws and regulations applicable to it, including Anti-Corruption Laws and Anti-Money Laundering Laws and is not under investigation for an alleged violation thereof.

SECTION 3.24 Investments Company Act. No Obligor is required to register as an “investment company,” as defined in the United States Investment Company Act of 1940, as amended without reliance on Section 3(c)(1) and/or Section 3(c)(7) of the Investment Company Act. No Obligor is a “covered fund” for purposes of the regulations adopted to implement Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (commonly referred to as the “Volcker Rule”). In making this determination, the Borrower has made this determination on the basis that no Obligor falls within the definition of “investment company” in Section 3(a)(1) of the Investment Company Act, although other bases or exceptions may be available.

 

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SECTION 3.25 Regulation U. No Obligor is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Federal Reserve Board). No proceeds of the Program Debt will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock.

SECTION 3.26 Insolvency. (a) No Obligor is unable, nor admits or has admitted its inability, to pay its debts as such debts become due or has suspended making payments on any of its debts; (b) no Obligor, by reason of actual or anticipated financial difficulties neither has commenced, nor intends to commence, negotiations with one or more of its creditors with a view to rescheduling any of its Indebtedness; (c) the value of the assets of the Borrower is not less than its liabilities (taking into account contingent and prospective liabilities); (d) no moratorium has been, or may, in the reasonably foreseeable future be, declared in respect of any Obligors’ Indebtedness; and (e) no reorganization or liquidation of any Obligor has occurred.

SECTION 3.27 Immunity. (a) The execution by each Obligor of each Loan Document to which it is a party constitutes, and the exercise by it of its rights and performance of its obligations under each such Loan Document will constitute, private and commercial acts performed for private and commercial purposes; and (b) no Obligor will be entitled to claim immunity from suit, execution, attachment or other legal process in any proceedings taken in its jurisdiction of incorporation in relation to any Loan Document.

SECTION 3.28 [Reserved].

SECTION 3.29 Jurisdiction and governing law. (a) Each of the following are legal, valid and binding under the Laws of each Obligor’s jurisdiction of incorporation: (i) its irrevocable submission under this Agreement to the jurisdiction of the courts of the State of New York sitting in New York County, and of the United States District Court of the Southern District of New York, and any appellate court from any thereof; (ii) its agreement that this Agreement is governed by the law of the State of New York; and (iii) its agreement not to claim any immunity to which it or its assets may be entitled; (b) Any judgment obtained in the State of New York will be recognized and be enforceable by the courts of each Obligor’s jurisdiction of incorporation, subject to any statutory or other conditions of such jurisdiction.

SECTION 3.30 Accounts. Except for the Charged Accounts, no Obligor (other than the Guarantor) has opened or instructed any other Person to open, any accounts.

SECTION 3.31 Charters. On each Borrowing Date, any Eligible Charter relating to a Collateral Vessel which is the subject of such Borrowing shall be in full force and effect.

SECTION 3.32 Ownership. The Borrower is a wholly owned Subsidiary of the Guarantor. Each Vessel Owner is a wholly owned Subsidiary of the Borrower. No Obligor (other than the Guarantor) has any Subsidiaries other than Subsidiaries which are themselves Obligors.

SECTION 3.33 Use of proceeds. The proceeds of the Program Debt will be used by the Borrower (a) to finance or refinance in part the acquisition of the Collateral Vessels purchased or to be purchased by the Vessel Owners; (b) for the general corporate purposes of the Borrower and the Guarantor.

 

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SECTION 3.34 Special purpose representations. Except, in each case, with respect to the Guarantor (a) no Obligor has any employees; (b) no Obligor is a party to any contract or agreement with any person, or has conducted any business, or has otherwise created or incurred any liability to any person, other than in connection with the acquisition, chartering and disposition of the Security Assets, the making of Loans or otherwise as permitted by the Loan Documents and activities ancillary thereto; (c) no Obligor is a partner or joint venturer in any partnership or joint venture; and (d) each Obligor has complied in all material respects with all corporate and/or other legal formalities required by its certificate of incorporation, certificate of formation and by-laws, operating agreement, memorandum and articles of association, constitution or similar formation documents, as applicable, and as duly amended prior to the Closing Date, and by Applicable Law, including, among other things, the observance of all restrictions on activity and corporate or other legal form of each such entity’s organizational documents.

SECTION 3.35 Separateness. (a) The Borrower, on behalf of each Obligor (other than the Guarantor) represents that it conducts its business such that it is a separate and readily identifiable business from, and independent of, any Person that is not a Subsidiary, including the Guarantor and each seller under a Purchase Agreement and their respective affiliates (collectively, “Unrelated Parties”), and further covenants as follows:

(i) each Obligor (other than the Guarantor) observes all corporate formalities necessary to remain a legal entity separate and distinct from, and independent of, each Unrelated Party;

(ii) each Obligor (other than the Guarantor) maintains its assets and liabilities separate and distinct from those of each Unrelated Party other than the Borrower, and will not commingle its assets with those of any Unrelated Party other than the Borrower;

(iii) each Obligor (other than the Guarantor) maintains its accounts and funds separate and distinct from the accounts and funds of each Unrelated Party other than the Borrower and will receive, deposit, withdraw and disburses its funds separately from any funds of any Unrelated Party other than the Borrower;

(iv) each Obligor (other than the Guarantor) maintains records, books, accounts and minutes separate from those of any Unrelated Party;

(v) each Obligor (other than the Guarantor) conducts its own business in its own name, and not in the name of any Unrelated Party;

(vi) each Obligor (other than the Guarantor) maintains an arm’s-length relationship with its Affiliates;

(vii) each Obligor (other than the Guarantor) maintains separate financial statements from each Unrelated Party, or if part of a consolidated group, then it will be shown as a separate member of such group;

(viii) each Obligor (other than the Guarantor) pays its own liabilities and obligations out of its own funds, whether in the ordinary course of business or not, as a legal entity separate from each Unrelated Party, provided that liabilities and obligations of Vessel Owners may be paid by Borrower;

 

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(ix) each Obligor (other than the Guarantor) uses separate stationery, invoices and checks from those of each Unrelated Party;

(x) each Obligor (other than the Guarantor) holds itself out as a separate entity, and shall correct any known misunderstanding regarding its status as a separate entity;

(xi) each Obligor (other than the Guarantor) has not agreed to pay or become liable for any Indebtedness of any Unrelated Party;

(xii) each Obligor (other than the Guarantor) has not held out that it is a division of any Unrelated Party, or that any Unrelated Party is a division of it;

(xiii) each Obligor (other than the Guarantor) has not induced any third party to rely on the creditworthiness of any Unrelated Party other than the Guarantor in order that such third party will be induced to contract with it;

(xiv) each Obligor (other than the Guarantor) has not entered into any transactions between it and any Unrelated Party that are more favorable to the Unrelated Party than transactions that the parties would have been able to enter into at such time on an arm’s-length basis with a non-affiliated third party, other than any agreements in effect on the Closing Date;

(xv) each Obligor (other than the Guarantor) observes all corporate or other procedures, including minimum capitalization requirements, required under applicable law and under its constitutive documents; and

(xvi) each Obligor’s (other than the Guarantor) directors acts in accordance with their duties at law and to exercise independent judgment, and shall not breach those duties or act solely in accordance with any direction, opinion, recommendation or instruction of any Unrelated Party in relation to the approval or rejection of, or the exercise of any voting power in relation to, any transaction approval requirements.

(b) The Borrower generally carries on its business and manages its affairs as an independent business separate and identifiable from the business of each Unrelated Party and any other person.

SECTION 3.36 Beneficial Ownership Certification. As of the Restatement Date, to the best knowledge of the Borrower, the information included in the Beneficial Ownership Certification provided on or prior to the Closing Date to any Lender in connection with this Agreement is true and correct in all respects.

ARTICLE IV

CONDITIONS

SECTION 4.01 Initial Borrowing Date. The obligation of each Lender to make Credit Extensions under this Agreement (as amended and restated on the Restatement Date) is subject to the satisfaction (or waiver in accordance with Section 9.02) of the following conditions (and, in the case of each document specified in this Section to be received by the Administrative Agent, such document shall be in form and substance satisfactory to the Administrative Agent and each Lender, and shall only be required to the extent not already provided to the Administrative Agent on or prior to the Restatement Date):

 

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(a) Loan Documents. Copies of counterparts of each of the following documents duly executed by all parties thereto:

(i) this Agreement;

(ii) the Intercreditor Agreement, together with an Additional Secured Debt Designation, a Reaffirmation Agreement and Intercreditor Joinder (as each such term is defined in the Intercreditor Agreement);

(iii) the Fee Letters;

(iv) any Intra Group Loan Agreement;

(v) the Share Pledge in respect of the Borrower (together, to the extent relevant, with any ancillary document required to be provided thereunder, including directors’ resignation letters and letters of authority, signed undated share transfer forms and irrevocable proxies);

(vi) the Account Charge(s) in respect of the Charged Accounts, along with each notice and acknowledgement of charge to the extent applicable;

(b) Corporate Documents. In respect of each of the Guarantor and the Borrower:

(i) a copy, certified by a duly authorized representative of such person to be a true, complete and up to date copy, of the constitutional documents of that person;

(ii) a copy, certified by a duly authorized representative of such person to be a true copy and as being in full force and effect and not amended or rescinded, of a resolution of the board of directors of such person:

(A) approving the terms of, and the transactions contemplated by, the Loan Documents to which it is a party and resolving that it execute, deliver and perform the Loan Documents to which it is a party;

(B) authorizing a person or persons to execute and deliver, on behalf of that person, the Loan Documents to which it is party and any notices or other documents to be given pursuant thereto;

(iii) a copy, certified by a duly authorized representative of that person to be a true copy and as being in full force and effect and not amended or rescinded of the power of attorney (if any) issued by or on behalf of that person, and not amended or rescinded, authorizing the execution by the attorneys named therein of the Loan Documents to which it is a party; and

(iv) specimen signatures of the signatories of that person (including any attorney named in the power of attorney referred to in paragraph (iii) above), certified by an officer of that person.

(c) Service of Process. Evidence that the process agent specified in any of the Loan Documents by an Obligor has accepted its appointment in relation to the relevant Obligor.

 

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(d) “Know your customer”.

(i) Each of the Finance Parties shall have received satisfactory information in order to satisfy their respective “know your customer” requirements.

(ii) To the extent the Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, at least five days prior to the Closing Date, any Lender that has requested, in a written notice to the Borrower at least 10 days prior to the Closing Date, a Beneficial Ownership Certification in relation to the Borrower shall have received such Beneficial Ownership Certification (provided that, upon the execution and delivery by such Lender of its signature page to this Agreement, the condition set forth in this Section (ii) shall be deemed to be satisfied).

(e) Opinions.

(i) A due execution, capacity and enforcement legal opinion from Marshall Islands’ counsel as to matters of Marshall Islands’ law and, if applicable, Singapore counsel as to matters of Singapore’s law and/or such other counsel where any relevant Obligor may be incorporated in respect of matters of law in such jurisdiction.

(ii) If required, reliance letter(s) issued by Marshall Islands and/or Singapore counsel and/or such other counsel as may be relevant with respect to any previous legal opinion(s) issued on matters of law in such other jurisdiction.

(iii) A legal opinion from Milbank LLP as to matters of New York law, and if applicable, reliance letter(s) issued with respect to any previous legal opinion issued on such matters.

(iv) A due execution and capacity legal opinion from Bermudan counsel as to matters of Bermudan law, or if applicable, reliance letter(s) issued by Bermudan counsel with respect to any previous legal opinion issued on such matters.

(v) An enforceability legal opinion from Hong Kong counsel as to matters of Hong Kong law, or if applicable, reliance letter(s) issued by Hong Kong counsel with respect to any previous legal opinion(s) issued on such matters.

(vi) An enforceability legal opinion from British Columbian counsel as to matters of British Columbia law, or if applicable, reliance letter(s) issued by British Columbian counsel with respect to any previous legal opinion issued on such matters.

(vii) A second party opinion from Sustainalytics (acting through its entity Jantzi Research Inc. incorporated in Canada) as to the alignment of the Term Loan with the Sustainability Linked Loan Principles.

(f) Fees and Expenses. The Obligors shall have paid all fees, costs and expenses (including legal fees and expenses) agreed in writing to be paid by it to the Finance Parties in connection herewith (including pursuant to the Fee Letters) to the extent invoiced at least two (2) Business Days prior to closing (and, in the case of expenses, including legal fees and expenses), provided that any amounts not invoiced two (2) Business Days prior to closing shall be paid promptly, and not later than 10 days after, demand therefor.

(g) Representations and Warranties. The representations and warranties made in Article 3 are true and correct.

 

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(h) No Default. No Default is outstanding or would result from such initial Borrowing.

(i) Other Documents. The Administrative Agent shall have received such other documents as the Administrative Agent or the Required Lenders (through the Administrative Agent) may reasonably request.

Without limiting the generality of Section 8.03(c), for purposes of determining satisfaction of the conditions specified in this Section, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Borrowing Date specifying its objection thereto.

SECTION 4.02 Conditions to Borrowings. The obligation of each Lender to make a Borrowing available (including its initial Borrowing) is additionally subject to the satisfaction (or waiver in accordance with Section 9.02) of the following conditions (and, in the case of each document specified in this Section to be received by the Administrative Agent, such document shall be in form and substance satisfactory to the Administrative Agent and each Lender):

(a) Loan Documents and Related Contracts. Each of the following documents duly executed by all parties thereto, to the extent applicable:

(i) copy of the Borrowing Request;

(ii) to the extent such Borrowing is used to acquire a Collateral Vessel (any such Borrowing, a “Vessel Borrowing”), an original Mortgage (and evidence satisfactory to the Administrative Agent that such Mortgage has been or will be, immediately following the Borrowing, duly registered with applicable registry of the Approved Flag State) in respect of each relevant Collateral Vessel subject to the Borrowing (each a “Relevant Vessel”);

(iii) a copy (with originals to follow promptly following closing) of an executed Share Pledge in respect of each relevant Vessel Owner (each a “Relevant Vessel Owner”), together, to the extent relevant, with any ancillary document required to be provided thereunder, including directors’ resignation letters and letters of authority, signed undated share transfer forms and irrevocable proxies;

(iv) copies of each Intra Group Loan Agreement;

(v) solely in the case of a Vessel Borrowing, a copy (with originals to follow promptly following closing) of the Intercreditor Joinder (Grantor) (as such term is defined in the Intercreditor Agreement) in respect of each Relevant Vessel Owner;

(vi) solely in the case of a Vessel Borrowing, a copy (with originals to follow promptly following closing) of an executed Account Charge in respect of each relevant Vessel Owner Account, where applicable;

(vii) solely in the case of a Vessel Borrowing, a copy (with originals to follow promptly following closing) of an executed General Assignment in respect of each Relevant Vessel;

(viii) solely in the case of a Vessel Borrowing, a copy (with originals to follow promptly following closing) of an executed Deed of Covenant in respect of each Relevant Vessel, where applicable;

 

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(ix) solely in the case of a Vessel Borrowing, a certified copy of the Management Agreement in respect of each Relevant Vessel;

(x) solely in the case of a Vessel Borrowing, an original Management Agreement Assignment in respect of each Relevant Vessel;

(xi) solely in the case of a Vessel Borrowing, an original Manager’s Undertaking;

(xii) solely in the case of a Vessel Borrowing, an original Insurances Assignment in respect of each Relevant Vessel;

(xiii) solely in the case of a Vessel Borrowing, a certified copy of any Eligible Charter in respect of each Relevant Vessel, where applicable;

(xiv) solely in the case of a Vessel Borrowing, a certified copy of any Charter Guarantee in respect of each Relevant Vessel, where applicable;

(xv) solely in the case of a Vessel Borrowing, a certified copy of the Purchase Agreement in respect of each Relevant Vessel, along with each of the documentary conditions precedent set out therein to the extent requested by the Administrative Agent;

(xvi) solely in the case of a Vessel Borrowing, a copy of the Bill of Sale and the protocol of delivery and acceptance in respect of each Relevant Vessel (and evidence satisfactory to the Administrative Agent that, to the extent required, such documents have been or will be, immediately following the Borrowing, duly registered with applicable registry of the Approved Flag State); and

(xvii) executed copies (with originals to follow promptly following closing) of all notices and acknowledgments of assignment required to be served under each Security Document referred to above, provided that any acknowledgements to be provided by any Person which is not a member of the Guarantor Group shall be permitted to be provided within fourteen (14) Business Days of the applicable Borrowing Date and the requirement to provide any acknowledgement from a Charterer shall be subject to the provisions of Section 5.24.

(b) Relevant Vessel documents. Certified copies of: (i) a classification certificate (including a confirmation of class or equivalent certificate) in respect of each Relevant Vessel showing each Relevant Vessel to be in class free from any overdue recommendation, condition or qualification affecting class or, in the event that this is not available, a faxed copy with a certified copy to follow as soon as practicable; (ii) a valid Safety Management Certificate for each Relevant Vessel; (iii) a valid Document of Compliance in respect of each Relevant Vessel; (iv) a valid International Ship Security Certificate for each Relevant Vessel; and (v) to the extent the applicable Relevant Vessel owner has or is required to have such certificate, the certificate listing all the potentially hazardous materials on board each Relevant Vessel.

(c) Obligatory Insurances.

(i) Certified copies of the Obligatory Insurances in respect of each Relevant Vessel; and

(ii) Fax or email confirmation from each broker and club concerned with the Obligatory Insurances of each Relevant Vessel that:

 

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(A) the relevant cover is in effect;

(B) they will accept notice of assignment of the Obligatory Insurances in favor of the Security Trustee and execute an acknowledgement of the notice in the form reasonably acceptable to the Security Trustee;

(C) they will restrict their lien for unpaid premiums under any fleet policy to unpaid premiums in respect of such Relevant Vessel only;

(D) they will issue a letter of undertaking in the form provided for in the Insurances Assignment;

(E) they will accept endorsement of a loss payable clause on the policies in the form provided for in the Insurances Assignment (in the case of brokers and insurers other than clubs) or will note the interest of the Administrative Agent in the entry for the Relevant Vessel by way of a loss payable clause in their current standard form (in the case of clubs); and

(F) they are not aware of any mortgage, charge, assignment or other encumbrance affecting the Obligatory Insurances with which they are concerned (other than any previously disclosed by the Borrower or the Vessel Owner to the Administrative Agent in writing),

or in form and substance satisfactory to the Administrative Agent’s insurance adviser.

(iii) Receipt by the Administrative Agent of a final insurance report prepared by BankServe Insurance Services Limited verifying Borrower’s compliance with the insurance requirements set forth in Section 5.26 and 5.27.

(d) Compliance Certificate. A Compliance Certificate signed by the Borrower and certifying, taking account of the proposed Borrowing: (i) the BB Ratio and that no BB Event will occur or is continuing (including confirmation as to any Excluded Collateral Vessels or exclusions of Asset Values due to any Concentration Limit Event); (ii) the DSCR Ratio and that no DSCR Cash Sweep Event will occur or is continuing; (iii) compliance with the Guarantor Financial Covenants; (iv) compliance with the Concentration Limit Requirements; and (v) compliance with the Hedging Requirement. Such Compliance Certificate will also attach appraisals in form and substance satisfactory to the Administrative Agent setting out (in reasonable detail) the Asset Value and Terminal Value of each Relevant Vessel.

(e) Borrower and Guarantor corporate documents. A bring-down certificate from each of the Borrower and the Guarantor in respect of the items referred to in Section 4.01(b) and, in the case of the Borrower’s bring-down certificate, certifying: (i) that no Default has occurred and is continuing; (ii) that the representations and warranties made in Article 3 shall be true and correct both before and after giving effect to the Borrowing; and (iii) to the Borrower’s knowledge, that the parties to any Eligible Charter in respect of each Relevant Vessel shall be in compliance with the requirements of such Eligible Charter.

(f) Relevant Vessel Owner and Manager corporate documents. In respect of each Relevant Vessel Owner and the Manager:

 

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(i) a copy, certified by a duly authorized representative of such Person to be a true, complete and up to date copy, of the constitutional documents of that Person;

(ii) a copy, certified by a duly authorized representative of such Person to be a true copy and as being in full force and effect and not amended or rescinded, of a resolution of the board of directors of such Person:

(A) approving the terms of, and the transactions contemplated by, the Loan Documents to which it is a party and resolving that it execute, deliver and perform the Loan Documents to which it is a party;

(B) authorizing a person or persons to execute and deliver, on behalf of that person, the Loan Documents to which it is party and any notices or other documents to be given pursuant thereto;

(iii) a copy, certified by a duly authorized representative of that person to be a true copy and as being in full force and effect and not amended or rescinded of the power of attorney (if any) issued by or on behalf of that person, and not amended or rescinded, authorizing the execution by the attorneys named therein of the Loan Documents to which it is a party; and

(iv) specimen signatures of the signatories of that person (including any attorney named in the power of attorney referred to in paragraph (c) above), certified by an officer of that person.

(g) Service of Process. Evidence that the process agent specified in any of the Loan Documents by an Obligor has accepted its appointment in relation to the relevant Obligor.

(h) “Know your customer”. Each of the Finance Parties shall have received satisfactory information in order to satisfy their respective “know your customer” requirements.

(i) Opinions.

(i) A due execution, capacity and enforcement legal opinion from Marshall Islands’ counsel as to matters of Marshall Islands’ law and/or from such other counsel as to matters of such other jurisdiction where any Obligor may be incorporated.

(ii) A legal opinion from Milbank LLP as to matters of New York law.

(iii) A legal opinion in relation to the registration and enforceability of the Mortgage (if applicable) under the laws of Hong Kong or the laws of such Approved Flag State, as may be applicable.

(j) Existing Security. If applicable, evidence in form and substance satisfactory to the Administrative Agent of the release and discharge of any existing mortgage or other Security Interest affecting any Relevant Vessel, or any other releases in connection with any interest which would or might otherwise, in the Administrative Agent’s opinion, adversely affect the security constituted by the Security Documents.

(k) Taxes. Evidence that any Taxes due and payable by the Borrower or any Relevant Vessel Owner in connection with the Relevant Vessel Owner’s purchase of the Relevant Vessel have been paid and discharged in full.

 

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(l) Fees and Expenses. The Obligors shall have paid all fees, costs and expenses (including legal fees and expenses) invoiced at least two (2) Business Days prior to the applicable Borrowing Date and agreed in writing to be paid by it to the Finance Parties in connection herewith (including pursuant to the Fee Letters) to the extent due (and, in the case of expenses, including legal fees and expenses), provided that any amounts not invoiced two (2) Business Days prior to closing shall be paid promptly, and not later than 10 days after, demand therefor.

(m) No Default. No Default is outstanding or would result from the Borrowing Date.

(n) Other Documents. The Administrative Agent shall have received such other documents as the Administrative Agent or the Required Lenders (through the Administrative Agent) may reasonably request.

SECTION 4.03 [Reserved].

SECTION 4.04 Conditions to Restatement. This Agreement shall not become effective until the date on which each of the following conditions is satisfied (and, in the case of each document specified in this Section to be received by the Administrative Agent, such document shall be in form and substance satisfactory to the Administrative Agent and each Lender):

(a) Loan Restatement Documents. The Administrative Agent (or its counsel) shall have received from each party hereto executed counterparts of:

(i) this Agreement;

(ii) Intercreditor Agreement (as amended and restated on or about the date hereof);

(iii) the amendment agreement in respect of the Account Charge relating to the HK Collection Account, together with any and all notices and acknowledgements entered into in connection therewith; and

(iv) each of the Existing Program Debt Documents (as amended and restated on or about the date hereof).

(b) Security Confirmation. The Administrative Agent (or its counsel) shall have received from each of the Manager and any sub-managers, confirmations as to any existing security granted in connection with this Agreement and any other Secured Debt Documents.

(c) Fee Letters. Each of the Agent and the other Finance Parties party hereto shall have received from each other party thereto executed counterparts of any Fee Letters entered into in connection with this Agreement.

(d) Opinions. The Administrative Agent (or its counsel) and each Lender shall have received:

(i) a due execution, capacity and enforcement legal opinion from Marshall Islands’ counsel as to matters of Marshall Islands’ law, from Singapore counsel as to matters of Singapore law and/or from such other counsel as to matters of such other jurisdiction where any Obligor may be incorporated;

(ii) a legal opinion from Bermudan counsel as to matters of Bermudan law;

 

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(iii) legal opinion from Hong Kong counsel as to matters of Hong Kong law; and

(iv) a legal opinion from Milbank LLP as to matters of New York law.

(e) Corporate Documents. In respect of each of the Guarantor, the Borrower, each Vessel Owner and the Manager:

(i) a copy, certified by a duly authorized representative of such person to be a true, complete and up to date copy, of the constitutional documents of that person;

(ii) a copy, certified by a duly authorized representative of such person to be a true copy and as being in full force and effect and not amended or rescinded, of a resolution of the board of directors of such person:

(A) approving the terms of, and the transactions contemplated by, the Intercreditor Agreement and this Agreement and any other Loan Documents to which it is a party and resolving that it execute, deliver and perform the Loan Documents to which it is a party;

(B) authorizing a person or persons to execute and deliver, on behalf of that person, the Loan Documents to which it is party and any notices or other documents to be given pursuant thereto;

(iii) a copy, certified by a duly authorized representative of that person to be a true copy and as being in full force and effect and not amended or rescinded of the power of attorney (if any) issued by or on behalf of that person, and not amended or rescinded, authorizing the execution by the attorneys named therein of the Loan Documents to which it is a party; and

(iv) specimen signatures of the signatories of that person (including any attorney named in the power of attorney referred to in paragraph (iii) above), certified by an officer of that person.

(f) “Know your customer”.

(i) Each of the Finance Parties shall have received satisfactory information in order to satisfy their respective “know your customer” requirements.

(ii) To the extent the Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, at least five days prior to the Restatement Date, any Lender that has requested, in a written notice to the Borrower at least 10 days prior to the Restatement Date, a Beneficial Ownership Certification in relation to the Borrower shall have received such Beneficial Ownership Certification (provided that, upon the execution and delivery by such Lender of its signature page to this Agreement, the condition set forth in this Section (ii) shall be deemed to be satisfied).

(g) Fees and Expenses. The Obligors shall have paid all fees, costs and expenses (including legal fees and expenses) agreed in writing to be paid by it to the Finance Parties in connection herewith (including pursuant to the Fee Letters) to the extent invoiced at least two (2) Business Days prior to the Restatement Date (and, in the case of expenses, including legal fees and expenses), provided that any amounts not invoiced two (2) Business Days prior to the Restatement Date shall be paid promptly, and not later than 10 days after, demand therefor.

 

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(h) Representations and Warranties. The representations and warranties made in Article 3 are true and correct.

(i) No Default. No Default is outstanding or would result from the Restatement Date.

(j) Other Documents. The Administrative Agent shall have received such other documents as the Administrative Agent or the Required Lenders (through the Administrative Agent) may reasonably request.

SECTION 4.05 Post-Restatement Items. Within 1 Business Day of the Restatement Date, the Administrative Agent shall have received evidence satisfactory to it that the Account Bank in respect of the Collection Account, has received and acknowledged receipt of, a copy of the Intercreditor Agreement (as amended and restated on or about the date hereof).

ARTICLE V

AFFIRMATIVE COVENANTS

Until the Commitments have expired or been terminated and all Obligations shall have been paid in full, the Borrower covenants and agrees with the Lenders that:

SECTION 5.01 Financial Statements. The Borrower will furnish to the Administrative Agent and each Lender: (a) the audited consolidated financial statements of the Guarantor for each of its financial years ending after the Restatement Date; and (b) quarterly consolidated statements of the Guarantor for each quarter of each of their financial years ending after the Restatement Date. All financial statements must be supplied promptly after they are available and: (i) in the case of audited financial statements, within 180 days of the end of the relevant financial period; and (ii) in the case of quarterly financial statements, within 90 days of the end of the relevant financial period. The Borrower must ensure that each set of the financial statements supplied under this Agreement fairly represents in all material respects the financial condition (consolidated or otherwise) of the Guarantor as at the date to which those financial statements were drawn up, subject, in the case of interim financial statements, to year-end adjustments and the absence of footnotes. The Borrower must notify the Administrative Agent of any change to the basis on which the Guarantor’s audited financial statements are prepared. If requested by the Administrative Agent, the Borrower must supply or procure that the following are supplied to the Administrative Agent: (A) a full description of any change notified above; and (B) sufficient information to enable the Lenders to make a proper comparison between the financial position shown by the set of financial statements prepared on the changed basis and its most recent audited consolidated financial statements delivered to the Administrative Agent and the Lenders under this Agreement. If requested by the Administrative Agent, the Guarantor must enter into discussions for a period of not more than thirty (30) days with a view to agreeing to any amendments required to be made to this Agreement to place the Administrative Agent and the Lenders in the same position as it would have been in if the change had not happened. If no such agreement is reached on the required amendments to this Agreement, the Borrower must ensure that the Guarantor’s or its auditors certify those amendments; the certificate of the auditors will be, in the absence of manifest error, binding on all the Parties.

 

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SECTION 5.02 Compliance Certificates. The Borrower will deliver to the Administrative Agent a Compliance Certificate certified by the Borrower and the Guarantor in the form set out in Exhibit B on the following dates:

(a) within 2 Business Days following each Determination Date;

(b) five (5) days prior to a Vessel Disposition and if any related Net Sale Proceeds shall be used by the Borrower in making a prepayment in accordance with this Agreement and Section 4.02(e) of the Intercreditor Agreement, as of the date of such prepayment; or

(c) the date of any Total Loss of a Collateral Vessel (as determined by the Administrative Agent and notified to the Borrower);

(d) five (5) days prior to a Vessel Substitution Date;

(e) upon the release of any Security Assets; and

(f) upon any Borrowing Date.

Each Compliance Certificate supplied by the Borrower and the Guarantor shall, amongst other things, set out (in reasonable detail) computations as to compliance with the financial covenants set forth in Section 6.09 below and the Concentration Limit Requirements and must be signed by an officer of the Guarantor.

SECTION 5.03 Valuation.

(a) The valuation of a Collateral Vessel shall be the mean average of two valuations each certified in Dollars and carried out by two of the Approved Valuers (without physical inspection of the relevant Collateral Vessel), reporting to the Administrative Agent by way of written reports in form and substance satisfactory to the Administrative Agent (acting reasonably) on the basis of a sale for prompt delivery of the Collateral Vessel for cash (free of Security Interests), on a without charter basis and at arm’s-length on normal commercial terms as between willing seller and buyer.

(b) There shall be deducted from any value or valuation produced in accordance with this Section 5.03 an amount equal to the sum of (i) the amount which is owing at such time plus (ii) the amount which is scheduled to become due prior to the due date of the next valuation pursuant to clause (d) of this Section 5.03, in each case under the foregoing clauses (b)(i) and (ii), solely to the extent such amount is secured on the Collateral Vessel concerned by any prior or equal ranking Security Interest (other than in favor of the Security Trustee to secure the Secured Obligations).

(c) Prior to each Borrowing Date in respect of the acquisition of one or more Collateral Vessels, the Borrower will procure a valuation in relation to each such Collateral Vessel, on the basis described in subsections 5.03(a) and (b) above.

(d) In respect of the Collateral Vessels, the Borrower will procure updated valuations on the basis described in this Section 5.03 every six months as of December 31 and June 30, provided that if a BB Event occurs and is not cured on the immediately succeeding Payment Date, the Borrower shall procure updated valuations on each Determination Date until such BB Event is cured. Such valuations shall be (or have been) used as the basis for determining the BB Ratio and shall be attached to each Compliance Certificate delivered pursuant to Section 5.02.

 

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(e) The Borrower will procure in favor of the Administrative Agent and the Approved Valuers, all such information as they may reasonably require in order to effect such valuations.

(f) All valuations shall be at the expense of the Borrower.

(g) Any valuation under this Section 5.03 shall be binding and conclusive (save for manifest error).

SECTION 5.04 Access to Books and Records. Upon the request of the Administrative Agent, the Obligors shall provide the Administrative Agent and any of its representatives, professional advisors and contractors with access to, and permit inspection of, its books and records, in each case at reasonable times and upon reasonable notice; provided that unless an Event of Default has occurred and is continuing, such inspections shall not occur more than one time during any calendar year.

SECTION 5.05 Information - miscellaneous.

(a) Each of the Borrower and the Guarantor must supply to the Administrative Agent in sufficient copies (which may take the form of an electronic copy) for all the Lenders:

(i) information with respect to the Collateral Vessels reasonably requested by Administrative Agent and copies of any publicly available information regarding the Obligors;

(ii) promptly upon becoming aware of them, details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against it and which would reasonably be expected, if adversely determined, to have a Material Adverse Effect;

(iii) promptly upon becoming aware of them, details of any claim, lawsuit, action, proceedings or investigation which are current, threatened or pending against it with respect to Sanctions; and

(iv) promptly on request (i) such further information, in sufficient copies for all the Lenders, regarding the financial condition and operations of the Obligors as the Administrative Agent or as the Lenders may reasonably request and (ii) information and documentation reasonably requested by the Administrative Agent or any Lender for purposes of compliance with the Beneficial Ownership Regulation.

SECTION 5.06 Notification of Default.

(a) Unless the Administrative Agent has already been so notified, the Borrower must notify the Administrative Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence.

(b) Promptly on request by the Administrative Agent but not more often than once in any 3 month period, unless the Administrative Agent, acting reasonably, believes an Event of Default has occurred and is continuing (in which event the Administrative Agent shall specify the applicable Event of Default and shall be entitled to make such requests as and when it considers it appropriate to do so), the Borrower must supply to the Administrative Agent a certificate, signed by two (2) of its authorized signatories on its behalf, certifying that no Event of Default is continuing or, if an Event of Default is continuing, specifying the Event of Default and the steps, if any, being taken to remedy it.

 

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SECTION 5.07 Know your customer checks.

(a) If:

(i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;

(ii) any change in the status of an Obligor after the date of this Agreement; or

(iii) a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,

obliges the Administrative Agent or any Lender (or, in the case of Section 5.07(a)(iii), any prospective new Lender) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, the Borrower shall promptly upon the request of the Administrative Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Administrative Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in Section 5.07(a)(iii), on behalf of any prospective new Lender) in order for the Administrative Agent, such Lender or, in the case of the event described in Section 5.07(a)(iii), any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Loan Documents,

(b) Each Lender shall promptly upon the request of the Administrative Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Administrative Agent (for itself) in order for the Administrative Agent to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Loan Documents.

(c) The Borrower shall promptly upon the request of the Administrative Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Administrative Agent (for itself or on behalf of any Lender) or any Lender in order for the Administrative Agent or such Lender to refresh and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Loan Documents, provided that the Borrower shall not be required to comply with any such request from the Administrative Agent or any Lender more than once in any twelve (12) month period.

SECTION 5.08 Use of websites. The Borrower acknowledges and agrees that any information under this Agreement may be delivered to a Lender (through the Administrative Agent) on to an electronic website if:

(a) the Administrative Agent and the Lender agree;

(b) the Administrative Agent appoints a website provider and designates an electronic website for this purpose;

(c) the designated website is used for communication between the Administrative Agent and the Lenders;

 

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(d) the Administrative Agent notifies the Lenders of the address and password for the website;

(e) the information can only be posted on the website by the Administrative Agent; and

(f) the information posted is in a format agreed between the Borrower and the Administrative Agent.

The cost of the website shall be borne by the Borrower, subject to such cost being agreed by the Borrower beforehand. Any Lender may request, through the Administrative Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the designated website. The Borrower shall at its own cost comply with any such request within ten (10) Business Days.

SECTION 5.09 Authorizations. Each Obligor must promptly obtain, maintain and comply, in all material respects, with the terms of any authorization required under any Applicable Law to enable it to perform its obligations under, or for the validity or enforceability of, any Loan Document.

SECTION 5.10 Compliance with laws. Each Obligor must comply and must procure that the Manager complies in all material respects with all Applicable Laws to which it is subject.

SECTION 5.11 Pari passu ranking. Each Obligor must ensure that its payment obligations under the Loan Documents rank at least pari passu with all its other present and future unsecured and unsubordinated payment obligations, except for obligations mandatorily preferred by law applying to companies generally.

SECTION 5.12 Place of business. Each Obligor must:

(a) establish and maintain a place of business in, and shall keep its corporate documents and records at any of, Hong Kong, the Republic of Singapore and Vancouver, or any of them, provided the Administrative Agent is satisfied that such establishment in such location does not adversely affect the validity, enforceability or effectiveness of any Loan Document and does not give rise to any requirement under any Applicable Law for a deduction for withholding Tax; and

(b) except with respect to the Guarantor, will not establish, or do anything as a result of which it would be deemed to have, a place of business in any other location other than Hong Kong, the Republic of Singapore or Vancouver without the consent of the Administrative Agent (acting on the instructions of the Required Lenders, such consent not to be unreasonably withheld or delayed).

SECTION 5.13 Security. Each Obligor:

(a) will procure that each Mortgage to which it is a party is, and continues to be, registered as a first priority mortgage on the registry of the relevant Approved Flag State;

(b) without prejudice to paragraph (a) will procure that the Mortgages and any other security conferred by it under any Security Document are registered as a first priority interest with the relevant authorities within the period prescribed by the Applicable Laws and is maintained and perfected with the relevant authorities;

(c) will at its own cost, use best efforts to ensure that any Loan Document to which it is a party validly creates the obligations and Security Interests which it purports to create; and

 

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(d) without limiting the generality of paragraph (a) above, will at its own cost, promptly register, file, record or enroll any Loan Document to which it is a party with any court or authority, pay any stamp, registration or similar tax payable in respect of any such Loan Document, give any notice or take any other step which, in the reasonable opinion of the Administrative Agent, is or has become necessary for any such Loan Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.

SECTION 5.14 Separateness Covenants. Each Obligor (other than the Guarantor) shall conduct its business such that it is a separate and readily identifiable business from, and independent of, any Unrelated Party, and further covenants as follows:

(a) Each Obligor (other than the Guarantor) will observe all corporate formalities necessary to remain a legal entity separate and distinct from, and independent of, each Unrelated Party;

(b) Each Obligor (other than the Guarantor) shall maintain its assets and liabilities separate and distinct from those of each Unrelated Party other than the Borrower, and will not commingle its assets with those of any Unrelated Party other than the Borrower;

(c) Each Obligor (other than the Guarantor) shall maintain its accounts and funds separate and distinct from the accounts and funds of each Unrelated Party other than the Borrower and will receive, deposit, withdraw and disburse its funds separately from any funds of any Unrelated Party other than the Borrower;

(d) Each Obligor (other than the Guarantor) shall maintain records, books, accounts and minutes separate from those of any Unrelated Party;

(e) Each Obligor (other than the Guarantor) shall conduct its own business in its own name, and not in the name of any Unrelated Party;

(f) Each Obligor (other than the Guarantor) shall maintain an arm’s-length relationship with its Affiliates;

(g) Each Obligor (other than the Guarantor) shall maintain separate financial statements from each Unrelated Party, or if part of a consolidated group, then it will be shown as a separate member of such group;

(h) Each Obligor (other than the Guarantor) shall pay its own liabilities and obligations out of its own funds, whether in the ordinary course of business or not, as a legal entity separate from each Unrelated Party, provided that liabilities and obligations of Vessel Owners may be paid by Borrower;

(i) Each Obligor (other than the Guarantor) shall use separate invoices and checks from those of each Unrelated Party;

(j) Each Obligor (other than the Guarantor) shall hold itself out as a separate entity, and correct any known misunderstanding regarding its status as a separate entity;

(k) Each Obligor (other than the Guarantor) shall not agree to pay or become liable for any Indebtedness of any Unrelated Party;

(l) Each Obligor (other than the Guarantor) shall not hold out that it is a division of any Unrelated Party, or that any Unrelated Party is a division of it;

 

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(m) Each Obligor (other than the Guarantor) shall not induce any third party to rely on the creditworthiness or any Unrelated Party other than the Guarantor in order that such third party will be induced to contract with it;

(n) Each Obligor (other than the Guarantor) shall not enter into any transactions between it and any Unrelated Party that are more favorable to the Unrelated Party than transactions that the parties would have been able to enter into at such time on an arm’s-length basis with a non-affiliated third party, other than any agreements in effect on the Closing Date; and

(o) Each Obligor (other than the Guarantor) shall observe all corporate or other procedures required under applicable law and under its constitutive documents; and

(p) Each Obligor (other than the Guarantor) shall procure that each of its directors will act in accordance with their duties at law and to exercise independent judgment, and shall not in breach of those duties, act solely in accordance with any direction, opinion, recommendation or instruction of any Unrelated Party in relation to the approval or rejection of, or the exercise of any voting power in relation to, any transaction approval requirements.

SECTION 5.15 Registration of the Collateral Vessels. Each Obligor shall and procure that the Manager shall:

(a) procure and maintain the valid and effective provisional registration of the Collateral Vessels under the flag of an Approved Flag State and shall effect permanent registration of the Collateral Vessel within two months following the Borrowing Date, and shall ensure nothing is done or omitted by which the registration of the Collateral Vessels would or might be defeated or imperiled; and

(b) not change the name or port of registration of the Collateral Vessels without the prior written notice to the Administrative Agent.

SECTION 5.16 Classification and repair. Each Obligor will, and will procure that the Manager will:

(a) ensure that the Collateral Vessels are surveyed from time to time as required by the Classification Society in which that Collateral Vessel is for the time being entered and maintain and preserve each Collateral Vessel in good working order and repair, ordinary wear and tear excepted, and in any event in such condition as will entitle each to classification free of all recommendations or conditions against class that are not overdue;

(b) procure that all repairs to or replacement of any damaged, worn or lost parts or equipment shall be effected in such manner (both as regards workmanship and quality of materials) as not to diminish the value of the Collateral Vessels;

(c) unless required to comply with clause (e) below, not remove any material part of any of the Collateral Vessels, or any item of equipment installed on any of the Collateral Vessels unless 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 Security Interest (other than any Permitted Liens) or any right in favor of any person other than the Administrative Agent and becomes on installation on that Collateral Vessel the property of the relevant Vessel Owner and subject to the security constituted by the relevant Security Document(s) provided that such Vessel Owner may install and remove equipment owned by a third party if the equipment can be removed without any risk of material damage to a Collateral Vessel;

 

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(d) ensure that each Collateral Vessel complies in all material respects with all Applicable Laws from time to time applicable to vessels registered under the laws and flag of the relevant Approved Flag State;

(e) not without the prior written consent of the Administrative Agent (such consent not to be unreasonably withheld), cause or permit to be made any substantial change in the structure, type or performance characteristics of any of the Collateral Vessels and provide notification of such substantial changes in structure, type or performance characteristics of any of the Collateral Vessels to the Administrative Agent and, furthermore, provide confirmation to the Administrative Agent that such substantial change in structure, type or performance characteristics of any of the Collateral Vessels shall not result in a breach of any covenant under this Agreement; provided, however, that this Section 5.16(e) shall not apply to (i) modifications of any Collateral Vessel with respect to ballast water treatment systems, bulbous bows, and scrubbers provided that there is no reduction in the value of such Collateral Vessel, and (ii) mandatory modifications to any Collateral Vessel required by Applicable Law from time to time;

(f) maintain a safe sustainable and socially responsible policy with respect to dismantling of the Collateral Vessels;

(g) ensure that any Collateral Vessel controlled by it or sold to an intermediary with the intention of being scrapped prior to the Discharge of Secured Obligations, is recycled at a recycling yard which conducts its recycling business in a socially and environmentally responsible manner, in accordance with the provisions of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 (the “Hong Kong Convention”) and/or Regulation (EU) No 1257/2013 of the European Parliament and of the Council of 20 November 2013 on ship recycling and amending Regulation (EC) No 1013/2006 and Directive 2009/16/EC, as applicable; and

(h) procure, with effect from the earlier of (i) December 31, 2020 and (ii) the date the Hong Kong Convention comes into force, obtain an Inventory of Hazardous Material in respect of the Collateral Vessel owned by it which shall be maintained until the Discharge of Secured Obligations. For the purposes of this clause, “Inventory of Hazardous Material” means a statement of compliance issued by the relevant Classification Society which includes a list of any and all materials known to be potentially hazardous present in a Collateral Vessel’s structure and equipment, also referred to as “List of Hazardous Materials” or “Green Passport”.

SECTION 5.17 Lawful and safe operation. Each Obligor will, and will procure that the Manager will:

(a) operate each Collateral Vessel and cause each Collateral Vessel to be operated in a manner consistent in all material respects with any and all laws, regulations, treaties and conventions (and all rules and regulations issued thereunder) from time to time applicable to that Collateral Vessel;

(b) not cause or permit any of the Collateral Vessels to trade with, or within the territorial waters of any country in which her safety could reasonably be expected to be imperiled by exposure to piracy, terrorism, arrest, requisition, confiscation, forfeiture, seizure, destruction or condemnation as prize;

(c) not cause or permit any of the Collateral Vessels to be employed in any manner which will or may give rise to any reasonable degree of likelihood that such Collateral Vessel would be liable to requisition, confiscation, forfeiture, seizure, destruction or condemnation as prize;

 

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(d) not cause or permit any of the Collateral Vessels to be employed in any trade or business which is forbidden by international law or is illicit or in knowingly carrying illicit or prohibited goods;

(e) in the event of hostilities in any part of the world (whether war be declared or not) not cause or permit any of the Collateral Vessels to be employed in carrying any contraband goods and that she does not trade in any zone after it has been declared a war zone by any authority or by any of that Collateral Vessel’s war risks Insurers unless that Collateral Vessel’s Insurers shall have confirmed to the Borrower that such Collateral Vessel is held covered under the Obligatory Insurances for the voyage(s) in question; and

(f) not charter any of the Collateral Vessels or permit any of the Collateral Vessels to serve under any contract of affreightment with any foreign country or national of any foreign country which would be contrary to Applicable Law or would render any Loan Document or the security conferred by the Security Documents unlawful.

SECTION 5.18 Repair of the Collateral Vessels. No Obligor will and each Obligor will procure that the Manager will not, put any of the Collateral Vessels into the possession of any person for the purpose of work being done upon her beyond the amount of US$5,000,000 (or equivalent), other than for classification or scheduled dry docking unless such person shall have given an undertaking to the Administrative Agent not to exercise any lien on that Collateral Vessel or Obligatory Insurances for the cost of that work or otherwise.

SECTION 5.19 Arrests and liabilities. Each Obligor will, and will procure that the Manager will, at all times:

(a) pay and discharge all obligations and liabilities whatsoever which have given or may give rise to liens (other than Permitted Liens) on or claims enforceable against any of the Collateral Vessels and take all reasonable steps to prevent a threatened arrest of any of the Collateral Vessels;

(b) notify the Administrative Agent promptly in writing of the levy of either distress on any of the Collateral Vessels or her arrest, detention, seizure, condemnation as prize, compulsory acquisition or requisition for title or use and (save in the case of compulsory acquisition or requisition for title or use) obtain her release within thirty (30) days;

(c) pay and discharge when due all dues, taxes, assessments, governmental charges, fines and penalties lawfully imposed on or in respect of any of the Collateral Vessels or any Obligor except those which are being disputed in good faith by appropriate proceedings (and for the payment of which adequate reserves have been provided or are and continue to be available) and provided that the continued existence of such dues, taxes, assessments, governmental charges, fines or penalties does not give rise to any reasonable degree of likelihood that any of the Collateral Vessels would be liable to arrest, requisition, confiscation, forfeiture, seizure, destruction or condemnation as prize; and

(d) pay and discharge all other obligations and liabilities whatsoever in respect of any of the Collateral Vessels and the Obligatory Insurances except those which are being disputed in good faith by appropriate proceedings (and for the payment of which adequate reserves have been provided or are and continue to be available) and provided that the continued existence of those obligations and liabilities in respect of any of the Collateral Vessels and the Obligatory Insurances does not give rise to any reasonable degree of likelihood that such Collateral Vessel would be liable to arrest, requisition, confiscation, forfeiture, seizure, destruction or condemnation as prize and provided always that each Collateral Vessel remains properly managed and insured at all times in accordance with the terms of the Loan Documents.

 

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SECTION 5.20 Environment. Each Obligor shall, and shall procure that the Manager shall, at all times:

(a) comply with all applicable Environmental Laws including, without limitation, requirements relating to the establishment of financial responsibility (and shall require that all Environmental Representatives of such Obligor comply with all applicable Environmental Laws and obtain and comply with all required Environmental Approvals, which Environmental Laws and Environmental Approvals relate to any of the Collateral Vessels or her operation or her carriage of cargo); and

(b) promptly upon the occurrence of any of the following events in relation to a Collateral Vessel, provide to the Administrative Agent a certificate of an officer of the Borrower or of the Borrower’s agents specifying in detail the nature of the event concerned:

(i) the receipt by the Borrower or any Environmental Representative (where the Borrower has knowledge of the receipt) of any Environmental Claim; or

(ii) any release of Hazardous Materials.

SECTION 5.21 Information regarding the Collateral Vessels. Each Obligor shall, and shall procure that the Manager shall, at all times:

(a) promptly notify the Administrative Agent of the occurrence of any accident, casualty or other event which has caused or resulted in or may cause or result in a Collateral Vessel being or becoming a Total Loss;

(b) promptly notify the Administrative Agent of any material requirement or recommendation made by any insurer or Classification Society or by any competent authority which is not complied with in a timely manner;

(c) if requested by the Administrative Agent (not more than once in any calendar year), provide the Administrative Agent with a schedule setting out and all intended dry dockings of any of the Collateral Vessels;

(d) promptly notify the Administrative Agent of any Environmental Claim being made in connection with any of the Collateral Vessels or its operation;

(e) promptly notify the Administrative Agent of any claim for breach of the ISM Code being made in connection with any of the Collateral Vessels or its operation;

(f) promptly notify the Administrative Agent of any claim for breach of the ISPS Code being made in connection with any of the Collateral Vessels or its operation;

(g) give to the Administrative Agent from time to time on request such information, in sufficient copies (which may take the form of electronic copies) for all the Lenders, as the Administrative Agent may reasonably request regarding any of the Collateral Vessels, her employment, position and engagements;

(h) provide the Administrative Agent with copies of the classification certificate of the Collateral Vessels and of all periodic damage or survey reports on any of the Collateral Vessels which the Administrative Agent may reasonably request;

 

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(i) promptly furnish the Administrative Agent with full information of any casualty or other accident or damage to any of the Collateral Vessels involving an amount in excess of US$1,500,000 (or equivalent);

(j) give to the Administrative Agent and its duly authorized representatives reasonable access to any of the Collateral Vessels for the purpose of conducting on board inspections and/or surveys of such Collateral Vessel provided that (i) the Administrative Agent shall co-operate with the Borrower in respect of the timing for and the place where such surveys take place in order to minimize disruption to the activities of such Collateral Vessel, and (ii) unless a Default has occurred and is continuing or such on board inspection and/or survey demonstrates that a Default is continuing, such inspections and/or surveys shall (x) not occur more than one time during any calendar year and (y) not take place at the expense of the Borrower; and

(k) if the Administrative Agent reasonably believes an Event of Default may have occurred and the Administrative Agent specifies such Event of Default, furnish to the Administrative Agent from time to time upon reasonable request certified copies of the ship’s log in respect of any of the Collateral Vessels.

SECTION 5.22 Provision of further information. Each Obligor shall, and shall procure that the Manager shall, as soon as practicable following receipt of a request by the Administrative Agent, provide the Administrative Agent, with sufficient copies for all the Lenders, with any additional or further financial or other information relating to any of the Collateral Vessels, the Obligatory Insurances or to any other matter relevant to, or to any provision of, a Loan Document which the Administrative Agent may reasonably request. The Borrower will furnish to the Administrative Agent and each Lender prompt written notice of any change in the information provided in the Beneficial Ownership Certification delivered to such Lender that would result in a change to the list of beneficial owners identified in such certification.

SECTION 5.23 Management. Each Obligor shall, and shall procure that the Manager shall, ensure that at all times:

(a) the relevant Collateral Vessel is managed by the Manager; and

(b) no Manager shall terminate or materially vary (or agree to materially vary) the terms of its management.

There shall be no change in the Manager or appointment of an alternative manager unless such replacement or alternative manager is a Manager and the terms of its appointment are approved by the Administrative Agent, and, simultaneously with its appointment, the management agreement with such manager is assigned to the Security Trustee and the manager enters into a Manager’s Undertaking, each on substantially the same terms as applicable to the previous manager, and such other documents and evidence of the kind referred to in Section 4.01 and Section 4.02 in respect of the management arrangements are provided in respect of such replacement management arrangements.

SECTION 5.24 Charters. Each Vessel Owner shall be entitled to let its Collateral Vessels, pursuant to an Eligible Charter or other Charter, provided always that each Vessel Owner complies with the terms of this Agreement and the other Loan Documents (including the Concentration Limit Requirements) and:

(a) if a Vessel Owner enters into a Charter in respect of a Collateral Vessel, it promptly notifies the Administrative Agent thereof;

 

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(b) such Vessel Owner shall either promptly obtain the consent (if required) of the Charterer to the assignment of that Charter pursuant to the General Assignment or ensure that the terms of such Charter permit assignment of that Charter without consent;

(c) such Vessel Owner serves a notice of assignment upon the Charterer pursuant to the terms of the General Assignment and, if such Vessel Owner is party to a Charter with a term that exceeds twelve (12) months (including any extension options) such Vessel Owner shall obtain an acknowledgement from the Charterer (and such Vessel Owner shall use reasonable endeavors to obtain such acknowledgement in a signed writing as opposed to by email, which shall otherwise be acceptable if such Charterer refuses to provide such acknowledgement in a signed writing);

(d) Vessel Owners may only enter into bareboat or demise charters with Eligible Bareboat Charterers, as such term is defined in Schedule 2.02, and, prior to entering into any such bareboat or demise charter, the Borrower shall procure that a Charterer’s Undertaking is provided by the applicable Charterer (unless, after using commercially reasonable efforts to procure such Charterer’s Undertaking, the Borrower is unable to reach agreement with the relevant Charterer for the provision of such Charterer’s Undertaking and the Administrative Agent consents to the foregoing). In addition, the Borrower shall procure that any such bareboat or demise charter includes an undertaking from the Charterer to the effect that such Charterer will not permit the use or operation of the applicable Collateral Vessel (i) in any country or territory that at such time is the subject of Sanctions, or (ii) in any other manner that will result in a violation by any Person, the Finance Parties or any other person participating in the Program Debt (whether as underwriter, advisor, investor or otherwise) of Sanctions;

(e) Vessel Owners shall procure the prior written consent of the Administrative Agent for any charter where more than six (6) months charterhire is paid in advance;

(f) Vessel Owners shall procure the prior written consent of the Administrative Agent for any arrangement under which Earnings of any Collateral Vessel may be shared with anyone else; and

(g) Vessel Owners shall procure the prior written consent of the Administrative Agent for any charter with any Affiliate of the Guarantor or which is otherwise than on arm’s length terms.

SECTION 5.25 Termination of Eligible Charters. At all times until the Maturity Date, each Obligor shall advise the Administrative Agent of any of the following events:

(a) any breach (other than a technical breach which is cured promptly) by the relevant Charterer or the Vessel Owner of the terms of an Eligible Charter of which such Obligor becomes aware;

(b) the termination of an Eligible Charter by either the relevant Vessel Owner or the relevant Charterer; and

(c) as soon as it becomes aware of such event, the occurrence of an insolvency event of the nature referred to in Section 7.01(f), (g), (h) or (j) in respect of a Charterer.

 

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SECTION 5.26 Scope of Obligatory Insurances. Each Vessel Owner will, or in the case of a Collateral Vessel subject to a Charter which is a demise or bareboat charter, shall procure that the Charterer of such Collateral Vessel will, in respect of each Collateral Vessel:

(a) at all times for a Collateral Vessel, keep that Collateral Vessel insured in the applicable Required Insurance Amount, in Dollars in the name of the relevant Vessel Owner or in the joint names of the Vessel Owner, the Charterer (if such Collateral Vessel is subject to a Charter which is a demise or bareboat charter), the Manager (except if such Collateral Vessel is subject to a Charter which is a demise or bareboat charter to a person not a member of the Guarantor Group), any crewing agents (except if the Collateral Vessel is subject to a Charter which is a demise or bareboat charter to a person not a member of the Guarantor Group) and (if the Administrative Agent so requires) the Security Trustee (provided that all such Persons, other than the Security Trustee, any third party crewing agents (outside the Guarantor Group) and, in respect of protection and indemnity liability insurances only, any crewing agents within the Guarantor Group, have provided an assignment of their interests in such insurances to the Security Trustee or, in the case of Collateral Vessels that are subject to a demise or bareboat charter, to the relevant Vessel Owner or the Security Trustee (provided further that in such cases, the terms of any assignment of insurances in favor of the relevant Vessel Owner shall expressly provide that the Vessel Owner shall assign its rights thereunder in favor of the Security Trustee, and the relevant Vessel Owner provides such onward assignment and assignment of its own interests in such insurances to the Security Trustee)) without the Administrative Agent or the Security Trustee being liable for but having the right to pay premiums, through brokers approved by the Administrative Agent against fire and usual marine risks (including hull and machinery and Excess Risks) with approved underwriters or insurance companies approved by the Administrative Agent and by policies in form and content approved by the Administrative Agent with a deductible which is a Required Deductible Amount or in an amount reasonably satisfactory to the Administrative Agent;

(b) at all times for a Collateral Vessel, keep that Collateral Vessel insured in the applicable Required Insurance Amount in the same manner as above against war risks (including risks of mines and all risks, whether or not regarded as war risks, London Blocking and Trapping Addendum and Lost Vessel clause, excepted by the free of capture and seizure clauses in the standard form of Lloyds marine policy) either:

(i) with underwriters or insurance companies approved by the Administrative Agent and by policies in form and content approved by the Administrative Agent; or

(ii) by entering the relevant Collateral Vessel in an approved war risks association,

and for the avoidance of doubt, such war risks insurance will include protection and indemnity liability up to at least the applicable Required Insurance Amount, excluding any liability in respect of death, injury or damage to crew, and shall include a deductible which is a Required Deductible Amount or in an amount reasonably satisfactory to the Administrative Agent;

(c) at all times for a Collateral Vessel, keep that Collateral Vessel entered in respect of her full value and tonnage in an approved protection and indemnity association against all risks as are normally covered by such protection and indemnity association (including pollution risks and the proportion not recoverable in case of collision under the running down clause inserted in the ordinary Lloyds policies), such cover for pollution risks to be for:

(i) a minimum amount of US$1,000,000,000 or such other amount of cover against pollution risks as shall at any time be comprised in the basic entry of each Collateral Vessel with either a protection and indemnity association which is an acceptable member of either the International Group of protection and indemnity associations (or any successor organization designated by the Administrative Agent for this purpose) or the International Group (or such successor organization) itself; or

 

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(ii) if the International Group or any such successor ceases to exist or ceases to provide or arrange any cover for pollution risks (or any supplemental cover for pollution risks over and above that afforded by the basic entry of each Collateral Vessel with its protection and indemnity association), such aggregate amount of cover against pollution risks as shall be available on the open market and by basic entry with a protection and indemnity association for ships of the same type, size, age and flag as each respective Collateral Vessel,

provided that, if any Collateral Vessel has ceased trading or is in lay up and in either case has unloaded all cargo, the level of pollution risks cover afforded by ordinary protection and indemnity cover available through a member of the International Group or such successor organization or, as the case may be, on the open market in such circumstances shall be sufficient for such purposes; and

(d) at all times for a Collateral Vessel, whenever any Collateral Vessel is trading to Japanese territorial waters and when so required by the Administrative Agent, maintain in full force and effect social responsibility insurance in respect of the Collateral Vessel with underwriters or insurance companies approved by the Administrative Agent and by policies in form and content approved by the Administrative Agent, provided always that a first class Vessel Owner or operator of vessels such as the Collateral Vessels would maintain and effect such social responsibility insurance.

SECTION 5.27 Obligatory Insurances. Without prejudice to its obligations under Section 5.26, each Vessel Owner will or, in the case of a Collateral Vessel subject to a Charter which is a demise or bareboat charter to a person who is not a member of the Guarantor Group, shall procure that the Charterer of such Collateral Vessel will:

(a) not without the prior consent of the Administrative Agent materially alter any Obligatory Insurance nor make, do, consent or agree to any act or omission which would or might render any Obligatory Insurance invalid, void, voidable or unenforceable or render any sum paid out under any Obligatory Insurance repayable in whole or in part;

(b) not cause or permit any Collateral Vessel to be operated or traded in any way inconsistent with the provisions or warranties of, or implied in, or outside the cover provided by, or which would trigger the exclusion clause (or similar) under, any Obligatory Insurance or to be engaged in any voyage or to carry any cargo not permitted by any Obligatory Insurances without first covering the relevant Collateral Vessel in the relevant Required Insurance Amount and her freights for an amount approved by the Administrative Agent in Dollars or another approved currency with the Insurers;

(c) duly and punctually pay when due all premiums, calls, contributions or other sums of money from time to time payable in respect of any Obligatory Insurance;

(d) renew all Obligatory Insurances at least three (3) days before the relevant policies or contracts expire and procure that the approved brokers and/or war risks and protection and indemnity clubs and associations shall promptly confirm in writing to the Administrative Agent as and when each renewal is effected;

(e) forthwith upon the effecting of any Obligatory Insurance, give written notice of the insurance to the Administrative Agent stating the full particulars (including the dates and amounts) of the insurance, and on request produce the receipts for each sum paid by it pursuant to paragraph (c) above;

 

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(f) not settle, release, compromise or abandon any claim in respect of any Total Loss unless the Administrative Agent is satisfied that such release, settlement, compromise or abandonment will not prejudice the interests of the Finance Parties under or in relation to any Loan Document;

(g) arrange for the execution and delivery of such guarantees as may from time to time be required by any protection and indemnity or war risks club or association;

(h) procure that the interest of the Security Trustee is noted on all policies of insurance;

(i) procure that a loss payee provision in the form scheduled to the Insurances Assignment is endorsed on all policies of insurance relating to the Collateral Vessels;

(j) obtain from the relevant insurance brokers and P&I Club letters of undertaking in the forms scheduled to the Insurances Assignments; and

(k) in the event that the Vessel Owner (or, where applicable, the relevant Charterer of a Collateral Vessel which is subject to a Charter which is a demise or bareboat charter to a person who is not a member of the Guarantor Group) receives payment of any moneys under the Insurance Assignment, save as provided in the loss payable clauses scheduled to the Insurance Assignment, forthwith pay over the same to the Security Trustee and, until paid over, such moneys (to the extent they are held by an Obligor) shall be held in trust for the Security Trustee.

SECTION 5.28 Power of Administrative Agent to insure. If the Obligors (or, where applicable, the relevant Charterer(s) of a Collateral Vessel which is subject to a Charter which is a demise or bareboat charter to a person who is not a member of the Guarantor Group) fail to effect and keep in force Obligatory Insurances in accordance with this Agreement, it shall be permissible, but not obligatory, for the Administrative Agent to effect and keep in force insurance or insurances in the amounts required under this Agreement and entries in a protection and indemnity association or club and, if it deems necessary or expedient, to insure the war risks upon any Collateral Vessel, and the Borrower will reimburse the Administrative Agent for the costs of so doing.

SECTION 5.29 ISM Code. Each Vessel Owner shall, and shall procure that the Manager shall (or, in the case of a Collateral Vessel which is subject to a Charter which is a demise or bareboat charter to a person who is not a member of the Guarantor Group, shall procure that the Charterer of such Collateral Vessel shall):

(a) at all times be responsible for compliance by itself and by each Collateral Vessel with the ISM Code; and

(b) at all times ensure that:

(i) each Collateral Vessel has a valid Safety Management Certificate (as defined in the ISM Code);

(ii) each Collateral Vessel is subject to a safety management system (as defined in the ISM Code) which complies with the ISM Code; and

(iii) there is a valid Document of Compliance (as defined in the ISM Code), which is held on board the Collateral Vessel,

 

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(c) and shall deliver to the Administrative Agent, a copy of a valid Safety Management Certificate and a valid Document of Compliance in respect of the relevant Collateral Vessel, in each case duly certified by an officer of the Borrower;

(d) promptly notify the Administrative Agent of any actual or, upon becoming aware of the same, threatened withdrawal of an applicable Safety Management Certificate or Document of Compliance;

(e) promptly notify the Administrative Agent of the identity of the person ashore designated for the purposes of paragraph 4 of the ISM Code and of any change in the identity of that person; and

(f) promptly upon becoming aware of the same notify the Administrative Agent of the occurrence of any material accident or major non-conformity (as defined in the ISM Code) requiring action under the ISM Code.

SECTION 5.30 ISPS Code. Each Obligor shall, and shall procure that the Manager shall, or, in the case of a Collateral Vessel subject to a Charter which is a demise or bareboat charter to a person who is not a member of the Guarantor Group, shall procure that the Charterer of such Collateral Vessel at all times shall:

(a) comply and be responsible for compliance by itself and by each Collateral Vessel with the ISPS Code; and

(b) ensure that:

(i) each Collateral Vessel has a valid International Ship Security Certificate;

(ii) each Collateral Vessel’s security system and its associated security equipment comply with section 19.1 of Part Appendix 1 of the ISPS Code;

(iii) each Collateral Vessel’s security system and its associated security equipment comply in all respects with the applicable requirements of Chapter XI-2 of SOLAS and Appendix 1 of the ISPS Code; and

(iv) an approved ship security plan is in place.

SECTION 5.31 Dry Docking. The Guarantor shall ensure that each Obligor shall meet all of that Obligor’s obligations with respect to the cost of scheduled dry docking in relation to the Collateral Vessel owned by such Obligor and that such costs are paid when due except those costs which are being disputed in good faith by appropriate proceedings (and for the payment of which adequate reserves have been provided or are and continue to be available).

SECTION 5.32 Rating. If, following the Closing Date, the Obligors obtain a credit rating from a rating agency as required by any Program Debt, the Borrower shall, solely during the period for which such rating is required to be maintained by the applicable Program Debt, be required to maintain a rating with the relevant rating agency or any replacement rating agent selected by Borrower. For the avoidance of any doubt, the requirement to maintain a rating shall not be breached if the rating changes (upwards or downwards) and, if a rating is provided by a rating agency but, prior to its publication, the ratings process is withdrawn, the Borrower shall not be required to maintain such rating.

 

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SECTION 5.33 Taxation.

(a) Each Obligor shall pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:

(i) such payment is being contested in good faith;

(ii) in each case to the extent required by GAAP, adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to the Administrative Agent under Section 5.01; and

(iii) such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse Effect.

(b) No Obligor (other than the Guarantor) may change its residence for Tax purposes except with the consent of the Administrative Agent, such consent not to be unreasonably withheld.

SECTION 5.34 Decarbonization Certificates

(a) The Borrower must supply to, or procure the supply to, the Administrative Agent on or before 10 Business Days prior to each Delta Test Date, in sufficient copies (which may take the form of an electronic copy) for the Lead Sustainability Coordinator and all Lenders:

(i) all Compliance Data in support of the Decarbonization Certificate to be delivered on the next in time Delta Test Date and such other information required by the Lead Sustainability Coordinator (requested by the Administrative Agent if so directed by or on behalf of the Lead Sustainability Coordinator) in order to populate the Draft DC (defined below) in accordance with sub-section 5.34(b), provided that where such Collateral Vessel is subject to a bareboat or demise charter with an Eligible Bareboat Charterer, the Borrower shall use reasonable efforts to obtain such Compliance Data from that Eligible Bareboat Charterer. Where the Borrower is unable to procure such Compliance Data after reasonable efforts, the Lead Sustainability Coordinator shall have reference to corresponding reasonable estimates for the applicable Delta Test Period obtained from a Classification Society at the Borrower’s cost, in place of any unavailable “Compliance Data” when calculating the AER and/or the Collateral Vessel Delta on the relevant Delta Test Date; and

(ii) the relevant extracts of the provisions of any Qualifying Charter Contract including a Sustainability Linked Charter Mechanism, certified by a Responsible Officer of the Borrower,

provided always that none of the Lenders shall publicly disclose such information delivered under this Section 5.34(a) with the identity of the relevant vessel without the prior written consent of the Borrower. For the avoidance of doubt, such information shall be “Confidential Information” for the purposes of Section 9.12 (Treatment of Certain Information; Confidentiality) but the Borrower acknowledges that, in accordance with the Poseidon Principles, such information will form part of the information published regarding each relevant Lender’s portfolio climate alignment,

and provided further that if the Borrower fails to comply with the conditions set out in, or deliver when due any of the documents and/or items contemplated by, this Section 5.34, then no Default or Event of Default will result therefrom, and the only consequence shall be a pricing adjustment (if applicable) to the Margin as otherwise contemplated by this Agreement.

 

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(b) Within 5 Business Days of receipt of the Compliance Data and any other information to be provided in accordance with Section 5.34(a) above, the Lead Sustainability Coordinator shall send to the Borrower, with a copy to the Administrative Agent, a draft (which may be in electronic form), of the populated Decarbonization Certificate to be delivered by the Borrower for the applicable Delta Test Period, on the next in time Delta Test Date ( “Draft DC”).

(c) Subject to any revisions and/or amendments to the Draft DC prepared by the Lead Sustainability Coordinator pursuant to Section 5.34(b) above being prior agreed in writing between the Administrative Agent, the Lead Sustainability Coordinator and the Borrower (the “Amended Draft DC”), on or before 2 Business Days before such next in time Delta Test Date, the Borrower must supply to, or procure the supply to, the Administrative Agent in sufficient copies (which may take the form of an electronic copy) for the Lead Sustainability Coordinator and all Lenders, a completed Decarbonization Certificate for the applicable Delta Test Period, in a form reflective of either the Draft DC or Amended Draft DC, as applicable, and which is signed by a Responsible Officer of the Borrower.

(d) Notwithstanding anything in this Agreement to the contrary, the Lead Sustainability Coordinator shall not:

(i) have any duty to verify and/or confirm the accuracy of any information, calculations and/or other details (including but not limited to any Compliance Data provided to it in accordance with this Section 5.34) included and/or reflected in any Draft DC, Amended Draft DC and/or Decarbonization Certificate; and

(ii) shall not be liable to the Borrower or any other party for:

(A) any inaccuracies or errors in such information, calculations and/or other details (including but not limited to transposing any Compliance Data provided to it in accordance with this Section 5.34) included and/or reflected in any Draft DC, Amended Draft DC and/or Decarbonization Certificate; and/or

(B) any failure to deliver, or delay in delivering, a Draft DC to and/or any failure to agree, or delay in agreeing an Amended DC with, the Borrower and the Administrative Agent in accordance with this Section 5.34, if such failure and/or delay in delivering any Draft DC and/or agreeing any Amended DC, arises as a result of, or in connection with, the Borrower’s (x) failure to deliver and/or delay in delivering, any Compliance Data and/or other information required by the Lead Sustainability Coordinator and/or a Decarbonization Certificate, and/or (y) failure to agree, or delay in agreeing, any Amended DC, in each case in accordance with the terms of this Section 5.34,

and the Borrower hereby confirms and acknowledges for the benefit of the Lead Sustainability Coordinator, that notwithstanding any of the provisions of this Agreement, the contents of any Decarbonization Certificate, signed by a Responsible Officer of the Borrower and delivered in accordance with this Section 5.34, shall be verified by the Borrower only, and shall be true and accurate in all material respects.

 

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ARTICLE VI

NEGATIVE COVENANTS

Until the Commitments have expired or been terminated and all Obligations have been paid in full, the Borrower covenants and agrees with the Lenders that:

SECTION 6.01 Security Interests. Each Obligor shall not, and each Obligor shall procure that the Manager does not, create or permit to subsist any Security Interest over the Obligatory Insurances or any other Security Assets or any Related Contract other than:

(a) Permitted Liens; or

(b) with the prior written consent of the Administrative Agent.

SECTION 6.02 Mergers. No Obligor (other than the Guarantor) shall enter into any amalgamation, demerger, merger or corporate reconstruction (other than intercompany mergers and amalgamations which would not otherwise lead to a contravention of this Agreement or any other Loan Document).

SECTION 6.03 Special Purpose Covenants. Unless otherwise stated, references to “Obligor” in this Section 6.03 shall be deemed, for this Section only, to exclude the Guarantor:

(a) No Obligor shall have any employees.

(b) No Obligor shall enter into any contract or agreement with any Person, or conduct any business, or otherwise create or incur any liability to any Person, other than in connection with the acquisition, chartering and disposition of the Security Assets, the making of Loans or otherwise as permitted by the Loan Documents and activities ancillary thereto.

(c) No Obligor shall incur any Indebtedness other than (i) Indebtedness normally associated with the day to day operation of the Collateral Vessels, or otherwise in the normal course of business, (ii) Indebtedness under the Related Contracts and the Loan Documents, (iii) Indebtedness under Intra Group Loans.

(d) No Obligor (other than the Guarantor) shall principally engage in any business other than the direct or indirect ownership, operation and chartering of container vessels and any business incidental or related thereto. The Guarantor shall not principally engage in any business other than the direct or indirect ownership, operation and chartering of seagoing vessels and any business incidental or related thereto.

(e) No Obligor shall own, or otherwise have title to, any deposit account or securities account other than the Charged Accounts.

(f) No Obligor shall create or own any Subsidiary except, in the case of the Borrower, any Vessel Owner.

(g) No Obligor shall be party to any Intra Group Loan Agreement unless the lender under such Intra Group Loan Agreement has fully subordinated its rights thereunder and provided certain other undertakings in accordance with Section 5.02 of the Intercreditor Agreement and, in no circumstances, shall the maturity date in respect of any such Intra Group Loan occur on or prior to the Maturity Date.

SECTION 6.04 Payment of dividends. No Obligor shall pay any dividends or make any other distributions (whether by loan or otherwise) to shareholders unless, (a) under Applicable Law and accounting principles in its jurisdiction of incorporation, it is entitled to pay such dividends or make such other distribution, and (b) no Default has occurred and is continuing.

 

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SECTION 6.05 Vessel Substitutions. A Vessel Owner may not substitute a Collateral Vessel with one or more vessels (each a “Substitute Vessel”) unless such vessel substitution is completed subject to and in accordance with the following conditions:

(a) the Borrower provides notice thereof at least five (5) Business Days prior to the date that it wishes the Substitute Vessel to become a Collateral Vessel and the existing Collateral Vessel to be released as a Collateral Vessel;

(b) each Substitute Vessel satisfies the requirements for being a Collateral Vessel hereunder and, on the date on which it becomes a Collateral Vessel, the Administrative Agent shall receive all conditions precedent it would be entitled to receive under Article IV in form and substance satisfactory to the Administrative Agent;

(c) the Borrower provides a Compliance Certificate evidencing such substitution will not give rise to a Default, a Concentration Limit Event, a breach of the Guarantor Financial Covenants, a BB Event or a DSCR Cash Sweep Event, assuming for the purposes of the calculation of such requirements that the substitution had taken place, and no such event shall be continuing; and

(d) such Substitute Vessel shall become a Collateral Vessel on the same date as the existing Collateral Vessel ceases to be a Collateral Vessel for the purposes of the Loan Documents.

SECTION 6.06 Vessel Dispositions and Removals. A Vessel Owner may not sell or dispose of a Collateral Vessel (a “Vessel Disposition”) unless the Vessel Disposition is completed subject to and in accordance with the following conditions:

(a) the Administrative Agent shall have received five (5) Business Days’ prior written notice (a “Disposition Notice”) of any such Vessel Disposition from the Borrower, and such Disposition Notice shall specify the proposed date of the Vessel Disposition, the relevant Collateral Vessel subject of the Vessel Disposition, the proposed buyer, the purchase price, levels of cash deposit and/or letter of credit provided by or on behalf of the proposed buyer and the anticipated Net Sale Proceeds (it being acknowledged that such information may change);

(b) such Vessel Disposition shall not be permitted if, after giving effect to the application of the proceeds thereof, a Default, Concentration Limit Event, breach of the Guarantor Financial Covenants, BB Event or DSCR Cash Sweep Event would occur;

(c) such Vessel Disposition shall not be permitted at any time when a Default, a Concentration Limit Event, a breach of the Guarantor Financial Covenants, a BB Event or a DSCR Cash Sweep Event is continuing, unless such Vessel Disposition or the application of the proceeds thereof would cure such Default, Concentration Limit Event, breach of the Guarantor Financial Covenants, BB Event or DSCR Cash Sweep Event, as applicable; and

(d) the Administrative Agent shall have received no later than three (3) Business Days prior to the date of such Vessel Disposition a written confirmation from the Borrower:

(i) confirming that such Vessel Disposition is proceeding;

(ii) confirming the date on which such Vessel Disposition is scheduled to be completed (it being acknowledged that such date may change);

 

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(iii) incorporating a representation and warranty from the Borrower in connection with the matters referred to in subsections (b), (c) and (d) above and certifying the BB Ratio and DSCR Ratio following such Vessel Disposition (including the supporting calculations).

In addition, a Vessel Owner may from time to time designate any Collateral Vessel to cease to be a Collateral Vessel, and thereby cause such Vessel to cease to be subject to the terms and conditions of this Agreement, so long as the Vessel Owner would be permitted pursuant to the above provisions to sell or dispose of such Collateral Vessel in circumstances where the proceeds thereof are zero, assuming that all references to any disposition of such Collateral Vessel pursuant to the above provisions referred instead to its removal as a Collateral Vessel.

SECTION 6.07 Year end. No Obligor shall change its financial year end except with prior notice to the Administrative Agent and, in the case of any Obligor other than the Guarantor, prior consent of the Administrative Agent (not to be unreasonably withheld or delayed).

SECTION 6.08 Related Contracts. Subject to Obligors’ right to release, substitute and dispose of Collateral Vessels, no Obligor shall take any action, enter into any document or agreement or omit to take any action or to enter into any document or agreement which would, or could reasonably be expected to, cause any Obligatory Insurances or Management Agreement to cease to remain in full force and effect and shall use commercially reasonable efforts to procure that each other party to such Related Contract does not take any action, enter into any document or agreement or omit to take any action or to enter into any document or agreement which would, or could reasonably be expected to, cause such Related Contract to cease to remain in full force and effect.

SECTION 6.09 Financial Covenants.

(a) Borrowing Base Ratio. If on any BB Test Date it is determined that a BB Event has occurred and is continuing, the Borrower shall, on the next Payment Date, prepay the Loan in accordance with Section 4.02(a)(viii) of the Intercreditor Agreement; provided that the Borrower shall be permitted to deposit or pledge Additional Security pursuant to Section 6.10 in an amount sufficient to ensure that a BB Event is not continuing after giving effect to such pledge or deposit.

(b) Debt Service Coverage Ratio. On any Test Date a DSCR Cash Sweep Event shall occur if the DSCR Ratio is less than 1.25:1.

(c) Consolidated Tangible Net Worth. The Guarantor must ensure that its Consolidated Tangible Net Worth always equals or exceeds four hundred and fifty million Dollars ($450,000,000).

(d) Gearing. The Guarantor must ensure that its Total Borrowings are always less than 65% of its Total Assets.

(e) Interest and Principal Coverage Ratio. The Guarantor must ensure that its Interest and Principal Coverage Ratio is always greater than or equal to 1.1:1.

(f) Guarantor Cross Default. The Guarantor must ensure its Indebtedness is paid when due (having due regard to any applicable grace period), provided that it shall not be a breach of this subsection if the Guarantor fails to pay its Indebtedness when due but the aggregate amount of such Indebtedness is less than $50,000,000 or its equivalent.

 

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Each of the Guarantor Financial Covenants set forth in Sections 6.09(c) to (f) (inclusive) above shall be tested on each Determination Date by reference to each rolling twelve (12) month Measurement Period, and compliance shall be evidenced in the Compliance Certificates.

SECTION 6.10 Creation of Additional Security. The value of any additional security which the Borrower offers to provide pursuant to Section 6.09(a) will only be taken into account for the purposes of determining the BB Ratio if and when:

(a) that additional security, its value and the method of its valuation have been approved by the Administrative Agent (and, where required, the holders of any Additional Secured Debt), provided that (i) cash and (ii) any vessel which could be a Substitute Vessel (by meeting the criteria set forth in Section 6.05 and said conditions are met (other than, for the avoidance of doubt, the removal of any Collateral Vessel)), shall be approved additional security;

(b) a Security Interest over that security has been constituted in favor of the Security Trustee in an approved form and manner;

(c) the Loan Documents have been unconditionally amended in such a manner as the Administrative Agent and Borrower reasonably agree in consequence of that additional security being provided; and

(d) the Administrative Agent, or its duly authorized representative, has received such documents and evidence it may reasonably require in relation to that amendment and additional security including documents and evidence of the type referred to in Article IV in relation to that amendment and additional security and its execution and (if applicable) registration.

SECTION 6.11 No amendment to Related Contracts. No Obligor shall amend or agree to any material amendment to the Obligatory Insurances or the Management Agreements without the prior written consent of the Administrative Agent.

SECTION 6.12 Anti-corruption law. (a) Each Obligor and its Subsidiaries shall conduct their business in compliance with Anti-Corruption Laws; and (b) Each Obligor shall ensure that no proceeds of the Program Debt will be applied in a manner or for a purpose prohibited by Anti-Corruption Laws.

SECTION 6.13 Sanctions. (a) Each Obligor shall ensure that no proceeds of the Program Debt will be made available, directly or indirectly, to or for the benefit of, or used to fund any activities with or business of a Sanctioned Person, or in any country territory that, at the time of such funding, is the subject of Sanctions, or otherwise applied in a manner or for a purpose prohibited by Sanctions or Anti-Corruption Laws, or which would result in a violation of Sanctions by any person (including any person participating in the Program Debt, whether as underwriter, advisor, investor, lender, hedge provider, facility or security agent or otherwise); (b) each Obligor and its Subsidiaries shall remain in compliance with all Sanctions and shall implement a policy for Sanctions in line with the requirements in this Agreement; (c) no Obligor nor their respective Subsidiaries shall fund all or part of any repayment required to be made pursuant to Program Debt out of proceeds directly or indirectly derived from any business, activities or transactions which would be prohibited by Sanctions or which would otherwise cause any Person or a Lender to be in breach of Sanctions or to otherwise become the subject or target of Sanctions; (d) no Obligor nor their respective Subsidiaries shall (and shall procure that no Charterer of any Collateral Vessel will) operate, possess, use, dispose of or otherwise deal with, or procure or allow the ownership, operation, possession, use, disposal of or any other dealing with, each Collateral Vessel or part thereof for any purpose or to any person which would violate or cause any

 

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Finance Party to violate, when and as applicable, any Sanctions, any anti-terrorism law or any anti-corruption law in each case applicable to it; and (e) no Obligor will permit the use or operation of any Collateral Vessel (i) in any country or territory that at such time is the subject of Sanctions, (ii) by a Sanctioned Person, or (iii) in any other manner that will result in a violation by any Person, the Finance Parties or any other person participating in the Program Debt (whether as underwriter, advisor, investor or otherwise) of Sanctions.

SECTION 6.14 Additional Secured Debt. Each Obligor shall ensure that the terms of any Program Debt Documents (or amendments thereto and restatements thereof) entered into after the date hereof (other than terms related to interest rates and fees), shall (i) not be on more beneficial terms to the relevant Secured Parties thereunder than the terms of the Loan Documents are to the Finance Parties, and (ii) if such Additional Secured Debt shall be of the same facility or debt instrument type as the Obligations arising hereunder, not amortize more quickly, or have a shorter term, than the Obligations (unless prior to the effectiveness of such Program Debt Document or its amendment and/or restatement, such amendments are made to the Loan Documents to ensure the terms of the Loan Documents are at least as favorable as the terms of the relevant Program Debt Documents).

ARTICLE VII

EVENTS OF DEFAULT

SECTION 7.01 Events of Default. If any of the following events (each, an “Event of Default”) shall occur:

(a) any Obligor shall fail to pay any amount payable by it under the Loan Documents in the manner required under the Loan Documents, unless the non-payment is remedied within three Business Days of the due date;

(b) an Obligor shall fail to comply with any term of Sections 3.22, 5.26, 5.27(a), (b), (c) and (f), 6.01, 6.03, 6.09(c) to (e), 6.12 and 6.13;

(c) an Obligor shall fail to comply with any other term of the Loan Documents not already referred to in Section 7.01(b) above (excluding Section 5.34), unless the non-compliance: (i) is capable of remedy; and (ii) is remedied within thirty (30) days (or, in the case of Section 5.06(a), three (3) Business Days) of the earlier of (i) the date on which written notice of such failure is delivered to Guarantor and (ii) any Obligor having knowledge of such failure to comply;

(d) a representation made or repeated by an Obligor in any Loan Document or in any document delivered by or on behalf of the Obligor under any Loan Document is incorrect in any material respect when made or deemed to be repeated, unless the circumstances giving rise to the misrepresentation: (i) are capable of remedy; and (ii) are remedied within thirty (30) days of the earlier of (i) the date on which written notice of such misrepresentation is delivered to Guarantor and (ii) any Obligor having knowledge of such misrepresentation;

(e) a BB Event shall occur and continue uncured for more than six (6) months;

(f) any of the following occurs in respect of an Obligor: (i) any of its Indebtedness is not paid when due (after the expiry of any originally applicable grace period); (ii) any of its Indebtedness: (A) becomes prematurely due and payable; or (B) is placed on demand; or (C) is capable of being declared by a creditor to be prematurely due and payable or being placed on demand, in each case, as a result of an event of default (howsoever described) and after the expiry of any applicable grace period; or (iii) any commitment for its Indebtedness is cancelled or suspended as a result of an event of default (howsoever described), unless, in the case of the Guarantor, the aggregate amount of Indebtedness falling within (i) to (iii) above is less than US$50,000,000 or its equivalent;

 

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(g) any of the following occurs in respect of an Obligor: (i) it is deemed for the purposes of any Applicable Law to be, unable to pay its debts as they fall due or insolvent; (ii) it admits its inability to pay its debts as they fall due; (iii) it suspends making payments on any of its debts or announces an intention to do so; or (iv) a moratorium is declared in respect of any of its indebtedness, provided that if a moratorium occurs in respect of an Obligor, the ending of the moratorium will not remedy any Event of Default caused by the moratorium;

(h) any of the following occurs in respect of an Obligor: (i) any step is taken with a view to a moratorium, a composition, assignment or similar arrangement with any of its creditors; (ii) a meeting of its shareholders, directors or other officers is convened for the purpose of considering any resolution to petition for or to file documents with a court for its winding-up, administration or dissolution or any such resolution is passed; (iii) any person presents a petition, or files documents with a court for its winding-up, administration or dissolution; (iv) an order for its winding-up, administration or dissolution is made; (v) any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, receiver and manager, administrative receiver, administrator or similar officer is appointed in respect of it or any of its assets; (vi) its directors, shareholders or other officers request the appointment of or give notice of their intention to appoint a liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, receiver and manager, administrative receiver, administrator or similar officer; or (vii) any other analogous step or procedure is taken or appointment is made in any jurisdiction, provided that subsections (i) to (vii) above shall not apply to a frivolous or vexatious petition for winding-up presented by a creditor in respect of an Obligor which is being contested in good faith and with due diligence and is discharged or struck out within, in the case of an Obligor (other than Guarantor), thirty (30) days or, in the case of the Guarantor, sixty (60) days;

(i) any attachment, sequestration, distress, execution, enforcement action or analogous event affects any asset(s) of the Obligors and, in relation to the Guarantor only, the same is not discharged or stayed pending appeal within sixty (60) days;

(j) an Obligor suspends, ceases, or threatens to suspend, cease, to carry on all or, in the case of the Guarantor, a material portion of its business, provided that lay-up of a Collateral Vessel or other action in the ordinary course of business shall not constitute a suspension of business by a Vessel Owner for these purposes;

(k) (i) an Obligor (other than Guarantor) fails to comply with or pay any sum due from it under any final judgment or any final order made or given by any court of competent jurisdiction in a non-appealable judgment or order with respect to which the amount in controversy exceeds $25,000 or (ii) Guarantor fails to comply with or pay any sum due from it under any final judgment or any final order made or given by any court of competent jurisdiction in a non-appealable judgment or order with respect to which the amount in controversy exceeds $50,000,000;

(l) the Borrower ceases to be a direct wholly owned Subsidiary of the Guarantor;

(m) any Obligor (other than the Borrower or the Guarantor) ceases to be a wholly owned subsidiary of the Borrower, except in connection with a permitted disposal of a Collateral Vessel in accordance with the Loan Documents;

 

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(n) it is or becomes unlawful for an Obligor to perform any of its material obligations under the Loan Documents or any Related Contract as a result of the act or inaction of an Obligor; or any material provision of a Loan Document is not effective or is alleged by the Borrower to be ineffective for any reason; or any material provision of a Loan Document is not effective or is alleged by any Party (other than a Finance Party, the Borrower or the Account Bank) to be ineffective for any reason; or an Obligor repudiates any material provision of a Loan Document or evidences an intention to repudiate any material provision of a Loan Document; or any Party (other than a Finance Party or the Account Bank) repudiates or rescinds any material provision of a Loan Document or evidences an intention to repudiate or rescind any material provision of a Loan Document;

(o) any of the Security Documents ceases to be valid in any material respect or any of those Security Documents creating a Security Interest in favor of the Security Trustee ceases to provide a perfected first priority security interest in favor of the Security Trustee as a result of the act or inaction of an Obligor, provided that no Event of Default shall occur under this provision (i) if (A) the applicable Security Documents relate to certain Collateral Vessels only and the Asset Values of such Collateral Vessels account for no more than seven point five per cent. (7.5%) of the aggregate Asset Values of all Collateral Vessels, and (B) the Borrower remedies such circumstances within 10 days (and during such period the Borrower is diligently taking action to remedy such circumstances), or (ii) if, on the date any Security Document to which a Collateral Vessel or the applicable Vessel Owner is subject ceases to be valid in any material respect or any Security Document creating a Security Interest in such Collateral Vessel or the applicable Vessel Owner in favor of the Security Trustee ceases to provide a perfected first priority security interest in favor of the Security Trustee in such Collateral Vessel or the applicable Vessel Owner, such Collateral Vessel is subject to a Vessel Disposition or otherwise ceases to be a Collateral Vessel under and in accordance with the provisions of Sections 6.05 or 6.06;

(p) [Reserved];

(q) the registration of any Collateral Vessel at the registry of any Approved Flag State is cancelled or any Collateral Vessel is arrested or otherwise detained and such Collateral Vessel is not released within thirty (30) days, provided that no Event of Default shall occur under this provision (i) if (A) the applicable circumstances relate to certain Collateral Vessels only and the Asset Values of such Collateral Vessels account for no more than ten per cent. (10%) of the aggregate Asset Values of all Collateral Vessels, and (B) the Borrower remedies such circumstances within 10 days (and during such period the Borrower is diligently taking action to remedy such circumstances), which period shall, in the case of any arrest or detention be in addition to the thirty (30) day period above, or (ii) if, on the date of the applicable cancellation in the case of any cancellation of the registration of any Collateral Vessel at the registry of any Approved Flag State or prior to the expiry of the thirty (30) day in the case of arrest or detention of a Collateral Vessel, such Collateral Vessel is subject to a Vessel Disposition or otherwise ceases to be a Collateral Vessel under and in accordance with the provisions of Sections 6.05 or 6.06;

(r) any Obligor, or anyone acting through an Obligor, makes any withdrawal from, or instructs an Account Bank to make any payment from, any Charged Account, other than in accordance with article IV of the Intercreditor Agreement;

(s) any other event or circumstance occurs which gives rise to a Material Adverse Effect;

 

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then, and in every such event (other than an event with respect to the Borrower described in clause (g) or (h) of this Section), and at any time thereafter during the continuance of such event, the Administrative Agent may (but without any obligation to do so), and at the request of the Required Lenders shall, by notice to the Borrower, take any or all of the following actions, at the same or different times:

(i) terminate the Commitments, and thereupon the Commitments shall terminate immediately;

(ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other Obligations of the Borrower accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower;

(iii) [reserved]; and

(iv) exercise on behalf of itself, the Lenders all rights and remedies available to it, the Lenders under the Loan Documents and/or in respect of the Security Assets;

provided that, in case of any event with respect to the Borrower described in clause (g) or (h) of this Section, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other Obligations accrued hereunder, shall automatically become due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

ARTICLE VIII

AGENCY

SECTION 8.01 Appointment and Authority. Each of the Lenders hereby irrevocably appoints the Administrative Agent to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The Administrative Agent shall, unless a contrary indication appears in a Loan Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Administrative Agent in accordance with any instructions given to it by (a) all Lenders or the relevant proportion of the Lenders if the relevant Loan Document stipulates the matter is, as applicable, an all Lender decision or a decision requiring some specified proportion of the Lenders and (b) in all other cases, the Required Lenders. Except as otherwise provided in Section 8.06(b), the provisions of this Article are solely for the benefit of the Administrative Agent and the Lenders, and the Borrower shall not have rights as a third-party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan Document (or any other similar term) with reference to the Administrative Agent 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.

SECTION 8.02 Rights as a Lender. The Person serving as the Administrative Agent hereunder shall, if applicable, have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and the term

 

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“Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity, if applicable. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for, and generally engage in any kind of business with, the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

SECTION 8.03 Exculpatory Provisions.

(a) The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent:

(i) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(ii) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or Applicable Law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and

(iii) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

(b) The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 8.01 and 9.02), or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent in writing by the Borrower or a Lender.

(c) The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

 

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(d) If a payment is made by the Administrative Agent (or its Affiliates) in error or if a Lender or another recipient of funds is not otherwise entitled to receive such funds, then such Lender or recipient shall promptly following demand, but in any event not later than two Business Days following such demand, repay to the Administrative Agent the portion of such payment that was made in error (or otherwise not intended to be received) in same day funds, together with interest thereon in respect of each day from and including the date such amount was made available by the Administrative Agent (or its Affiliate) to such Lender or recipient to the date such amount is repaid to the Administrative Agent in same day funds at the applicable overnight rate from time to time in effect. Each Lender and other party hereto waives the discharge for value defense in respect of any such payment.

SECTION 8.04 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan that by its terms must be fulfilled to the satisfaction of a Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender unless the Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Loan. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

SECTION 8.05 Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

SECTION 8.06 Resignation of Administrative Agent.

(a) The Administrative Agent may at any time give notice of its resignation to the Lenders and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in New York, New York, or an Affiliate of any such bank with an office in New York, New York. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall not be obligated to), on behalf of the Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that in no event shall any such successor Administrative Agent be a Defaulting Lender. Whether or not a successor Administrative Agent has been appointed, such resignation of such retiring Administrative Agent shall become effective in accordance with such notice on the Resignation Effective Date.

 

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(b) With effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (i) the retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents and (ii) except for any indemnity payments owed to the retiring or removed Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender directly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring or removed Administrative Agent (other than any rights to indemnity payments owed to the retiring or removed Administrative Agent), and the retiring or removed Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring or removed Administrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Article and Section 9.03 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Administrative Agent was acting as Administrative Agent.

SECTION 8.07 Non-Reliance on Other Lenders. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Agent or Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

SECTION 8.08 No Other Duties. Anything herein to the contrary notwithstanding, the Structuring Agent, the Global Coordinator, the Mandated Lead Arrangers and the Co-Sustainability Coordinators, each listed on the cover page hereof, shall not have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent or a Lender hereunder.

SECTION 8.09 Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to the Borrower, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Section 9.03) allowed in such judicial proceeding; and

 

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(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Section 9.03.

SECTION 8.10 Intercreditor AgreementEach of the Lenders and each Hedge Counterparty hereby instructs the Administrative Agent to enter into the Intercreditor Agreement and agrees, for the enforceable benefit of all holders of all existing and future Secured Obligations and each existing and future Secured Lien Representative, to each of the matters set out in paragraphs (1) to (3) of the definition of Lien Sharing and Priority Confirmation in the Intercreditor Agreement.

ARTICLE IX

MISCELLANEOUS

SECTION 9.01 Notices; Public Information.

(a) Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile or email as follows:

(i) if to the Borrower, to it at Unit 2, 16/F., W668 Building, Nos. 668 Castle Peak Road, Cheung Sha Wan, Kowloon, Hong Kong, China, Attention of Chief Financial Officer (Facsimile No. +852 3010 1868; Telephone No. +852 3588 9400; Email: gtalbot@atlascorporation.com and legal@seaspanltd.ca);

(ii) if to the Guarantor, to it at Unit 2, 16/F., W668 Building, Nos. 668 Castle Peak Road, Cheung Sha Wan, Kowloon, Hong Kong, China, Attention of Chief Financial Officer (Facsimile No. +852 3010 1868; Telephone No. +852 3588 9400; Email: gtalbot@atlascorporation.com and legal@seaspanltd.ca);

(iii) if to the Administrative Agent, to Citibank, N.A. at Citibank Delaware, 1615 Brett Road, OPS III, New Castle, DE 19720, USA, Attention of Agency Operations (Facsimile No. +1 (646) 274-5080; Telephone No. +1 (302) 894-6010; Email: GlAgentOfficeOps@Citi.com);

(iv) [reserved]; and

(v) if to a Lender, to it at its address (or facsimile number or email address) set forth in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications, to the extent provided in paragraph (b) below, shall be effective as provided in said paragraph (b).

 

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(b) Electronic Communications. Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communication (including e-mail, FpML, and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its e-mail address as described in the foregoing clause (i), of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.

(c) Change of Address, etc. Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto.

(d) Platform.

(i) The Borrower agrees that the Administrative Agent may, but shall not be obligated to, make the Communications (as defined below) available to the Lenders by posting the Communications on the Platform.

(ii) The Platform is provided “as is” and “as available.” The Agent Parties (as defined below) do not warrant the adequacy of the Platform and expressly disclaim liability for errors or omissions in the Communications. No warranty of any kind, express, implied or statutory, including any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Communications or the Platform. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Borrower, any Lender or any other Person or entity for damages of any kind, including direct or indirect, special, incidental or consequential damages, losses or expenses (whether in tort, contract or otherwise) arising out of the Borrower’s or the Administrative Agent’s transmission of communications through the Platform. “Communications” means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of the Borrower pursuant to any Loan Document or the transactions contemplated therein that is distributed to the Administrative Agent or any Lender by means of electronic communications pursuant to this Section, including through the Platform.

(e) [Reserved]

 

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SECTION 9.02 Waivers; Amendments.

(a) No Waiver; Remedies Cumulative; Enforcement. No failure or delay by the Administrative Agent or any Lender in exercising any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege, or any abandonment or discontinuance of steps to enforce such a right remedy, power or privilege, preclude any other or further exercise thereof or the exercise of any other right remedy, power or privilege. The rights, remedies, powers and privileges of the Administrative Agent and the Lenders hereunder and under the Loan Documents are cumulative and are not exclusive of any rights, remedies, powers or privileges that any such Person would otherwise have.

Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Obligors (and to direct instruct the Security Trustee in accordance with the Intercreditor Agreement) shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 8.01 for the benefit of all the Lenders; provided that the foregoing shall not prohibit (i) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (ii) [reserved], (iii) any Lender from exercising setoff rights in accordance with Section 9.08 (subject to the terms of Section 2.12) or (iv) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to the Borrower under any Debtor Relief Law; provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (x) the Required Lenders shall have the rights otherwise provided to the Administrative Agent pursuant to Section 8.01 and (y) in addition to the matters set forth in clauses (ii), (iii) and (iv) of the preceding proviso and subject to Section 2.12, any Lender may, with the consent of the Required Lenders, enforce any rights or remedies available to it and as authorized by the Required Lenders.

(b) Amendments, Etc. Except as otherwise expressly set forth in this Agreement, no amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower therefrom, shall be effective unless in writing executed by the Guarantor, the Borrower and the Required Lenders, and acknowledged by the Administrative Agent, or by the Guarantor, the Borrower and the Administrative Agent with the consent of the Required Lenders, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided that no such amendment, waiver or consent shall:

(i) extend or increase any Commitment of any Lender without the written consent of such Lender (it being understood that a waiver of any condition precedent set forth in Article IV or the waiver of any Default shall not constitute an extension or increase of any Commitment of any Lender);

(ii) reduce the principal of, or rate of interest specified herein on, any Loan, or any fees or other amounts payable hereunder or under any other Loan Document, without the written consent of each Lender directly and adversely affected thereby (provided that only the consent of the Required Lenders shall be necessary (x) to amend the definition of “Default Rate” or to waive the obligation of the Borrower to pay interest at the Default Rate or (y) to amend any financial covenant (or any defined term directly or indirectly used therein), in each case even if the effect of such amendment would be to reduce the rate of interest on any Loan or other Obligation or to reduce any fee payable hereunder);

 

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(iii) postpone any date scheduled for any payment of principal of, or interest on, any Loan, or any fees or other amounts payable hereunder or under any other Loan Document, or reduce the amount of, waive or excuse any such payment, without the written consent of each Lender directly and adversely affected thereby;

(iv) change Section 2.12 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender directly and adversely affected thereby;

(v) waive any condition set forth in Article IV without the written consent of, in the case of any condition set forth in Section 4.01, Section 4.02(h) and Section 4.04(e), each Lender and, in the case of any other condition set forth in Article IV, the consent of the Required Lenders but as if the reference in the definition of Required Lenders to “50%” referred to “662/3%”;

(vi) [reserved];

(vii) waive or amend any provision of Sections 1.05, 3.22, 6.12 or 6.13 and any related sanctions definitions therein without the consent of each Lender; or

(viii) change any provision of this Section or the percentage in the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender;

provided, further, that no such amendment, waiver or consent shall amend, modify or otherwise affect the rights or duties hereunder or under any other Loan Document of (A) the Administrative Agent, unless in writing executed by the Administrative Agent, (B) [reserved], and (C) any Hedge Counterparty, unless in writing executed by such Hedge Counterparty, in each case in addition to the Borrower and the Lenders required above, provided that the consent of any Hedge Counterparty shall only be required in these circumstances if the applicable Hedge Counterparty or an Affiliate of that Hedge Counterparty is a Lender and if the applicable amendment, waiver or consent has the effect of (1) changing the position or priority of any Hedge Counterparty in the application of payments as set out in Section 4.02 of the Intercreditor; (2) changing the entitlement of any Hedge Counterparty to share in the Collateral and/or its interest therein; or (3) imposing an obligation on any Hedge Counterparty.

Notwithstanding anything herein to the contrary, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent that by its terms requires the consent of all the Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders, except that (x) the Commitment of any Defaulting Lender may not be increased or extended, or the maturity of any of its Loan may not be extended, the rate of interest on any of its Loans may not be reduced and the principal amount of any of its Loans may not be forgiven, in each case without the consent of such Defaulting Lender and (y) any amendment, waiver or consent requiring the consent of all the Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than the other affected Lenders shall require the consent of such Defaulting Lender.

In addition, notwithstanding anything in this Section to the contrary, if the Administrative Agent and the Borrower shall have jointly identified an obvious error or any error or omission of a technical nature, in each case, in any provision of the Loan Documents, then the Administrative Agent and the Borrower shall be permitted to amend such provision, and, in each case, such amendment shall become effective without any further action or consent of any other party to any Loan Document if the same is not objected to in writing by the Required Lenders to the Administrative Agent within ten Business Days following receipt of notice thereof.

 

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SECTION 9.03 Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Lenders, the Administrative Agent and their Affiliates (including the reasonable and documented fees, charges and disbursements of counsel for the Administrative Agent, where applicable, in accordance with previously agreed fee arrangements) in connection with the syndication of the Facilities, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents, or any amendments, modifications or waivers of the provisions hereof or thereof, including in connection with the implementation of a Benchmark Replacement and/or any Benchmark Replacement Conforming Changes pursuant to Section 2.16 (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) [reserved], and (iii) all out-of-pocket expenses incurred by the Administrative Agent or any Lender (including the documented fees, charges and disbursements of one counsel for the Administrative Agent and one additional counsel in any applicable local jurisdiction, one counsel for the Lenders as a whole (and one additional counsel in the event of an actual conflict of interest) and, in each case, such other counsel as may be agreed with the Borrower) in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans.

(b) Indemnification by the Borrower. The Borrower shall indemnify the Administrative Parties (and any sub-agent thereof), the Account Bank, each Lender, each Hedge Counterparty and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee) incurred by any Indemnitee or asserted against any Indemnitee by any Person (including the Borrower) arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, (iv) any costs associated with any Default hereunder or the enforcement of the Security Documents or acceleration of the Loans, or (v) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.

(c) Reimbursement by Lenders. To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under paragraph (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof) or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent) or such Related Party, as the case may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought based on each Lender’s Applicable Percentage at such time) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by

 

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such Lender); provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent) in connection with such capacity.

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by Applicable Law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof. No Indemnitee referred to in paragraph (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

(e) Payments. All amounts due under this Section shall be payable not later than 10 days after demand therefor.

(f) Survival. Each party’s obligations under this Section shall survive the termination of the Loan Documents and payment of the obligations hereunder.

SECTION 9.04 Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither the Borrower nor the Guarantor may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender, and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of paragraph (b) of this Section, (ii) by way of participation in accordance with the provisions of paragraph (d) of this Section, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of paragraph (e) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in paragraph (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign or transfer to any bank, financial institution, insurance company or a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in financing loans (an “Eligible Assignee”) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that the Administrative Agent shall have no duty or obligation at any time to determine if an entity constitutes an Eligible Assignee, and provided further that any such assignment shall be subject to the following conditions:

(i) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment assigned.

 

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(ii) Required Consents. The consent of the Borrower (such consent not to be unreasonably withheld or delayed, and shall be deemed given if the Borrower has not rejected the proposed assignment within 10 Business Days of the Borrower’s receipt of written request for consent) shall be required unless the assignee is a Lender or an Affiliate of a Lender (so long as such Affiliate is engaged in making commercial loans or similar extensions of credit in the ordinary course of its business), or any Event of Default has occurred and is continuing at the time of assignment.

(iii) Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $5,000; provided that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

(iv) No Assignment to Certain Persons. No such assignment shall be made to (A) the Borrower or any of the Borrower’s Affiliates or Subsidiaries or (B) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute a Defaulting Lender or a Subsidiary thereof.

(v) Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent and each Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata share of all Loans in accordance with its Applicable Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under Applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 2.14 and 9.03 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this Section.

 

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(c) Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices in New York, New York a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(d) Participations. Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural Person, or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural Person, or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the Borrower, the Administrative Agent and Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement, and (iv) such Lender retains the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement, provided that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in Section 9.02(b) which requires the consent of all Lenders. For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 9.03(b) with respect to any payments made by such Lender to its Participant(s).

The Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.13, 2.14 and 2.15 (subject to the requirements and limitations therein) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Section 2.18 as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under Section 2.14 or 2.15, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 2.18(b) with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender; provided that such Participant agrees to be subject to Section 2.12 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary 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 Loans or other obligations under the Loan Documents (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, letters of credit or its other obligations under any Loan Document) 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

 

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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 Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(e) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

SECTION 9.05 Survival. All covenants, agreements, representations and warranties made by the Borrower herein and in any Loan Document or other documents delivered in connection herewith or therewith or pursuant hereto or thereto shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery hereof and thereof and the making of the Credit Extensions hereunder, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid and so long as the Commitments have not expired or been terminated. The provisions of Sections 2.13, 2.14, 9.03, 9.15 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the payment in full of the Obligations, the expiration or termination of the Commitments or the termination of this Agreement or any provision hereof.

SECTION 9.06 Counterparts; Integration; Effectiveness; Electronic Execution.

(a) Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents, and any separate letter agreements with respect to fees payable to the Administrative Agent, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (e.g., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement.

(b) Electronic Execution of Assignments. The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any Applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

SECTION 9.07 Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal,

 

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invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this Section, if and to the extent that the enforceability of any provision of this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent then such provision shall be deemed to be in effect only to the extent not so limited.

SECTION 9.08 Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by Applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held, and other obligations (in whatever currency) at any time owing, by such Lender or any such Affiliate, to or for the credit or the account of the Borrower against any and all of the obligations of the Borrower now or hereafter existing under this Agreement or any other Loan Document to such Lender or its Affiliates, irrespective of whether or not such Lender or Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrower may be contingent or unmatured or are owed to a branch office or Affiliate of such Lender different from the branch office or Affiliate holding such deposit or obligated on such indebtedness.

SECTION 9.09 Governing Law; Jurisdiction; Etc.

(a) Governing Law. This Agreement and the other Loan Documents and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement or any other Loan Document (except, as to any other Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the law of the State of New York.

(b) Jurisdiction. The Borrower irrevocably and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against the Administrative Agent, any Lender or any Related Party of the foregoing in any way relating to this Agreement or any other Loan Document or the transactions relating hereto or thereto, in any forum other than the courts of the State of New York sitting in New York County, and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such action, litigation or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by Applicable Law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or in any other Loan Document shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or its properties in the courts of any jurisdiction.

(c) Waiver of Venue. The Borrower irrevocably and unconditionally waives, to the fullest extent permitted by Applicable Law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by Applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

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(d) Service of Process. Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by Applicable Law.

SECTION 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 9.11 Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

SECTION 9.12 Treatment of Certain Information; Confidentiality. Each of the Parties or any person who becomes a Party, whether or not any such Party or person ceases to be a Party, shall not (i) without the express prior written consent of the other Parties, issue any press release in relation to the transactions evidenced by this Agreement and the other Loan Documents, or (ii) disclose to any other person (other than another Party to a Loan Document) the Loan Documents or any Confidential Information (as defined below), except that Confidential Information may be disclosed (a) to its Affiliates and to its Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential); (b) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners); (c) to the extent required by Applicable Laws or by any subpoena or similar legal process; (d) to any other party hereto; (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any Security Document or any action or proceeding relating to this Agreement or any other Loan Document or any Security Document or the enforcement of rights hereunder or thereunder; (f) to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights and obligations under this Agreement, or (ii) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Borrower and its obligations, this Agreement or payments hereunder, in each case provided such recipient(s) have signed a confidentiality agreement consistent with this Section 9.12; (g) on a confidential basis to (i) any rating agency in connection with rating the Borrower or its Subsidiaries or this Agreement or the Facilities or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to the Facilities; (h) to any central bank or Federal Reserve Bank to whom or for whose benefit a Lender charges, assigns or otherwise creates Security Interest (or may do so) pursuant to Section 9.04(e); (i) with the consent of the Party who has provided such Confidential Information; (j) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section, or (y) becomes available to the Administrative Agent, any Lender or any of their respective Affiliates on a non-confidential basis from a source other than the Borrower who did not acquire such information as a result of a breach of this Section, or (k) to its auditors, legal, insurance or other

 

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professional advisors or insurers or underwriters of any member of the group of companies of which such party is a member. In addition, the Administrative Agent and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry and service providers to the Agents or any Lender in connection with the administration of this Agreement, the other Loan Documents, and the Commitments.

For purposes of this Section, “Confidential Information” means this Agreement and the other Loan Documents and the transactions contemplated hereby and all information received from any other Party to this Agreement or any of its Subsidiaries or any of their respective businesses, relating to such Party’s business, financial or other covenants, other than any such information that is available to the receiving Party on a nonconfidential basis prior to disclosure by the disclosing Party; provided that, in the case of such information received after the Closing Date, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Confidential Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

SECTION 9.13 PATRIOT Act. The Administrative Agent and each Lender subject to the PATRIOT Act hereby notifies the Borrower that, pursuant to the requirements of the PATRIOT Act, it may be required to obtain, verify, record and update certain information relating to individuals and entities which maintain a business relationship with the Administrative Agent and such Lender, , which information includes the name and address of the Borrower and Obligors and other information that will allow the Administrative Agent and such Lender to identify the Borrower and Obligors in accordance with the PATRIOT Act. Accordingly, each Party agrees to provide to the Administrative Agent and each such Lender upon their request from time to time such identifying information and documentation as may be available in order to enable the Administrative Agent and each such Lender to comply with the requirements of the PATRIOT Act.

SECTION 9.14 Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts that are treated as interest on such Loan under Applicable Law (collectively, “charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) that may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with Applicable Law, the rate of interest payable in respect of such Loan hereunder, together with all charges payable in respect thereof, shall be limited to the Maximum Rate. To the extent lawful, the interest and charges that would have been paid in respect of such Loan but were not paid as a result of the operation of this Section shall be cumulated and the interest and charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the amount collectible at the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate for each day to the date of repayment, shall have been received by such Lender. Any amount collected by such Lender that exceeds the maximum amount collectible at the Maximum Rate shall be applied to the reduction of the principal balance of such Loan or refunded to the Borrower so that at no time shall the interest and charges paid or payable in respect of such Loan exceed the maximum amount collectible at the Maximum Rate.

SECTION 9.15 Payments Set Aside. To the extent that any payment by or on behalf of the Borrower is made to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to

 

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be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Effective Rate from time to time in effect.

SECTION 9.16 No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (a) (i) no fiduciary, advisory or agency relationship between the Borrower and its Subsidiaries and the Administrative Agent or any Lender is intended to be or has been created in respect of the transactions contemplated hereby or by the other Loan Documents, irrespective of whether the Administrative Agent or any Lender has advised or is advising the Borrower or any Subsidiary on other matters, (ii) the arranging and other services regarding this Agreement provided by the Administrative Agent and the Lenders are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Administrative Agent and the Lenders, on the other hand, (iii) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent that it has deemed appropriate and (iv) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; and (b) (i) the Administrative Agent and the Lenders each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person; (ii) none of the Administrative Agent and the Lenders has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent and the Lenders and their respective Affiliates may be engaged, for their own accounts or the accounts of customers, in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and none of the Administrative Agent and the Lenders has any obligation to disclose any of such interests to the Borrower or its Affiliates. To the fullest extent permitted by Law, the Borrower hereby waives and releases any claims that it may have against any of the Administrative Agent and the Lenders with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

SECTION 9.17 Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of the appliable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder that may be payable to it by any party hereto that is an Affected Financial Institution; and

(b) the effects of any Bail-in Action on any such liability, including, if applicable:

(i) a reduction in full or in part or cancellation of any such liability;

 

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(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of the applicable Resolution Authority.

SECTION 9.18 QFC Provisions(i) . The following provisions apply to the extent that the Loan Documents provide support, through a guarantee or otherwise, for Hedging Agreements or any other agreement or instrument that is a QFC (such support, “QFC Credit Support” and each such QFC, a “Supported QFC”):

(b) The parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):

(i) In the event a Covered Entity that is party to a Supported QFC or to any QFC Credit Support (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States.

(ii) In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support

(c) In addition, the parties agree that:

(i) Notwithstanding anything to the contrary in the Loan Documents or any other agreement, but without prejudice to the requirements of Section 9.18(a), (1) Default Rights under the Loan Documents that might otherwise apply to a Supported QFC or any QFC Credit Support may not be exercised against a Covered Party if such Default Rights are related, directly or indirectly, to a BHC Act Affiliate of such Covered Party becoming subject to Insolvency Proceedings, except to the extent such exercise would be permitted under 12 C.F.R. § 252.84, 12 C.F.R. § 47.5, or 12 C.F.R. § 382.4, as applicable; and (2) nothing in the Loan Documents or any other agreement shall prohibit the transfer of any Covered Affiliate QFC Credit Support, any

 

108


interest or obligation in or under, or any property securing, such Covered Affiliate QFC Credit Support to a Transferee upon or following a BHC Act Affiliate of the Covered Party becoming subject to Insolvency Proceedings, unless the transfer would result in the party supported thereby being the beneficiary of such Covered Affiliate QFC Credit Support in violation of any law applicable to such party.

(ii) After a BHC Act Affiliate of a Covered Party has become subject to Insolvency Proceedings, if any party to the Loan Documents, any Supported QFC or any QFC Credit Support seeks to exercise any Default Right against such Covered Party with respect to such Supported QFC or such QFC Credit Support, the party seeking to exercise such Default Right shall have the burden of proof, by clear and convincing evidence, that the exercise of such Default Right is permitted hereunder.

(d) As used in this Section 9.18, the following terms have the following meanings;

(i) “BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

(ii) “Covered Entity” means any of the following:

(A) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

(B) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

(C) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

(iii) “Covered Affiliate QFC Credit Support” means, in respect of a Supported QFC to which a Covered Party is the direct party, QFC Credit Support provided by a Covered Party that is a BHC Act Affiliate of such direct party.

(iv) “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

(v) “Insolvency Proceeding” means a receivership, insolvency, liquidation, resolution, or similar proceeding.

(vi) “QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

(vii) “Transferee” means, in respect of any Covered Affiliate QFC Credit Support, a person to whom such Covered Affiliate QFC Credit Support is transferred upon the provider of such Covered Affiliate QFC Credit Support becoming subject to Insolvency Proceedings or thereafter as part of its resolution, restructuring, or reorganization.

 

109


SECTION 9.19 Amendment and Restatement.

(a) This Agreement shall be deemed to be an amendment to and restatement of the Initial Credit Agreement, and the Initial Credit Agreement as amended and restated hereby shall remain in full force and effect and is hereby ratified and confirmed in all respects. This Agreement is not intended to constitute, nor does it constitute, an interruption, suspension of continuity, satisfaction, discharge of prior duties, novation, or termination of the Initial Credit Agreement or the liens, security interests, loans, guarantees, liabilities, expenses, or obligations under the Initial Credit Agreement, or the collateral thereunder. Each of the Obligors affirms its duties and obligations under the terms of the Initial Credit Agreement (as amended and restated by this Agreement). This Agreement amends and restates the Initial Credit Agreement in its entirety and any obligation thereunder shall be deemed to be outstanding under this Agreement. If there is a conflict between the Initial Credit Agreement and this Agreement, this Agreement shall govern from and after the Restatement Date. Upon the Restatement Date, each reference to the Initial Credit Agreement in any other Secured Debt Document or in any other document, instrument or agreement shall mean and be a reference to the Initial Credit Agreement as amended and restated by this Agreement.

(b) Each Obligor hereby expressly acknowledges and agrees that as at the Restatement Date the Term Loan Required Payments (reflecting drawn Term Loan Commitments) which are outstanding are set out in the Repayment Schedule prepared as of the Restatement Date set forth in Schedule 2.03.

(c) Each Obligor hereby (i) expressly acknowledges the terms of this Agreement, (ii) ratifies and affirms its obligations under the Loan Documents (including guarantees and security agreements) executed by such Obligor and (iii) acknowledges, renews and extends its continued liability under all such Loan Documents and agrees such Loan Documents remain in full force and effect, including with respect to the obligations of the Borrower as modified by this Agreement. Each Obligor further represents and warrants to each Secured Party that after giving effect to this Agreement, neither the modification of the Initial Credit Agreement effected pursuant to this Agreement, nor the execution, delivery, performance or effectiveness of this Agreement (A) impairs the validity, effectiveness or priority of the Liens granted pursuant to any Secured Debt Document (as such term is defined in the Initial Credit Agreement), and such Liens continue unimpaired with the same priority to secure repayment of all Obligations, whether heretofore or hereafter incurred; or (B) requires that any new filings be made or other action taken to perfect or to maintain the perfection of such Liens.

(d) Each Obligor hereby agrees, acknowledges and affirms that (i) each of the Loan Documents to which it is a party shall remain in full force and effect and shall constitute security for all Obligations pursuant to the Initial Credit Agreement as amended and restated hereby, and (ii) any reference to the Initial Credit Agreement appearing in any other Secured Debt Document shall on and after the Restatement Date be deemed to refer to the Initial Credit Agreement as amended and restated hereby. In furtherance of the foregoing, each Obligor hereby confirms the security interest in the Collateral granted by it in favor of the Security Trustee pursuant to each Collateral Document to which it is a party.

 

110


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

BORROWER
        SEASPAN HOLDCO III LTD.
            By:   /s/ Bing Chen
            Name:   Bing Chen
            Title:   President


PRIMARY GUARANTOR
        SEASPAN CORPORATION
        By:   /s/ Graham Talbot
        Name:   Graham Talbot
        Title:   Chief Financial Officer


ADMINISTRATIVE AGENT

        CITIBANK, N.A.,

        as Administrative Agent

        By:   /s/ Marion O’Connor
        Name:   Marion O’Connor
        Title:   Senior Trust Officer


STRUCTURING AGENT

        CITIBANK, N.A.,

        as Structuring Agent

        By:   /s/ Matthew J. Simonetti
        Name:   Matthew J. Simonetti
        Title:   Managing Director


LENDERS

SOCIÉTÉ GÉNÉRALE, HONG KONG BRANCH, a public limited company incorporated in France, acting through its Hong Kong Branch,

as Lender, Mandated Lead Arranger and Lead Sustainability Coordinator

        By:   /s/ Gwenael Delattre
        Name:   Gwenael Delattre
        Title:   Director, Head of Shipping & Offshore Finance Asia Pacific
        By:   /s/ Ting Zhang
        Name:   Ting Zhang
        Title:   Director, Shipping & Offshore Finance


CITIBANK, N.A.,
as Global Coordinator and Co-Sustainability Coordinator
By:   /s/ Matthew J. Simonetti
Name:   Matthew J. Simonetti
Title:   Managing Director


BNP PARIBAS,
as Lender and Mandated Lead Arranger
By:   /s/ Chong Chiu Ming, Logan
Name:   Chong Chiu Ming, Logan
Title:   Managing Director of Transportation Sector Investment Banking Asia Pacific
By:   /s/ Lau Kwong Wang, Joshua
Name:   Lau Kwong Wang, Joshua
Title:   Director, IBA - Integrated Sectors – Shipping HK


BANK OF MONTREAL,
as Mandated Lead Arranger and Co-Sustainability Coordinator
By:   /s/ Ben Rough
Name:   Ben Rough
Title:   Director


NATIONAL AUSTRALIA BANK LIMITED,
as Mandated Lead Arranger
By:   /s/ Daniel Carr
Name:   Daniel Carr
Title:   Head of Asset Finance & Leasing, North America


WELLS FARGO BANK, N.A.,
as Mandated Lead Arranger and Co-Sustainability Coordinator
By:   /s/ Jerri Kallam
Name:   Jerri Kallam
Title:   Director


BANK OF AMERICA, N.A.,
as Mandated Lead Arranger
By:   /s/ Daryl K. Hogge
Name:   Daryl K. Hogge
Title:   Senior Vice President


FÉDÉRATION DES CAISSES DESJARDINS DU QUÉBEC,
as Lender
By:   /s/ Jonathan Raiken
Name:   Jonathan Raiken
Title:   Managing Director
By:   /s/ Michael Parizeau
Name:   Michael Parizeau
Title:   Vice President


KFW IPEX-BANK GMBH,
as Lender
By:   /s/ Sebastian Blum
Name:   Sebastian Blum
Title:   Director
By:   /s/ André Mutter
Name:   André Mutter
Title:   Vice President


THE TORONTO-DOMINION BANK,
as Lender
By:   /s/ Andrei Rybianski
Name:   Andrei Rybianski
Title:   Director, Commercial National Accounts
By:   /s/ Kathryn Gislason
Name:   Kathryn Gislason
Title:   Manager, Commercial Credit


CRÉDIT INDUSTRIEL ET COMMERCIAL, NEW YORK BRANCH
as Lender
By:   /s/ Andrew McKuin
Name:   Andrew McKuin
Title:   Managing Director
By:   /s/ Mark Palin
Name:   Mark Palin
Title:   First Vice President


HSBC BANK CANADA,
as Lender
By:   /s/ Angie Hall
Name:   Angie Hall
Title:   Assistant Vice President, Large Corporate
By:   /s/ Carlo Chavarri
Name:   Carlo Chavarri
Title:   Assistant Vice President, Corporate Banking

Exhibit 4.4

 

 

 

FIRST AMENDED AND RESTATED

INTERCREDITOR AND PROCEEDS AGREEMENT

dated as of May 19, 2021

Among

SEASPAN HOLDCO III LTD.,

as Borrower,

SEASPAN CORPORATION,

as Primary Guarantor,

CERTAIN SUBSIDIARIES OF THE BORROWER FROM TIME TO

TIME PARTY HERETO,

THE OTHER SECURED PARTIES FROM TIME TO

TIME PARTY HERETO,

UMB BANK, NATIONAL ASSOCIATION,

as Security Trustee

and

CITIBANK, N.A.,

as Administrative Agent

 

 

 


TABLE OF CONTENTS

 

     Page  
ARTICLE I       
Definitions; Principles of Construction       

SECTION 1.01.

 

Defined Terms

     2  

SECTION 1.02.

 

Rules of Interpretation

     15  
ARTICLE II       
The Trust Estate       

SECTION 2.01.

 

Declaration of Trust

     16  

SECTION 2.02.

 

Equal and Ratable Sharing of Collateral by Holders of Secured Obligations

     17  
ARTICLE III       
Obligations and Powers of Security Trustee       

SECTION 3.01.

 

Undertaking of the Security Trustee

     18  

SECTION 3.02.

 

Release or Subordination of Liens

     19  

SECTION 3.03.

 

Enforcement of Liens

     20  

SECTION 3.04.

 

Application of Proceeds

     20  

SECTION 3.05.

 

Powers of the Security Trustee

     20  

SECTION 3.06.

 

Documents and Communications

     20  

SECTION 3.07.

 

For Sole and Exclusive Benefit of Holders of Secured Obligations

     20  

SECTION 3.08.

 

Additional Secured Debt

     20  

SECTION 3.09.

 

Release of Collateral

     22  
ARTICLE IV       
Cash Management       

SECTION 4.01.

 

Accounts

     23  

SECTION 4.02.

 

Application of Proceeds

     24  

SECTION 4.03.

 

Required Hedging

     27  
ARTICLE V       
Guarantee and Subordination       

SECTION 5.01.

 

Guarantee and Indemnity

     28  

SECTION 5.02.

 

Subordination

     31  

 

i


ARTICLE VI       
Immunities of the Security Trustee       

SECTION 6.01.

 

No Implied Duty

     33  

SECTION 6.02.

 

Appointment of Agents and Advisors

     33  

SECTION 6.03.

 

Other Agreements

     33  

SECTION 6.04.

 

Solicitation of Instructions

     33  

SECTION 6.05.

 

Limitation of Liability

     34  

SECTION 6.06.

 

Documents in Satisfactory Form

     34  

SECTION 6.07.

 

Entitled to Rely

     34  

SECTION 6.08.

 

Secured Debt Default

     34  

SECTION 6.09.

 

Actions by Security Trustee

     35  

SECTION 6.10.

 

Security or Indemnity in Favor of the Security Trustee

     35  

SECTION 6.11.

 

Rights of the Security Trustee

     35  

SECTION 6.12.

 

Limitations on Duty of Security Trustee in Respect of Collateral

     36  

SECTION 6.13.

 

Assumption of Rights, Not Assumption of Duties

     37  

SECTION 6.14.

 

No Liability for Clean-up of Hazardous Materials

     37  

SECTION 6.15.

 

No Liability for Delay in Performance

     37  

SECTION 6.16.

 

Electronic Transmission

     37  
ARTICLE VII       
Resignation and Removal of the Security Trustee or Co-Security Trustee       

SECTION 7.01.

 

Resignation or Removal of Security Trustee

     38  

SECTION 7.02.

 

Appointment of Successor Security Trustee

     38  

SECTION 7.03.

 

Succession

     39  

SECTION 7.04.

 

Merger, Conversion or Consolidation of Security Trustee

     39  
ARTICLE VIII       
Miscellaneous Provisions       

SECTION 8.01.

 

Amendment

     39  

SECTION 8.02.

 

Voting

     41  

SECTION 8.03.

 

Further Assurances; Insurance

     41  

SECTION 8.04.

 

Successors and Assigns

     42  

SECTION 8.05.

 

Delay and Waiver

     43  

SECTION 8.06.

 

Notices

     43  

SECTION 8.07.

 

Notice Following Discharge of Secured Obligations

     44  

SECTION 8.08.

 

Entire Agreement

     44  

SECTION 8.09.

 

Compensation; Expenses

     44  

SECTION 8.10.

 

Indemnity

     45  

 

ii


SECTION 8.11.

 

New Grantor Parties

     45  

SECTION 8.12.

 

Severability

     45  

SECTION 8.13.

 

Headings

     46  

SECTION 8.14.

 

Obligations Secured

     46  

SECTION 8.15.

 

Governing Law

     46  

SECTION 8.16.

 

Consent to Jurisdiction

     46  

SECTION 8.17.

 

Waiver of Jury Trial

     46  

SECTION 8.18.

 

Counterparts

     47  

SECTION 8.19.

 

Effectiveness

     47  

SECTION 8.20.

 

Continuing Nature of this Agreement

     47  

SECTION 8.21.

 

Insolvency

     47  

SECTION 8.22.

 

Rights and Immunities of Secured Lien Representatives and Security Trustee

     47  

SECTION 8.23.

 

Amendment and Restatement

     48  

EXHIBIT A—Additional Secured Debt Designation

EXHIBIT B—Form of Intercreditor Joinder-Additional Secured Debt

EXHIBIT C—Form of Intercreditor Joinder (Grantor)

 

 

iii


This First Amended and Restated Intercreditor and Proceeds Agreement (as further amended, amended and restated, modified or supplemented from time to time in accordance with Section 7.01, this “Agreement”) is dated as of 19 May 2021, and is by and among SEASPAN HOLDCO III LTD., a company incorporated in the Marshall Islands (the “Borrower”), SEASPAN CORPORATION, (as “Primary Guarantor”), the subsidiaries of the Borrower from time to time party hereto as Guarantors, UMB BANK, NATIONAL ASSOCIATION, not in its individual capacity but solely as security trustee (the “Security Trustee”) and CITIBANK, N.A. (“Citibank”), as administrative agent for the Lenders (in such capacity, together with its successors and permitted assigns, the “Administrative Agent”).

RECITALS

The Borrower has entered into (i) that certain loan agreement dated May 15, 2019 (as amended, supplemented, increased, extended, restated, renewed or otherwise modified and in effect from time to time, including as amended and restated on or about the Restatement Date, the “Loan Agreement”) among (inter alios) the Borrower, the Guarantor, the lenders party thereto and the Administrative Agent, which provides for a credit facility to be made available in the form of a term loan, revolving loans and letters of credit, (ii) that certain loan agreement dated December 30, 2019 (as amended, supplemented, increased, extended, restated, renewed or otherwise modified and in effect from time to time, including as amended and restated on or about the Restatement Date) among (inter alios) the Borrower, the Guarantor, the lenders party thereto and the Administrative Agent, which provides for a credit facility to be made available in the form of a term loan, and (iii) that certain loan agreement dated October 14, 2020 (as amended, supplemented, increased, extended, restated, renewed or otherwise modified and in effect from time to time, including as amended and restated on or about the Restatement Date) among (inter alios) the Borrower, the Guarantor, the lenders party thereto and the Administrative Agent, which provides for a credit facility to be made available in the form of a term loan (in each case for (i) to (iii) of the foregoing, as such credit facility may be increased from time to time in accordance with the terms of this Agreement and the Secured Debt Documents). For the purposes of this Agreement, the credit facilities identified in (ii) and (iii) constitute and are considered “Additional Secured Debt”.

The Borrower may from time to time desire to incur further indebtedness in the form of Additional Secured Debt.

From time to time the Guarantor may create unsecured and subordinated intercompany obligations to the Borrower subject to this Agreement , and the Borrower may create certain unsecured and subordinated intercompany obligations to certain Obligors subject to this Agreement.

Capitalized terms used in this Agreement have the meanings assigned to them above, in Article I below, or as provided for in the Loan Agreement and any Additional Debt Document (as applicable).


The Borrower intends to secure all current and future Secured Obligations on a first priority basis, with Liens on all current and future Collateral to the extent that such Liens have been provided for in the applicable Collateral Documents.

This Agreement sets forth the terms on which each Secured Party has appointed the Security Trustee to act as Security Trustee for the current and future holders of the Secured Obligations to receive, hold, maintain, administer and distribute the Collateral at any time delivered to the Security Trustee or the subject of the Collateral Documents, and to enforce the Collateral Documents and all interests, rights, powers and remedies of the Security Trustee with respect thereto or thereunder and the proceeds thereof.

It is the intent of the parties hereto that this Agreement not constitute a novation of the obligations and liabilities of the parties under the Initial Intercreditor Agreement, but that this Agreement amend and restate in its entirety the Initial Intercreditor Agreement and re-evidence the obligations and liabilities of the parties thereunder.

The parties are willing to amend and restate the Initial Intercreditor Agreement on the terms and conditions set forth in this Agreement.

AGREEMENT

In consideration of the premises and the mutual agreements herein set forth, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:

ARTICLE I

Definitions; Principles of Construction

SECTION 1.01. Defined Terms. The following terms will have the following meanings: “Act of Required Debtholders” means, as to any matter at any time a direction in writing delivered to the Security Trustee by or with the written consent of the holders of more than 50% of the sum of:

(a) the aggregate outstanding principal amount of loans and notes constituting Secured Obligations (including the face amount of outstanding letters of credit whether or not then available or drawn); and

(b) the aggregate unfunded commitments to extend credit which, when funded, would constitute Secured Obligations;

provided, however, that (x) the loans, notes and unfunded commitments of Defaulting Lenders and of the Borrower and its Affiliates and Subsidiaries shall be disregarded in determining the “Act of Required Debtholders” and (y) after (1) the termination or expiration of all commitments to extend credit that would constitute Secured Obligations (other than any Secured Obligations consisting of Hedging Obligations), (2) the payment in full in cash of the principal of and interest and premium (if any) on loans and notes constituting Secured

 

2


Obligations (other than any undrawn letters of credit), and (3) the payment in full in cash of all other Secured Obligations other than any Secured Obligations consisting of Hedging Obligations, the term “Act of Required Debtholders” will mean direction from the holders of more than 50% of the sum of the aggregate Swap Termination Values; provided that the Swap Termination Values shall be reported to the Security Trustee upon request; provided further, that any Hedging Obligation with a Swap Termination Value that is a negative number shall be disregarded for purposes of all calculations required by the term “Act of Required Debtholders”.

For purposes of determining whether the holders of the requisite principal amount of Secured Obligations, have taken any action as described above, the principal amount for purposes of voting shall be the principal in U.S. dollars, as of (i) if a record date has been set with respect to the taking of such action, such date or (ii) if no such record date has been set, the date of the taking of such action by the holders of such Indebtedness.

Additional Debt Document” means the facility agreement, indenture, credit agreement, note purchase agreement or other agreement governing the relevant Additional Secured Debt, together, if applicable, with the “finance documents” (howsoever described) thereunder.

Additional Debt Finance Parties” means the lenders, noteholders or equivalent pursuant to any Additional Debt Documents.

Additional Debt Hedging Obligations” means all Hedging Obligations arising under or pursuant to the Additional Debt Documents.

Additional Debt Representative” means, in respect of any Additional Secured Debt, the trustee, agent or representative of the holders of such Additional Secured Debt who maintains the transfer register for such Additional Secured Debt (if applicable) and (a) is appointed as a Secured Lien Representative (including for purposes related to the administration of the Collateral Documents) pursuant to the Additional Debt Documents together with its successors in such capacity and (b) has executed an Intercreditor Joinder.

Additional Debt Secured Obligations” means (a) all principal of the loans or notes, as applicable, outstanding from time to time in respect of the Additional Secured Debt, all interest on the loans or notes, all other amounts now or hereafter payable by any Grantor under any Additional Debt Document and any fees or other amounts now or hereafter payable by any Grantor to the Additional Debt Representative or the Security Trustee for acting in its capacity as such pursuant to a separate agreement among such parties, and (b) all Additional Debt Hedging Obligations, in each case, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising.

Additional Secured Debt” has the meaning set forth in Section 3.08(b).

Additional Secured Debt Designation” means a notice in substantially the form of Exhibit A.

 

3


Administrative Expenses” means in respect of the Borrower and each Vessel Owner, all costs, fees, expenses and other administration charges (i) relating to its customary corporate administration and (ii) relating to any reasonable accounting, audit, tax advisory and legal fees of such entity.

Affiliate” means, with respect to a specified Person, another Person that directly or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

Agreement” has the meaning set forth in the preamble.

Applicable Law” means, as to any Person, all applicable Laws binding upon such Person or to which such a Person is subject.

Business Day” means any day other than a Saturday, a Sunday or a day on which banking institutions in the City of New York, or at a place of payment are authorized by law, regulation or executive order to remain closed.

Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings analogous thereto.

Collateral” means all of the properties and assets that are (or are purported to be) from time to time subject to the Liens granted to the Security Trustee pursuant to the Collateral Documents as security for the Secured Obligations.

Collateral Account” means the account of the Borrower maintained with Bank of Montreal with account number 0004-4624-922.

Collateral Documents” means this Agreement, each Lien Sharing and Priority Confirmation, and all security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, deeds of hypothecation, collateral agency agreements, debentures, control agreements or other grants or transfers for security executed and delivered by any Grantor creating (or purporting to create) a Lien upon Collateral in favor of the Security Trustee, for the benefit of the Secured Parties in respect of the Secured Obligations, in each case, as amended, amended and restated, modified, renewed, restated or replaced, in whole or in part, from time to time, in accordance with its terms and Section 8.01. For greater certainty, the Loan Agreement is not a Collateral Document.

Collection Period” means, with respect to a Payment Date, the period commencing on the first calendar day of the calendar month in which the immediately preceding Payment Date occurs (or, in the case of the initial Payment Date, commencing on the Closing Date) and ending on (and including) the Determination Date related to such Payment Date. For the avoidance of doubt, except for the first Collection Period, each Collection Period will be one of the following periods: (i) first day of March to last day of May, (ii) first day of June to last day of August, (iii) first day of September to last day of November, or (iv) first day of December to last day of February.

 

4


Determination Date” means the last Business Day in New York City in the calendar month immediately preceding a Payment Date, being either the last Business Day of February, May, August or November.

Discharge of Secured Obligations” means the occurrence of all of the following:

(1) termination or expiration of all commitments to extend credit that would constitute Secured Obligations;

(2) either (i) the termination of any undrawn letters of creditor or (ii) the Cash Collateralization in accordance with the Loan Agreement of any undrawn letters of credit; and

(3) unconditional and irrevocable payment in full in cash of the principal of and interest and premium (if any) on all Secured Obligations together with all other amounts then due and payable by any Obligor to the Secured Parties under the Secured Debt Documents.

Earnings” means, in respect of a Collateral Vessel, all present and future moneys and claims which are earned by or become payable to or for the account of the Borrower or Vessel Owner in connection with the operation or ownership of that Collateral Vessel and including but not limited to: (a) freights, passage and hire moneys (howsoever earned); (b) remuneration for salvage and towage services; (c) demurrage and detention moneys; (d) all moneys and claims in respect of the requisition for hire of that Collateral Vessel; (e) payments received in respect of any off-hire insurance; (f) payments received pursuant to any Charter Guarantee relating to that Collateral Vessel; and (g) Charter Termination Fees or other payments in respect of the termination of any Charter, including without limitation, pursuant to legal proceedings, arbitration or other settlement arrangements.

Environmental Approvals” means any permit, license, approval, ruling, variance, exemption or other authorization required under applicable Environmental Laws.

Environmental Claim means any claim by any Person or Persons or any governmental, judicial or regulatory authority which arises out of any breach, contravention or violation of Environmental Law or of the existence of any liability or potential liability arising from such breach, contravention or violation or the presence of Hazardous Material in contravention of Environmental Laws. In this context, claim means: a claim for damages, compensation, fines, penalties or any other payment of any kind whether or not similar to the foregoing; an order or direction to take, or not to take) certain action or to desist from or suspend certain action by any governmental, judicial or regulatory authority; and any form of enforcement or regulatory action.

 

5


Environmental Laws” means any or all applicable law relating to or concerning:

(a) pollution or contamination of the environment, any ecological system or any living organisms which inhabit the environment or any ecological system;

(b) the generation, manufacture, processing, distribution, use (including abuse), treatment, storage, disposal, transport or handling of Hazardous Materials; and

(c) the emission, leak, release, spill or discharge into the environment of noise, vibration, dust, fumes, gas, odors, smoke, steam, effluvia, heat, light, radiation (of any kind), infection, electricity or any Hazardous Material and any matter or thing capable of constituting a nuisance or an actionable tort or breach of statutory duty of any kind in respect of such matters,

including, without limitation, the following laws of the United States of America: the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, the Hazardous Materials Transportation Act, as amended, the Oil Pollution Act of 1990, as amended, the Resource Conservation and Recovery Act, as amended, and the Toxic Substances Control Act, as amended, together, in each case, with the regulations promulgated and the guidance issued pursuant thereto.

First Revolving Facility” means the “Revolving Facility” as defined in the Loan Agreement.

Governmental Authority” means any nation or government, any state, province or other political subdivision thereof and any agency, department, 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.

Grantor” means the Borrower, the Guarantors and any other Person that pledges any Collateral under the Collateral Documents to secure any Secured Obligation.

Guarantee” means the guarantee granted pursuant to Section 5.01.

Guarantor” means each of the Primary Guarantor and each Vessel Owner.

Hazardous Material” means any element or substance, whether natural or artificial, and whether consisting of gas, liquid, solid or vapor, whether on its own or in any combination with any other element or substance, which is listed, identified, defined or determined by any Environmental Law or other Applicable Law to be, to have been, or to be capable of being or becoming harmful to mankind or any living organism or damaging to the environment, including, without limitation, oil (as defined in the United States Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended).

 

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Hedge Counterparty” means any entity that is a Lender or an Affiliate of a Lender at the time the applicable Hedging Agreement is entered into, provided that any such Hedge Counterparty shall have the right to transfer to one or more transferees all or a portion of its rights and obligations under the Hedging Agreements, provided, unless an Event of Default has occurred and is continuing, such transferee shall be (a) a Lender, (b) an Affiliate of a Lender, or (c) either (i) a bank or financial institution that, at the relevant time, has a rating for its long-term unsecured and non-credit enhanced debt obligation (or an equivalent rating) of BBB or higher by S&P Global Ratings or Fitch Ratings, Inc., or Baa2 or higher by Moody’s Investors Service, Inc., or a comparable rating from any other internationally recognized credit rating agency, or (ii) a Person whose obligations under the applicable Hedging Agreement are guaranteed by a Person meeting the requirements set out in clause (i) above.

Hedgeable Loan Amount” means the aggregate of (i) the outstanding principal balance of the Term Loan under the Loan Agreement, and (ii) the outstanding principal (excluding the outstanding principal balance of any Revolving Loan) under the Additional Debt Documents.

Hedging Agreement” means any agreement evidencing Hedging Obligations, entered into or to be entered into, as the context may require, between a Hedge Counterparty and the Borrower for the purpose of hedging interest rate liabilities in relation to Program Debt.

Hedging Obligations” means, with respect to any specified Person, the obligations of such Person under:

(1) interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements;

(2) other agreements or arrangements designed to manage interest rates or interest rate risk; and

(3) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates, fuel prices or other commodity prices but excluding (x) clauses in purchase agreements and maintenance agreements pertaining to future prices and (y) fuel purchase agreements and fuel sales that are for physical delivery of the relevant commodity,

it being understood and agreed that, on any date of determination, the amount of such Hedging Obligations under any Hedging Agreement shall be determined based upon the “settlement amount” (or similar term) as defined under such Hedging Agreement or, with respect to a Hedging Agreement that has been terminated in accordance with its terms, the amount then due and payable under such Hedging Agreement.

Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

 

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(b) all direct or contingent obligations of such Person arising under (i) letters of credit (including standby and commercial), bankers’ acceptances and bank guaranties and (ii) surety bonds, performance bonds and similar instruments issued or created by or for the account of such Person;

(c) net obligations of such Person under any Hedging Agreement;

(d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(f) any agreement treated as a finance or capital lease in accordance with GAAP;

(g) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Hedging Agreement on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any Indebtedness of any Person for purposes of clause (e) that is expressly made non-recourse or limited recourse (limited solely to the assets securing such Indebtedness) to such Person shall be deemed to be equal to the lesser of (i) the aggregate principal amount of such Indebtedness and (ii) the fair market value of the property encumbered thereby as determined by such Person in good faith.

Indemnified Liabilities” means any and all liabilities (including all environmental liabilities), obligations, actual losses, damages (including damages as a result of claims for special, indirect or consequential damages brought by third parties), penalties, actions, claims, judgments, suits, costs, taxes, out-of-pocket expenses or disbursements (including reasonable legal fees and expenses and court costs) of any kind or nature whatsoever:

(a) arising directly or indirectly out of or in any way connected with the ownership, possession, performance, transportation, management, sale, import to or export from any jurisdiction, control, use or operation, registration, navigation, certification, classification, management, manning, provisioning, the provision of bunkers and lubricating oils, testing, design, condition, delivery, acceptance, leasing, subleasing, chartering, insurance, maintenance, repair, service, modification, refurbishment, dry docking, survey, conversion, overhaul, replacement, removal, repossession, return, redelivery, storage, sale, disposal, the complete or partial removal, decommissioning, making safe, destruction, abandonment or loss by the Borrower or any other Person of any of the Collateral Vessels or caused by any of the Collateral Vessels becoming a wreck or an obstruction to navigation, whether or not such liability may be attributable to any defect in any of the Collateral Vessels or to the design,

 

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construction or use thereof or from any maintenance, service, repair, dry docking, overhaul, inspection or for any other reason whatsoever (whether similar to any of the foregoing or not), and regardless of when the same shall arise and whether or not any of the Collateral Vessels (or any part thereof) is in possession or control of the Borrower or the Manager or any other Person and regardless of the waters, dry dock or other place where any such Collateral Vessel or part thereof is located;

(b) arising directly or indirectly out of or in any way connected with any release of Hazardous Material, any Environmental Claim, or any breach of an Environmental Law or the terms and conditions of an Environmental Approval; or

(c) as a consequence of any claim that any design, article or material in any of the Collateral Vessels or any part thereof or relating thereto or the operation or use thereof constitutes an infringement of patent, copyright, design or other proprietary right;

(d) in preventing or attempting to prevent the arrest, seizure, taking in execution, requisition, impounding, forfeiture or detention of any of the Collateral Vessels or in securing or attempting to secure the release of any of the Collateral Vessels; and

(e) with respect to the execution, delivery, performance, administration or enforcement of this Agreement or any of the other Collateral Documents,

including any of the foregoing relating to the use of proceeds of any Secured Obligations or the violation of, noncompliance with or liability under any law applicable to or enforceable against the Borrower or any Grantor or any of the Collateral, and all reasonable costs and out-of-pocket expenses (including reasonable fees and out-of-pocket expenses of legal counsel selected by the Indemnitee) incurred by any Indemnitee in connection with any claim, action, investigation or proceeding in any respect relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether or not suit is brought.

Indemnitee” has the meaning set forth in Section 8.10(a).

Initial Intercreditor Agreement” means that certain Intercreditor and Proceeds Agreement dated as of May 15, 2019 by and among the parties hereto, as in effect immediately prior to the Restatement Date.

Insolvency or Liquidation Proceeding” means:

(1) any case commenced by or against any Grantor under Title 11, U.S. Code or any similar Federal or state law or the law of any other jurisdiction for the relief of debtors, any other proceeding for the reorganization, recapitalization or adjustment or marshalling of the assets or liabilities of any Grantor, any receivership or assignment for the benefit of creditors relating to any Grantor or any similar case or proceeding relative to any Grantor or its creditors, as such, in each case whether or not voluntary;

 

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(2) any liquidation, dissolution, marshalling of assets or liabilities or other winding up of or relating to any Grantor, in each case whether or not voluntary and whether or not involving bankruptcy or insolvency; or

(3) any other proceeding of any type or nature in which substantially all claims of creditors of any Grantor are determined and any payment or distribution is or may be made on account of such claims.

Insurance Proceeds” means any and all amounts payable in consequence of a claim under any of the contracts or policies of insurance (including reinsurance) in respect of the Collateral Vessels, other than amounts payable in consequence of a claim under the liability insurances.

Intercreditor Joinder” means, with respect to the provisions of this Agreement relating to any Additional Secured Debt, an agreement substantially in the form of Exhibit B.

“Intercreditor Joinder (Grantor)” means, with respect to the provisions of this Agreement relating to any additional Grantor, an agreement substantially in the form of Exhibit C.

Lien” means any lien, mortgage, pledge, assignment for security, security interest, charge, hypothecation, lease or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, any easement, right of way or other encumbrance on title to real property and any agreement to give any security interest).

Lien Sharing and Priority Confirmation” means, as to any future Additional Secured Debt, the written agreement of the holders of such Additional Secured Debt, as set forth in the Additional Debt Documents, for the benefit of all holders of Secured Obligations and each future Secured Lien Representative:

(1) that all Secured Obligations will be and are secured equally and ratably by all Liens at any time granted by any Grantor to secure any Obligations in respect of such Additional Secured Debt, whether or not upon property otherwise constituting Collateral, and that all such Liens will be enforceable by the Security Trustee for the benefit of all holders of Secured Obligations equally and ratably;

(2) that the holders of Obligations in respect of such Additional Secured Debt are bound by the provisions of this Agreement, including the provisions relating to the ranking of Liens and the order of application of proceeds from Collections and enforcement of Liens; and

(3) consenting to the terms of this Agreement and the Security Trustee’s performance of, and directing the Security Trustee to perform its obligations under, this Agreement and the other Collateral Documents.

Loan Agreement” has the meaning set forth in the recitals.

Loan Documents” has the meaning set forth in the Loan Agreement.

 

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Loan Finance Parties” means the Lenders, Issuing Banks and Administrative Agent under and as defined in the Loan Agreement.

Loan Hedging Obligations” means all Hedging Obligations arising under or pursuant to the Loan Documents.

Loan Secured Obligations” means all “Obligations” as defined in the Loan Agreement, in each case, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising.

Management Agreement” means each management agreement between a Vessel Owner or Vessel Owners and the Manager in respect of one or more Collateral Vessel, as the same may be amended from time to time in accordance with this Agreement.

Management Fees and Expenses” means amounts payable by the Borrower or the Vessel Owners under the Management Agreement.

Manager” means Seaspan Management Services Ltd. of Clarendon House, 2 Church Street, Hamilton, HM 11, Bermuda or such other professional manager or managers as may be permitted to act as such under and pursuant to the terms of each of the Secured Debt Documents, provided that V.Group, Anglo-Eastern or Bernhard Schulte Shipmanagement shall be permitted to act as such in place of Seaspan Management Services Ltd., subject to any and all conditions set out in the Secured Debt Documents in relation to a change in “Manager” being satisfied.

Net Sale Proceeds” means, in relation to a Vessel Disposition permitted by the terms and conditions of the Secured Debt Documents, the amount of cash actually received by the Borrower or relevant Vessel Owner from the relevant purchaser less the aggregate of the following: (a) any VAT or other turnover, added value, sales or similar tax due and payable by the Borrower or Vessel Owner in relation to such Vessel Disposition and which cannot be recovered by the Borrower or Vessel Owner; and (b) transaction costs and expenses reasonably necessarily and properly incurred by the Borrower or relevant Vessel Owner in connection with the Vessel Disposition, such as (but not limited to) legal, notarial and other fees, cost incurred in moving or dry-docking the Collateral Vessel, costs of putting that Collateral Vessel in a marketable condition (if any), costs of conforming that Collateral Vessel to the relevant purchaser agreement requirements (if any).

Obligations” means any principal (including reimbursement obligations with respect to letters of credit whether or not drawn), interest (including all interest accrued thereon after the commencement of any Insolvency or Liquidation Proceeding at the rate, including any applicable post-default rate, specified in the Secured Debt Documents, even if such interest is not enforceable, allowable or allowed as a claim in such proceeding), premium (if any), fees, indemnifications, reimbursements, expenses and other liabilities payable under the documentation governing any Indebtedness.

 

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Person” means an individual, partnership, corporation (including a business trust), joint stock company, estate, trust, limited liability company, unincorporated association, joint venture or other entity, or a Governmental Authority.

Priority Payment Amounts” means with respect to any Collection Period, all amounts which would be paid on the applicable Payment Date pursuant to Sections 4.02(a)(i) to (x) of this Agreement, from amounts then standing to the credit of the Collection Account, calculated as if the Borrower had no right to withdraw funds from the Collection Account (or directly from the HK Collection Account in accordance with Section 4.01(c)(B)), during such Collection Period as may otherwise be provided for (from time to time) under Section 4.02(b) of this Agreement.

Priority Vessel Expenses” means the following operating expenses, in each case directly related to the Collateral Vessels:

(a) crew training;

(b) shore based crewing support;

(c) vessel and fleet management;

(d) victualling;

(e) stores;

(f) bunkers and lubricants;

(g) spare parts;

(h) repair and maintenance costs;

(i) vessel ancillary operating expenses (agency fees, petties, international regulatory compliance, amenities fund, garbage disposal, bank charges, out of pocket travel, travel expenses for operational visits on vessels, and owner’s expenses relating to ad-hoc damages and port fees);

(j) dry-docking, survey expenses and modification expenses (as required by class society and/or flag state and/or regulatory requirements);

(k) re-positioning costs during off-hire;

(l) technology (communication systems, satellite costs, information technology needed to run the vessel);

(m) classification, tonnage tax and oil analysis expenses;

(n) insurance premiums and other amounts payable in respect of the required Insurances;

 

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(o) ratings’ and officers’ wages and disbursements; and

(p) the cost of any appraisals obtained from an appraiser for the purposes of the Secured Debt Documents.

Program Debt” means all Indebtedness constituting Secured Obligations.

Qualified ECP Guarantor” means, in respect of any Hedging Obligation, each Grantor that has total assets exceeding $10,000,000 at the time the relevant Guarantee or grant of the relevant security interest becomes effective with respect to such Hedging Obligation or such other Person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another Person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

Remittance Date” means, with respect to each Collection Period, each of the last Business Day in each calendar week falling within such Collection Period.

Representatives” means each of the Agent, the Security Trustee, the Account Bank and any other Secured Lien Representative.

Restatement Date” has the meaning given to that term in the Amended and Restated Loan Agreement.

Revolving Facilities” means together (i) the “Revolving Facility” as defined in the Loan Agreement, and (ii) in respect of any second revolving facility provided for under any other Additional Debt Document, the revolving loan commitments of any Lender thereunder to make revolving loans to the Borrower subject to the terms thereof and all revolving loan related credit extensions made thereunder (and “Revolving Facility” shall mean any of them).

Revolving Loans” means together (i) the “Revolving Loan” as defined in the Loan Agreement, and (ii) any second revolving facility provided for under any other Additional Debt Document (and “Revolving Loan” shall mean any of them).

SEC” means the United States Securities and Exchange Commission.

Secured Debt Default” means any event or condition which, under the terms of any credit agreement, note purchase agreement, indenture or other agreement governing any Secured Obligations causes, or permits holders of Secured Obligations outstanding thereunder (with or without the giving of notice or lapse of time, or both, and whether or not notice has been given or time has lapsed) to cause, the Secured Obligations outstanding thereunder to become immediately due and payable.

Secured Debt Documents” means the Loan Documents and the Additional Debt Documents.

 

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Secured Lien Representative” means (1) in the case of the Loan Agreement, the Administrative Agent and (2) in the case of any other Additional Secured Debt, the trustee, agent or representative of the holders of such Additional Secured Debt who maintains the transfer register for such Additional Secured Debt (if applicable) and (a) is appointed as a Secured Lien Representative (for purposes related to the administration of the Collateral Documents) pursuant to the indenture, credit agreement, note purchase agreement or other agreement governing such Additional Secured Debt, together with its successors in such capacity, and (b) has executed an Intercreditor Joinder.

Secured Obligations” means (a) all Loan Secured Obligations and (b) all Additional Debt Secured Obligations.

Secured Parties” means the holders of Secured Obligations and the Secured Lien Representatives.

Security Trustee” has the meaning set forth in the preamble.

Senior Extraordinary Expenses” means unanticipated expenses required to be borne by the Borrower or the applicable Vessel Owner, including (without limitation) (i) in connection with any Vessel Disposition, (ii) in payment for expenses and liabilities in connection with the exercise of remedies with respect to any charter obligor, (iii) in payment for the advice of counsel and the cost of certain opinions of counsel, and (iv) relating to maintenance of the Secured Obligations and the Secured Debt Documents, including fees and expenses of any extensions of or incurrence of Secured Obligations, in each case to the extent such amounts are due and payable prior to the next Payment Date.

Series of Secured Debt” means (1) Indebtedness of the Borrower and the Obligors under the Loan Agreement, and (2) each other issue or series of Additional Secured Debt for which a single transfer register is maintained.

Subordinated Agreement” means each agreement (i) between the Primary Guarantor and the Borrower, (ii) between the Borrower and any Vessel Owner and (iii) between the Primary Guarantor and any Vessel Owner, in each case pursuant to which one party advances loans or other financial accommodations or indebtedness to the other party.

Subordinated Party” means any Person that has entered into or does from time to time enter into a Subordinated Agreement.

Swap” means any trade or transaction entered into by the Borrower and a Hedge Counterparty under or pursuant to a Hedging Agreement.

Swap Termination Value” means, in respect of any one or more Swaps, after taking into account the effect of any legally enforceable netting agreement relating to such Swaps, (a) for any date on or after the date such Swaps have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swaps, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swaps.

 

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Total Loss” means in relation to a Collateral Vessel:

(a) actual, constructive, compromised, agreed or arranged total loss of that Collateral Vessel;

(b) requisition for title or other compulsory acquisition of that Collateral Vessel otherwise than by requisition for hire;

(c) capture, seizure, arrest, detention, or confiscation of that Collateral Vessel by any government or by Persons acting or purporting to act on behalf of any government or by any other Person which deprives the Borrower or Vessel Owner or as the case may be the Charterer of the use of that Collateral Vessel for more than sixty (60) days after that occurrence; and

(d) requisition for hire of that Collateral Vessel by any government or by Persons acting or purporting to act on behalf of any government or by any other Person which deprives the Borrower or Vessel Owner or as the case may be the Charterer of the use of that Collateral Vessel for a period of sixty (60) days.

Total Loss Proceeds” means all Insurance Proceeds payable in respect of a Total Loss.

Trust Estate” has the meaning set forth in Section 2.02.

UCC” means the Uniform Commercial Code as in effect in the State of New York or any other applicable jurisdiction.

US$ Equivalent” means, with respect to any monetary amount in a currency other than U.S. dollars, at any time of determination, the amount of U.S. dollars obtained by converting such foreign currency involved in such computation into U.S. dollars at the average of the spot rates for the purchase and sale of U.S. dollars with the applicable foreign currency as published in The Wall Street Journal on the date two Business Days prior to such determination.

Vessel Disposition” has the meaning set forth in the Loan Agreement.

SECTION 1.02. Rules of Interpretation. All terms used in this Agreement that are defined in Article 9 of the UCC and not otherwise defined herein have the meanings assigned to them in Article 9 of the UCC. (b) Unless otherwise indicated, any reference to any agreement, instrument or obligation will be deemed to include a reference to that agreement, instrument or obligation as assigned, amended, restated, refinanced, supplemented or otherwise modified and in effect from time to time or replaced in accordance with or contemplated pursuant to the terms of this Agreement.

(c) The use in this Agreement or any of the other Collateral Documents of the word “include” or “including,” when following any general statement, term or matter, will not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not nonlimiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but will be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter. The word “will” shall be construed to have the same meaning and effect as the word “shall.”

 

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(d) References to “Sections,” “clauses,” “recitals” and the “preamble” will be to Sections, clauses, recitals and the preamble, respectively, of this Agreement unless otherwise specifically provided. References to “Articles” will be to Articles of this Agreement unless otherwise specifically provided. References to “Exhibits” and “Schedules” will be to Exhibits and Schedules, respectively, to this Agreement unless otherwise specifically provided.

(e) Notwithstanding anything to the contrary in this Agreement, any references contained herein to any section, clause, paragraph, definition or other provision of a Secured Debt Document (including any definition contained therein) shall be deemed to be a reference to such section, clause, paragraph, definition or other provision as in effect on the date of this Agreement; provided that any reference to any such section, clause, paragraph or other provision shall refer to such section, clause, paragraph or other provision of the Secured Debt Documents (including any definition contained therein) as amended or modified from time to time if such amendment or modification has been (1) made in accordance with the Secured Debt Documents and (2) prior to the Discharge of Secured Obligations, approved in a writing delivered to the Security Trustee by, or on behalf of, the requisite holders of Secured Obligations as are needed (if any) under the terms of this Agreement to approve such amendment or modification.

This Agreement and the other Collateral Documents will be construed without regard to the identity of the party who drafted it and as though the parties participated equally in drafting it. Consequently, each of the parties acknowledges and agrees that any rule of construction that a document is to be construed against the drafting party will not be applicable either to this Agreement or the other Collateral Documents.

ARTICLE II

The Trust Estate

SECTION 2.01. Declaration of Trust. To secure the payment of the Secured Obligations and in consideration of the premises and mutual agreements set forth in this Agreement:

(i) each of the Secured Parties (other than the Security Trustee) irrevocably appoints the Security Trustee in accordance with the following provisions of this Agreement to act as Security Trustee under this Agreement and in connection with the Secured Debt Documents, and irrevocably authorises the Security Trustee to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Security Trustee under or in connection with the Secured Debt Document together with any other rights, powers, authorities and discretions as are necessarily incidental thereto; and

 

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(ii) the Security Trustee hereby accepts such appointment and agrees to hold, in trust under this Agreement for the benefit of all current and future Secured Parties, all of each Obligor’s right, title and interest in, to and under all Collateral granted or pledged to the Security Trustee under any Collateral Documents for the benefit of the Secured Parties, together with all of the Security Trustee’s right, title and interest in, to and under such Collateral Documents, and all interests, rights, powers and remedies of the Security Trustee thereunder or in respect thereof and all cash and non-cash proceeds thereof (collectively, the “Trust Estate”).

The Security Trustee and its successors and permitted assigns under this Agreement will hold the Trust Estate in trust for the benefit solely and exclusively of all current and future Secured Parties as security for the payment of all current and future Secured Obligations.

Notwithstanding the foregoing, if at any time:

(i) all Liens securing the Secured Obligations have been released as provided in Section 3.09(a);

(ii) the Security Trustee holds no other property in trust as part of the Trust Estate; and

(iii) the Discharge of Secured Obligations shall have occurred,

then the Trust Estate arising hereunder will automatically terminate, except that all provisions set forth in Sections 8.09 and 8.10 that are enforceable by the Security Trustee, or any of its agents (whether in an individual or representative capacity) will remain enforceable in accordance with their terms.

The parties further declare and covenant that the Trust Estate will be held and distributed by the Security Trustee subject to the further agreements herein.

SECTION 2.02. Equal and Ratable Sharing of Collateral by Holders of Secured Obligations. The Security Trustee and each Secured Lien Representative (on behalf of each holder of Secured Obligations) agree that, notwithstanding:

(1) anything to the contrary contained in the Collateral Documents;

(2) the time of incurrence of any Secured Obligations;

(3) the order or method of attachment or perfection of any Liens securing any Secured Obligations;

(4) the time or order of filing of financing statements, applications for registration or other documents filed, registered or recorded to perfect any Lien upon any Collateral;

(5) the time of taking possession or control over any Collateral;

(6) that any Lien may not have been perfected or may be or have become subordinated, by equitable subordination or otherwise, to any other Lien; or

 

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(7) the rules for determining priority under any law governing relative priorities of Liens:

(a) all Liens granted at any time by any Grantor will secure, equally and ratably, all current and future Secured Obligations; and

(b) all proceeds of all Liens granted at any time by any Grantor will be allocated and distributed equally and ratably on account of the Secured Obligations in accordance with this Agreement.

This Section 2.02 is intended for the benefit of, and will be enforceable as a third party beneficiary by, each current and future holder of Secured Obligations, each current and future Secured Lien Representative and the Security Trustee as holder of Liens.

ARTICLE III

Obligations and Powers of Security Trustee

SECTION 3.01. Undertaking of the Security Trustee

(a) Each Secured Party acting through its Secured Lien Representative hereby appoints the Security Trustee to serve as Security Trustee hereunder on the terms and conditions set forth herein. Subject to, and in accordance with, this Agreement, the Security Trustee will, as Security Trustee, upon the terms and conditions set forth herein and for the benefit solely and exclusively of the present and future Secured Parties:

(i) accept, enter into, receive, hold and enforce all Collateral Documents, including all Collateral subject thereto, and all Liens created thereunder, distribute the proceeds of all Liens upon the Collateral at any time held by it in trust and for the benefit of the current and future holders of the Secured Obligations, perform its obligations under the applicable Collateral Documents and protect, exercise and enforce the interests, rights, powers and remedies granted or available to it under, pursuant to or in connection with the applicable Collateral Documents;

(ii) take all lawful and commercially reasonable actions permitted under the applicable Collateral Documents that it may deem necessary or advisable to prove, protect or preserve the Liens securing the Secured Obligations;

(iii) deliver and receive notices pursuant to the applicable Collateral Documents;

(iv) sell, assign, collect, assemble, foreclose on, institute legal proceedings with respect to, or otherwise exercise or enforce the rights and remedies of a Secured Party (including a mortgagee, trust deed beneficiary and insurance beneficiary or loss payee) with respect to the Collateral under the applicable Collateral Documents and its other interests, rights, powers and remedies;

 

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(v) remit as provided in Section 3.05 all cash proceeds received by the Security Trustee from the collection, foreclosure or enforcement of its interest in the Collateral under the applicable Collateral Documents or any of their other interests, rights, powers or remedies;

(vi) execute and deliver amendments to the applicable Collateral Documents as from time to time authorized pursuant to Section 7.01; and

(vii) execute documentation evidencing the release of any Lien granted to it by any Collateral Document upon any Collateral or stating that no Lien under any Collateral Document exists on specified property that does not constitute Collateral if and as required by and subject to satisfaction of the conditions set forth in Section 3.09.

(b) Each party to this Agreement acknowledges and consents to the undertaking of the Security Trustee set forth in Sections 3.02(a) and agrees to each of the other provisions of this Agreement applicable to the Security Trustee.

(c) Notwithstanding anything to the contrary contained in this Agreement or any other Secured Debt Documents, the Security Trustee will not commence any exercise of remedies or any foreclosure actions or otherwise take any action or proceeding against or in respect of any of the Collateral (other than actions necessary to prove, protect or preserve the Liens securing the Secured Obligations) unless and until it shall have been directed by written notice of an Act of Required Debtholders and then only in accordance with the provisions of this Agreement.

(d) Except as provided otherwise in this Agreement or as directed by an Act of Required Debtholders in accordance with this Agreement, the Security Trustee will not be obligated to:

(i) act upon directions purported to be delivered to it by any Person;

(ii) foreclose upon or otherwise enforce any Lien; or

(iii) take any other action whatsoever with regard to any or all of the applicable Collateral Documents, the Liens created thereby or the Collateral.

SECTION 3.02. Release or Subordination of Liens. The Security Trustee will not execute any documentation evidencing the release or subordination of any Lien in respect of any Secured Obligations or consent to the release or subordination of any such Lien, except:

(a) as permitted by Section 3.09;

(b) as directed by an Act of Required Debtholders to the effect that the release or subordination was permitted by each applicable Secured Debt Document;

(c) as required by Article IV; or

(d) as ordered pursuant to applicable law under a final and non-appealable order or judgment of a court of competent jurisdiction.

 

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SECTION 3.03. Enforcement of Liens. If the Security Trustee at any time receives written notice that any event has occurred that constitutes an “Event of Default” under any Secured Debt Document entitling the Security Trustee to foreclose upon, collect or otherwise enforce any of its Liens under the applicable Collateral Documents, it will promptly deliver written notice thereof to each Secured Lien Representative. Thereafter, the Security Trustee may await direction by an Act of Required Debtholders and will act, or decline to act, subject to Section 6.10 hereof, as directed by an Act of Required Debtholders, in the exercise and enforcement of the Security Trustee’s interests, rights, powers and remedies in respect of the Collateral or under the applicable Collateral Documents or applicable law and, following the initiation of such exercise of remedies, the Security Trustee will act, or decline to act, subject to Section 6.10 hereof, with respect to the manner of such exercise of remedies as directed by an Act of Required Debtholders. Unless it has been directed to the contrary by an Act of Required Debtholders, the Security Trustee in any event may (but will not be obligated to) take or refrain from taking such action with respect to any Secured Debt Default under any Secured Debt Document as it may deem advisable and in the best interest of the holders of Secured Obligations.

SECTION 3.04. Application of Proceeds. If any Collateral is sold or otherwise realized upon by the Security Trustee in connection with any foreclosure, collection, sale or other enforcement of Liens granted to the Security Trustee in the applicable Collateral Documents, the proceeds received by the Security Trustee from such foreclosure, collection, sale or other enforcement will, subject to any mandatory provision of local law applicable to such Collateral or Collateral Document, be distributed in the order of application set out in Section 4.02.

SECTION 3.05. Powers of the Security Trustee. The Security Trustee is irrevocably authorized and empowered to enter into and perform its obligations and protect, perfect, exercise and enforce its interest, rights, powers and remedies under the Collateral Documents and applicable law and in equity and to act as set forth in this Article III, Article V or as requested in any lawful directions given to it from time to time in respect of any matter by an Act of Required Debtholders.

SECTION 3.06. Documents and Communications. The Security Trustee will permit each Secured Lien Representative and each holder of Secured Obligations upon reasonable written notice from time to time during regular business hours to inspect and copy, at the cost and expense of the party requesting such copies, any and all Collateral Documents and other documents, notices, certificates, instructions or communications received by the Security Trustee in its capacity as such.

SECTION 3.07. For Sole and Exclusive Benefit of Holders of Secured Obligations. The Security Trustee will accept, hold, administer and enforce all Liens on the Collateral at any time transferred or delivered to it and all other interests, rights, powers and remedies at any time granted to or enforceable by the Security Trustee and all other property of the Trust Estates solely and exclusively for the benefit of the present and future holders of present and future Secured Obligations, and will distribute all proceeds received by it in realization thereon or from enforcement thereof solely and exclusively pursuant to the provisions hereof.

SECTION 3.08. Additional Secured Debt. (a) The Security Trustee will, as a Security Trustee hereunder, perform its undertakings set forth in Section 3.02(a) with respect to each holder of Additional Debt Secured Obligations that is issued or incurred on or after the date hereof that:

(i) holds Secured Obligations that are identified as Additional Debt Secured Obligations in accordance with the procedures set forth in Section 3.08(b) and (c); and

 

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(ii) signs, through its designated Secured Lien Representative identified pursuant to Section 3.08(b), an Intercreditor Joinder and delivers the same to the Security Trustee.

(b) In addition to the Borrower’s right to request increased commitments under and in accordance with the terms of the Loan Agreement, the Borrower will be permitted to incur additional secured debt (“Additional Secured Debt”) by way of issuing private placement notes, or entering into further secured loan facilities, provided that:

(i) the total amount of the aggregate of the Loan Secured Obligations and the Additional Debt Secured Obligations shall not exceed $2,500,000,000;

(ii) no Secured Debt Default or Event of Default shall have occurred and be continuing on the date on which such Additional Secured Debt comes into effect and after giving effect to such Additional Secured Debt;

(iii) the Borrower shall not be entitled to have more than two revolving credit facilities at any one time, save that any Borrowing under a second revolving facility will be subject to the First Revolving Facility then being fully drawn;

(iv) prior to entering into any Additional Debt Documents, the Borrower shall inform the Administrative Agent of its intention to incur Additional Secured Debt and the proposed terms of such Additional Secured Debt and shall give all holders of the Secured Obligations at such time such further non-confidential information in relation to the such Additional Secured Debt as they may reasonably request;

(v) the Security Trustee shall be appointed as security trustee pursuant to the Additional Debt Documents, to act as Security Trustee in respect thereof, in accordance with the terms of this Agreement and Citibank, N.A. shall be appointed as administrative agent (or equivalent position), as applicable, in respect of such Additional Secured Debt;

(vi) the payment and satisfaction of all of the Additional Debt Secured Obligations and the Loan Secured Obligations will be secured equally and ratably by the Liens established in favor of the Security Trustee for the benefit of the Secured Parties; and

(vii) the Borrower shall deliver an Additional Secured Debt Designation in accordance with 3.08(c) below.

(c) The Borrower will (subject to 3.08(b) above) be permitted to designate as an additional holder of Secured Obligations hereunder each Person who is, or who becomes, the registered holder of Additional Secured Debt on or after the date of this Agreement in accordance with the terms of all applicable Additional Debt Documents and this Agreement. The Borrower may only effect such designation by delivering to the Security Trustee an Additional Secured Debt Designation upon entry into any new Additional Debt Document, which:

(i) states that the Borrower intends to incur or has incurred Additional Secured Debt which will be secured by the Lien of the Collateral equally and ratably with the Loan Secured Obligations and all previously existing and future Additional Debt Secured Obligations;

 

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(ii) specifies the name and address of the Additional Debt Representative for such Additional Secured Debt;

(iii) states that the Borrower has duly authorized, executed (if applicable) and recorded or registered (or caused to be recorded or registered) in each appropriate governmental office all relevant filings, applications for registration and recordations to ensure that the Additional Secured Debt is secured by the Collateral in accordance with the applicable Collateral Documents;

(iv) attaches as Exhibit 1 to such Additional Secured Debt Designation a Reaffirmation Agreement duly executed by the Borrower and the Primary Guarantor, which Reaffirmation Agreement shall be substantially in the form of Exhibit 1 to Exhibit A hereto; and

(v) states that the Borrower has caused a copy of the Additional Secured Debt Designation and the related Intercreditor Joinder to be delivered to each then existing Secured Lien Representative.

Notwithstanding the foregoing, nothing in this Agreement will be construed to allow the Borrower (or any Vessel Owner) to incur additional Indebtedness unless expressly permitted by, and carried out in accordance with the terms of this Agreement.

SECTION 3.09. Release of Collateral

(a) Subject to 3.09(c), upon the Discharge of Secured Obligations, the Collateral shall be released without recourse or warranty from the Liens constituted by the Collateral Documents, and the Security Trustee shall (at the cost of the Borrower) execute such documents and agreements, give such notices, and take such further action as the Borrower may reasonably request in order to give effect to such release, discharge, return or termination, as applicable, of such Collateral.

(b) Subject to 3.09(c), upon a Vessel Disposition, Total Loss or other partial prepayment in respect of a Collateral Vessel, following application of the Net Sale Proceeds, Total Loss Proceeds, or the prepayment amount, pursuant to Sections 4.02 or other removal of a Collateral Vessel as part of the Collateral as permitted by the Secured Debt Documents, as applicable, provided that, following such application (and the release of Collateral under this (b)) there would be no Default or Event of Default (or equivalent term, howsoever described, under any Additional Debt Documents), BB Event or DSCR Cash Sweep Event then in existence, the Collateral in respect of the specific Collateral Vessel the subject of the Vessel Disposition, Total Loss, prepayment or removal shall be released without recourse or warranty from the Liens constituted by the Collateral Documents, and the Security Trustee shall (at the cost of the Borrower) execute such documents and agreements, give such notices, and take such further action as the Borrower may reasonably request in order to give effect to such release, discharge, return or termination, as applicable, of such Collateral.

 

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(c) The Security Trustee shall not be required to release any part of the Collateral if either the Security Trustee or any Secured Lien Representative has been advised in writing by appropriate legal counsel satisfactory to it that, by reason of the application of any bankruptcy, insolvency or other applicable laws affecting creditors’ rights and the discharge of obligations, the Security Trustee, any Secured Lien Representative or any Secured Party will be, or will become likely to be, obliged to pay to or account to any Grantor or any liquidator or trustee in bankruptcy of any Grantor any amount corresponding to all or any part of the amount paid in or towards such discharge.

ARTICLE IV

Cash Management

SECTION 4.01. Accounts.

(a) The Borrower shall at all times until the Discharge of Secured Obligations maintain and procure the maintenance of the Charged Accounts with the applicable Account Bank.

(b) No withdrawal may be made from the Charged Accounts except as permitted by this Agreement or the Secured Debt Documents. Each instruction in relation to any withdrawal from a Charged Account shall be copied to, and provided simultaneously with provision thereof to the Account Bank to, the Security Trustee and each Secured Lien Representative.

(c) Subject to Section 4.01(d), the Borrower shall procure that any and all monies payable directly or indirectly to the Borrower and/or each other Obligor from, comprising or in connection with:

(i) Earnings in respect to a Collateral Vessel;

(ii) any monies which the Hedge Counterparties are required to pay to the Borrower from time to time pursuant to any Hedging Agreement;

(iii) any earnings on investments of funds held in any Charged Account;

(iv) Insurance Proceeds (other than Total Loss Proceeds); and

(v) Proceeds from the Collateral (other than Net Sale Proceeds),

that relate to or are connected to the Secured Debt Documents or any Collateral Vessel shall be paid directly to the Collection Account provided that (a) monies described above shall be permitted to be paid first to the HK Collection Account and (b) if it is demonstrated to the reasonable satisfaction of the Security Trustee that such is required by applicable law or to mitigate an adverse Tax or legal consequence, such portion of Earnings as is so required may be paid instead to the relevant Vessel Owner Account. Subject to Section 4.01(d) in respect of amounts constituting Net Sale Proceeds and Total Loss Proceeds, any amounts standing to the credit of the HK Collection Account and any Vessel Owner Account shall as soon as practicable, and in any event not later than five (5) Business Days after payment into such account be credited into either (A) the Collection Account, or (B) where the Borrower would be permitted to withdraw such amounts from the Collection Account pursuant to Section 4.02(b) were such amounts already credited to the Collection Account, to such other account nominated by the Borrower.

 

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(d) The Borrower shall procure that any and all Net Sale Proceeds and Total Loss Proceeds shall be paid directly to the HK Collection Account and then shall as soon as practicable, and in any event not later than five (5) Business Days after payment into such account be credited into the Collateral Account, for further application in accordance with Sections 4.02(d) and (e).

SECTION 4.02. Application of Proceeds

(a) All amounts standing to the credit of the Collection Account as of each Determination Date collected during the relevant Collection Period shall be applied, by the Borrower, on each Payment Date, on each Remittance Date, (following an Event of Default which is continuing) on each date required by an Act of Required Debtholders, and, in respect of any Revolving Loan, on each Interest Payment Date in respect of such Revolving Loan in the following order of priority but (i) in respect of any application on a Remittance Date (that is not also a Payment Date) only up to and including “thirdly” below, (ii) in respect of any application on an Interest Payment Date in respect of any Revolving Loan (that is not also a Payment Date) only amounts in respect thereof set out under “fourthly” below, and (iii) (unless otherwise stated below) only to the extent that all distributions of a higher priority have been made in full, in payment:

(i) firstly, pari passu and pro rata: to (i) the Representatives in discharging fees, Expenses and indemnity payments owing to the Representatives (or any of them) and (ii) to the Borrower or as it may direct for reimbursement for Priority Vessel Expenses (to the extent due and payable prior to the next Payment Date) and Administrative Expenses;

(ii) secondly, pari passu and pro rata: to the Manager or as it may direct, for reimbursement of Management Fees and Expenses, provided that the amount of Management Fees and Expenses paid under this secondly shall not exceed an amount equal to US$1,000 per Collateral Vessel per day;

(iii) thirdly, pari passu and pro rata: to the Borrower or as it may direct, for reimbursement for Senior Extraordinary Expenses, provided that the amount of Senior Extraordinary Expenses paid under this thirdly shall not exceed an amount of $250,000 in any calendar year;

(iv) fourthly, pari passu and pro rata:

(1) to the Lenders and any Issuing Banks for application in or towards the discharge of the Borrower’s liabilities in respect of payment of Commitment Fees, L/C Fees and L/C Fronting Fees and interest then due and payable (including Default Interest) on the Loans under the Loan Agreement;

 

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(2) to the Additional Debt Representatives for onwards payment to the Additional Debt Finance Parties in or towards the discharge of the Borrower’s liabilities in respect of commitment fees and interest then due (including default interest) under the Additional Debt Documents; and

(3) to each Hedge Counterparty on a pro rata basis of net scheduled payments (including default interest) due to such Hedge Counterparty under the relevant Hedging Agreement;

(v) fifthly, pari passu and pro rata:

(1) to the Lenders for application in or towards the discharge of the Borrower’s liabilities in respect of principal then due and payable on the Loans under the Loan Agreement and to the Administrative Agent for application in or towards the discharge of the Borrower’s liabilities to Cash Collateralize any Letter of Credit;

(2) to the Additional Debt Representatives for onwards payment to the Additional Debt Finance Parties in or towards the discharge of the Borrower’s liabilities in respect of principal then due under the Additional Debt Documents; and

(3) to each Hedge Counterparty on a pro rata basis of termination payments due to such Hedge Counterparty under the relevant Hedging Agreement (including, for the avoidance of any doubt, any termination payments due to such Hedge Counterparty in connection with any prepayments under clauses (vii) and (viii) below);

(vi) sixthly pari passu and pro rata: for application in or towards discharge of any Grantor’s other liabilities due and payable to the Loan Finance Parties, the Additional Debt Finance Parties, the Representatives or any of them under any of the Secured Debt Documents;

(vii) seventhly: if a DSCR Cash Sweep Event is continuing, fifty per cent. of all remaining amounts shall be applied first, pro rata and pari passu to repay any outstanding principal of the Revolving Facility under the Loan Agreement and any Revolving Facility under any Additional Debt Document, and secondly, pro rata and pari passu, to repay the outstanding principal of the Term Loan under the Loan Agreement and the outstanding principal (other than in respect of any Revolving Facility) under the Additional Debt Documents (provided that if any Additional Debt Finance Party elects not to receive such amounts, such amounts shall be applied repay the outstanding principal of the Term Loan under the Loan Agreement);

(viii) eighthly: if a BB Event is continuing, the lesser of (x) all remaining amounts and (y) an amount, which when added to any prepayments of Secured Obligations, cash collateral deposited into the Collateral Account, any Additional Vessels included in the Collateral and any other security for the Secured Obligations provided to and accepted by the Security Trustee, necessary to cure the related BB Event (and such that, upon application of such amount, the related BB Event shall be cured) shall be applied first pro rata and pari passu to repay any outstanding principal of the Revolving Facility under the Loan Agreement and any Revolving Facility under any Additional Debt Document and secondly, pro rata and pari passu, to repay the outstanding principal of the Term Loan under the Loan Agreement and the outstanding principal (other than in respect of any Revolving Facility) under the Additional Debt Documents (provided that if any Additional Debt Finance Party elects not to receive such amounts, such amounts shall be applied repay the outstanding principal of the Term Loan under the Loan Agreement);

 

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(ix) ninthly: to the Manager or as it may direct, for reimbursement of Management Fees and Expenses not paid under secondly above;

(x) tenthly: to the Borrower or as it may direct, for reimbursement for Senior Extraordinary Expenses not paid under thirdly above; and

(xi) lastly, provided no Event of Default has occurred and is continuing and the Grantors are in compliance with all covenants under the Secured Debt Documents, any balance remaining to the Borrower or as it may direct (and if an Event of Default has occurred and is continuing or the Grantors are not in compliance with all covenants under the Secured Debt Documents any balance shall remain in the Collection Account until the next application of this Section 4.02(a)).

(b) Subject to Section 4.02(c) below, provided that no Default or Event of Default (or equivalent term(s) howsoever described under any Additional Debt Documents) has occurred and is continuing and provided further that the DSCR Ratio is greater than 1.75:1.0x. and that no BB Event is then in existence, the Borrower shall be permitted to make withdrawals from the Collection Account, or directly from the HK Collection Account in accordance with Section 4.01(c)(B), on each day during a Collection Period and prior to the applicable Payment Date; provided that the Borrower shall ensure that the aggregate amount of all Earnings remitted to the HK Collection Account during such Collection Period is sufficient to pay the applicable Priority Payment Amounts for that Collection Period, in full on the relevant Payment Date.

(c) In relation to the foregoing Section 4.02(b) and without the benefit of any grace period that might otherwise be available to an Obligor pursuant to this Agreement or any other Secured Debt Document, should any of the Priority Payment Amounts not be paid in full on the relevant Payment Date (from either funds then standing to the credit of the Collection Account or from other cash available to the Guarantor Group for that purpose), then the Borrower shall no longer be permitted to make withdrawals on any day during a Collection Period from the Collection Account (or directly from the HK Collection Account in accordance with Section 4.01(c)(B)) in such manner provided for in Section 4.02(b) for any subsequent Collection Period, save that the provisions of Section 4.02(a) of this Agreement shall continue to apply to the exclusion of Section 4.02(b).

(d) Subject to Section 4.02(e) below, all amounts standing to the credit of the Collateral Account shall be retained in the Collateral Account pending application in accordance with the following provisions:

(i) the Borrower shall certify the amount, if any, by which the amount standing to the credit of the Collateral Account exceeds the amount required to be retained in the Collateral Account such that the BB Ratio is less than 1.0:1.0x (the “Excess Amount”) in each Compliance Certificate and a copy thereof shall be provided to the Security Trustee;

 

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(ii) provided no Event of Default has occurred and is continuing and the Grantors are in compliance with all covenants under the Secured Debt Documents, the Security Trustee shall not later than one Business Day prior to each Payment Date consent to the withdrawal of the Excess Amount from the Collateral Account and payment of such amount to the Collection Account for application in accordance with Section 4.02(a) above; and

(iii) all amounts standing to the credit of the Collateral Account other than the Excess Amount shall be retained in the Collateral Account and applied in accordance with this Section 4.02(d) following the next Determination Date.

(e) Upon notice to the Administrative Agent, and in connection with any Vessel Disposition, amounts representing Net Sale Proceeds and which are standing to the credit of the Collateral Account, may be withdrawn from the Collateral Account on any day during a Collection Period and applied in immediate prepayment of any Borrowing under any Secured Debt Document in whole or in part, in accordance with Section 2.05 of the Loan Agreement or the equivalent provision of such other applicable Secured Debt Document; provided that the Borrower shall have delivered to the Agent a Compliance Certificate signed by the Borrower evidencing that such Vessel Disposition and subsequent prepayment will not give rise to a Default, a Concentration Limit Event, a breach of the Guarantor Financial Covenants, a BB Event or a DSCR Cash Sweep Event.

(f) In making any determinations and allocations or in giving any consent or authorizations required in accordance with Section 4.02 of this Agreement, the Security Trustee may conclusively rely upon information supplied by the Borrower and, as to the amounts of unpaid principal and interest and other amounts outstanding with respect to its respective Secured Debt Documents, the relevant Secured Lien Representative.

SECTION 4.03. Required Hedging

(a) No later than six (6) months after the Restatement Date, and thereafter following entry into any Additional Debt Documents, six (6) months after the date of such Additional Debt Document, the Borrower shall enter into, and subsequently maintain in effect, one or more interest rate hedge transactions under Hedging Agreements to ensure that the notional principal amount hedged by the Hedging Agreements is, in aggregate:

(i) not less than twenty percent (20%); and

(ii) not more than one hundred percent (100%),

of the Hedgeable Loan Amount (taking into account the amortization of the Loans) (such

requirement, the “Hedging Requirement”); provided that if any principal amount remains outstanding under any fixed rate private placement notes issued by the Borrower and which constitute Additional Secured Debt (“PPN Principal”), an amount equivalent to such PPN Principal shall be credited towards the Hedging Requirement.

 

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(b) The Borrower shall not terminate, break or otherwise cancel any Swap except (i) for the portion of a Swap relevant to a prepayment of a Loan or other Additional Secured Debt amount required or permitted in accordance with the Secured Debt Documents and (ii) where it is economically prudent and advantageous to do so in the circumstances provided that a termination, break or cancellation under (ii) shall not be permitted if it would otherwise breach the Hedging Requirement or if there is then at such time a Cash Sweep Event or if it would cause a Cash Sweep Event.

(c) Each Hedging Agreement shall provide that no transferee of a Hedge Counterparty under such Hedging Agreement shall be any Person other than a Person meeting the requirements for being a “Hedge Counterparty” hereunder.

ARTICLE V

Guarantee and Subordination

SECTION 5.01. Guarantee and Indemnity (a) Each Guarantor hereby irrevocably and unconditionally jointly and severally, to the greatest extent permitted by applicable law:

(i) guarantees to each Secured Party punctual performance by each other Grantor of all that Grantor’s obligations under the Secured Debt Documents;

(ii) undertakes with each Secured Party that whenever any Grantor does not pay any amount when due to a Secured Party under or in connection with any Secured Debt Document, that Guarantor shall immediately on demand pay that amount as if it was the principal obligor and not merely as surety; and

(iii) agrees with each Secured Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Secured Party immediately on demand against any cost, loss or liability it incurs as a result of a Grantor not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Secured Debt Document on the date when it would have been due. The amount payable by a Guarantor under this indemnity will not exceed the amount it would have had to pay under this Section 5.01 if the amount claimed had been recoverable on the basis of a guarantee.

(b) This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by each Grantor to the Secured Parties under the Secured Debt Documents, regardless of any intermediate payment or discharge in whole or in part.

(c) If any discharge, release or arrangement (whether in respect of the obligations of any Grantor or any security for those obligations or otherwise) is made by a Secured Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of the Guarantors under this Section 5.01 will continue or be reinstated as if the discharge, release or arrangement had not occurred.

 

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(d) The obligations of each Guarantor under this Section 5.01 will not be affected by any act, omission, matter or thing which, but for this Section 5.01(d), would reduce, release or prejudice any of its obligations under this Section 5.01 (without limitation and whether or not known to it or any Secured Party) including:

(i) any time, waiver or consent granted to, or composition with, any Grantor or any other Person;

(ii) the release of any Grantor or any other Person under the terms of any composition or arrangement with any creditor of any other Person;

(iii) the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Grantor or any other Person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;

(iv) any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of any Grantor or any other Person;

(v) any amendment, novation, supplement, extension (whether of maturity or otherwise) or restatement (in each case however fundamental and of whatsoever nature, and whether or not more onerous) or replacement of any Secured Debt Document or any other document or security;

(vi) any unenforceability, illegality or invalidity of any obligation of any Person under any Secured Debt Document or any other document or security; or

(vii) any insolvency or similar proceedings.

(e) Without prejudice to the generality of Section 5.01(d), each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental and of whatsoever nature and whether or not more onerous) variation, increase, extension or addition of or to any of the obligations guaranteed hereby (whether due to any (however fundamental and of whatsoever nature and whether or not more onerous) variation, increase, extension or addition of or to the Secured Debt Documents and/or any facility or amount made available under any of the Secured Debt Documents for any reasons, including any fees, costs and/or expenses associated with any of the foregoing).

(f) Each Guarantor waives any right it may have of first requiring any Secured Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any Person before claiming from that Guarantor under this Section 5.01. This waiver applies irrespective of any Law or any provision of a Secured Debt Document to the contrary.

(g) Until the Discharge of Secured Obligations, each Secured Party (or any trustee or agent on its behalf) may:

 

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(i) refrain from applying or enforcing any other moneys, security or rights held or received by that Secured Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise), and no Guarantor shall be entitled to the benefit of the same; and

(ii) hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantor’s liability under this Section 5.01.

(h) Until the Discharge of Secured Obligations and unless the Security Trustee otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Secured Debt Documents or by reason of any amount being payable, or liability arising, under this 5.01:

(i) to be indemnified by any Grantor;

(ii) to claim any contribution from any other guarantor of any Grantor’s obligations under the Secured Debt Documents;

(iii) to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Secured Parties under the Secured Debt Documents or of any other guarantee or security taken pursuant to, or in connection with, the Secured Debt Documents by any Secured Party;

(iv) to bring legal or other proceedings for an order requiring the Borrower to make any payment, or perform any obligation, in respect of which any Guarantor has given a guarantee, undertaking or indemnity under Section 5.01;

(v) to exercise any right of set-off against any Grantor; and/or

(i) to claim or prove as a creditor of any Grantor in competition with any Secured Party.

If a Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Secured Parties by the Borrower under or in connection with the Secured Debt Documents to be repaid in full on trust for the Secured Parties and shall promptly pay or transfer the same to the Security Trustee or as the Security Trustee may direct for application in accordance with Section 4.02.

(j) The guarantee under this Section 5.01 is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Secured Party.

 

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(k) Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Grantor to honor all of its obligations under this Guarantee in respect of Hedging Obligations (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section 5.01(k) for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 5.01(k), or otherwise under this Guarantee, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Guarantor under this Section shall remain in full force and effect until Hedging Obligations have been paid in full. Each Qualified ECP Guarantor intends that this Section 5.01(k) constitute, and this Section 5.01(k) shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Grantor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

SECTION 5.02. Subordination. Each of the Subordinated Parties hereby undertakes in favor of the Secured Parties that its rights and claims under, in and to the Subordinated Agreements and the other Secured Debt Documents are, and shall at all times until the Discharge of Secured Obligations has occurred, be fully subject and subordinated to the rights and claims of the Secured Parties in, to and under this Agreement, the Secured Debt Documents and any loans or other amounts advanced thereunder, and that no amounts shall be payable to it under the Subordinated Agreements, this Agreement or the Secured Debt Documents otherwise than in accordance with the terms of this Agreement until the Discharge of Secured Obligations has occurred.

(b) Each of the Subordinated Parties hereby undertakes in favor of the Secured Parties that unless and until the Discharge of Secured Obligations has occurred, it will not:

(i) accelerate any Subordinated Agreements or any Indebtedness thereunder;

(ii) exercise any rights it may have by reason of (a) performance by it of its obligations under any Subordinated Agreement, or (b) the failure of any party to perform its obligations under any Subordinated Agreement, or (c) any amount being payable or any liability arising under any Subordinated Agreements, to:

(1) be indemnified by a Grantor;

(2) claim any contribution from any guarantor of any Grantor’s obligations under the Subordinated Agreements;

(3) take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of any of the Secured Parties under the Secured Debt Documents or of any other guarantee or security taken pursuant to, or in connection with, the Secured Debt Documents by any Secured Party;

(4) bring legal or other proceedings for an order requiring any Grantor to make any payment, or perform any obligation, in respect of which any Grantor has given a guarantee, undertaking or indemnity under any Subordinated Agreement;

(5) except in connection with the initial transfer of any Collateral Vessel to a Vessel Owner, exercise any right of set-off against any Grantor, provided that the Borrower and each Vessel Owner may from time to time set-off intercompany receivables and payables between the Borrower and a Vessel Owner or between two Vessel Owners in the ordinary course of business; or

 

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(6) claim or prove as a creditor of any Grantor in competition with any Secured Party.

(c) The Borrower and each of the Subordinated Parties covenant in favor of the Security Trustee that they shall not, without prior written consent of the Security Trustee, assign or transfer any rights or obligations under the Secured Debt Documents, the Subordinated Agreements or this Agreement otherwise than as permitted by, and in accordance with, this Agreement and the other Secured Debt Documents.

(d) Neither the Borrower, nor any of the Subordinated Parties will, until the Discharge of Secured Obligations has occurred (other than with the prior written consent of the Security Trustee) enter into any agreement, document or arrangement with any Person or do any other act or thing which would or could reasonably be expected to lead to the priority or effectiveness of the subordination arrangements provided in this Agreement being avoided, set aside, adjusted or held invalid.

(e) The subordination effected by, and the obligations of each Subordinated Party under this Agreement, will not be affected by any act, omission, matter or thing which, but for this provision, would reduce, release, prejudice or otherwise exonerate all or any of the Subordinated Parties from their respective obligations under this Agreement or affect such obligations including and whether or not known by any Subordinated Party or any other Person (a) any Lien or right of the Secured Parties in respect of the Secured Obligations, (b) any time, waiver or consent granted to, or composition with any Grantor or any other Person, (c) the release of any Grantor or any other Person under the terms of any composition or arrangement with any creditor, (d) the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Grantor or other Person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realize the full value of any Collateral, (e) any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of any Grantor or any Subordinated Party or any other Person, (f) any amendment, novation, supplement, extension (whether of maturity or otherwise) or restatement (in each case however fundamental and of whatsoever nature and whether or not more onerous) or replacement of a Secured Debt Document or any other document or security (including any change in the purpose of, any extension of, or any variation or increase in any facility or amount made available under any facility or the addition of any new facility under any Secured Debt Document or other document or security), (g) any unenforceability, illegality or invalidity of any obligation of any Obligor or any Subordinated Party or of any other Person under any Secured Debt Document or any other document or security; or (h) any insolvency or similar proceedings.

(f) The Security Trustee has no duty (contractual, fiduciary or otherwise) to any Subordinated Parties and any other Grantor under this Agreement or any other Secured Debt Documents.

 

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(g) If, at any time, any Grantor (other than the Primary Guarantor) owes or is liable for any amount to any Person Controlled by the Primary Guarantor, the Borrower shall (i) procure that such Person enters into an agreement with the Security Trustee (for the benefit of the Secured Parties) on terms substantially the same as those set out in this Section 5.02 and otherwise on terms acceptable to the Security Trustee, and (ii) provides such documents and evidence in relation to the due authorization and execution thereof and the validity and enforceability of such agreement as the Security Trustee may reasonably require, in each case, prior to the incurrence thereof. This provision is without prejudice to any restriction or limitation in respect of amounts owing by, or liabilities of, the Grantors set out in any Secured Debt Document.

ARTICLE VI

Immunities of the Security Trustee

SECTION 6.01. No Implied Duty. The Security Trustee will not have any fiduciary duties nor will it have responsibilities or obligations other than those expressly assumed by it in this Agreement and the other Collateral Documents to which it is a party, and no implied covenants or obligations shall be read into this Agreement or any such other Collateral Documents against the Security Trustee. The Security Trustee will not be required to take any action that is contrary to applicable law or any provision of this Agreement or the other Collateral Documents.

SECTION 6.02. Appointment of Agents and Advisors. The Security Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, accountants, appraisers or other experts or advisors selected by it in good faith as it may reasonably require and will not be responsible for any willful misconduct or negligence on the part of any of them.

SECTION 6.03. Other Agreements. The Security Trustee has accepted and is bound by the Collateral Documents executed by it prior to or as of the date of this Agreement and, subject to Section 6.10, as directed by an Act of Required Debtholders, or promptly upon receipt of any Collateral Document in connection with any additional assets pledged as Collateral, the Security Trustee shall execute additional Collateral Documents delivered to it after the date of this Agreement; provided, however, that such additional Collateral Documents do not adversely affect the rights, privileges, benefits and immunities of the Security Trustee. The Security Trustee will not otherwise be bound by, or be held obligated by, the provisions of any credit agreement, note purchase agreement, indenture or other agreement governing Secured Obligations (other than this Agreement, and the other Collateral Documents to which it is a party, including any Collateral Documents executed by the Security Trustee in connection with any Additional Secured Debt entered into after the date of this Agreement).

SECTION 6.04. Solicitation of Instructions. The Security Trustee may at any time solicit written confirmatory instructions, in the form of an Act of Required Debtholders, an order of a court of competent jurisdiction, an opinion of counsel, or certificates, as to any action that it may be requested or required to take, or that it may propose to take, in the performance of any of its obligations under this Agreement or the other Collateral Documents.

(b) No written direction given to the Security Trustee by an Act of Required Debtholders that in the sole judgment of the Security Trustee imposes, purports to impose or might reasonably be expected to impose upon the Security Trustee any obligation not expressly set forth in this Agreement and the other Collateral Documents to which it is a party, would result in the incurrence of liability by the Security Trustee or would be in violation of any applicable law, rule or regulation pertaining thereto, will be binding upon the Security Trustee as applicable, unless the Security Trustee, elects, at its sole option, to accept such direction.

 

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SECTION 6.05. Limitation of Liability. The Security Trustee will not be responsible or liable for any action taken or omitted to be taken by it hereunder or under any other Collateral Document, except for its own gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction. In no event shall the Security Trustee be liable under or in connection with this Agreement or any of the Collateral Documents for indirect, special, incidental, punitive or consequential losses or damages of any kind whatsoever, including but not limited to lost profits, whether or not foreseeable, even if the Security Trustee has been advised of the possibility thereof and regardless of the form of action in which such damages are sought.

SECTION 6.06. Documents in Satisfactory Form. The Security Trustee will be entitled to require that all agreements, certificates, opinions, instruments and other documents at any time submitted to it, including those expressly provided for in this Agreement, be delivered to it in a form and with substantive provisions reasonably satisfactory to it.

SECTION 6.07. Entitled to Rely. The Security Trustee may seek and rely upon, and shall be fully protected in relying upon, any Act of Required Debtholders, any judicial order or judgment, upon any advice, opinion, certificate or statement of legal counsel, independent consultants and other experts selected by it in good faith and upon any certification, instruction, notice or other writing delivered to it by the Borrower in compliance with the provisions of this Agreement or delivered to it by any Secured Lien Representative as to the holders of Secured Obligations for whom it acts, without being required to determine the authenticity thereof or the correctness of any fact stated therein or the propriety or validity of service thereof. The Security Trustee may act in reliance upon any instrument, including on any Act of Required Debtholders, purporting to comply with the provisions of this Agreement or any signature believed by it to be genuine and may assume that any Person purporting to give notice or receipt or advice or make any statement or execute any document in connection with the provisions hereof or the other Collateral Documents has been duly authorized to do so. The Security Trustee shall not have any responsibility to make any investigation into the facts or matters stated in any certification, instruction, notice or other writing furnished to it. To the extent an opinion of counsel is required or permitted under this Agreement to be delivered to the Security Trustee in respect of any matter, it may rely conclusively on the opinion of counsel as to such matter and such opinion of counsel shall be full warranty and protection to it for any action taken, suffered or omitted by it under the provisions of this Agreement and the other Collateral Documents.

SECTION 6.08. Secured Debt Default. The Security Trustee will not be required to inquire as to the occurrence or absence of any Secured Debt Default and will not be affected by or required to act upon any notice or knowledge as to the occurrence of any Secured Debt Default unless and until the Security Trustee is directed by an Act of Required Debtholders.

 

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SECTION 6.09. Actions by Security Trustee . As to any matter not expressly provided for by this Agreement or the other Collateral Documents, the Security Trustee will act or refrain from acting only as directed by an Act of Required Debtholders and will be fully protected if it does so, and any action taken, suffered or omitted pursuant hereto or thereto shall be binding on the holders of Secured Obligations, each Grantor, guarantor and each other party to the Collateral Documents. Notwithstanding the foregoing, the Security Trustee shall not be required to take any action which is contrary to the provisions hereof, the Secured Debt Documents or applicable law.

SECTION 6.10. Security or Indemnity in Favor of the Security Trustee. The Security Trustee will not be required to advance or expend any funds or otherwise incur any financial liability in the performance of its duties or the exercise of its powers or rights hereunder unless it has been provided with security or indemnity satisfactory to it against any and all liability or expense which may be incurred by it by reason of taking or continuing to take such action. The Grantors shall furnish the Security Trustee with security and indemnity satisfactory to the Security Trustee for any costs or expenses which may be incurred by the Security Trustee in undertaking any obligation to institute or take action, suit or legal proceeding or to take any other action.

SECTION 6.11. Rights of the Security Trustee. In the event of any conflict between any terms and provisions set forth in this Agreement and those set forth in any other Collateral Document, the terms and provisions of this Agreement shall supersede and control the terms and provisions of such other Collateral Document, except as expressly provided that a term or provision of a Collateral Document shall govern. In the event there is any bona fide, good faith disagreement between the other parties to this Agreement or any of the other Collateral Documents resulting in adverse claims being made in connection with Collateral held by the Security Trustee and the terms of this Agreement or any of the other Collateral Documents do not unambiguously mandate the action the Security Trustee is to take or not to take in connection therewith under the circumstances then existing, or the Security Trustee is in doubt as to what action it is required to take or not to take hereunder or under the other Collateral Documents, it will be entitled to refrain from taking any action (and will incur no liability for doing so) until directed otherwise in writing by a request signed jointly by the parties hereto entitled to give such direction or by order of a court of competent jurisdiction.

Furthermore, and notwithstanding anything herein or the other Collateral Documents to the contrary:

(a) The Security Trustee may execute any of the powers hereunder or perform any duties under this Agreement either directly or by or through agents, including financial advisors, separate trustees or attorneys or a custodian or nominee, and the Security Trustee shall not be responsible for any misconduct or negligence on the part of, or for the supervision of, any such agent, attorney, custodian or nominee appointed with due care by it hereunder.

(b) The Security Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement, or to institute, conduct or defend any litigation under this Agreement or in relation hereto or thereto, at the request, order or direction of any of the Secured Parties, pursuant to the provisions of this Agreement, unless such Secured Party shall have offered to the Security Trustee security or indemnity reasonably satisfactory to it against the costs, expenses and liabilities which may be incurred therein or thereby.

 

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(c) The Security Trustee shall not be required to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if there is reasonable ground for believing that the repayment of such funds or indemnity reasonably satisfactory to it against such risk or liability is not reasonably assured to it, and none of the provisions contained in this Agreement shall in any event require the Security Trustee to perform, or be responsible or liable for the manner of performance of, any obligations of the Borrower or the other Representatives, under the Collateral Documents.

(d) The Security Trustee shall not be charged with knowledge of any event or information including, but not limited to, an Event of Default unless an officer of the Security Trustee obtains actual knowledge of such event or information in the course of performing its obligations hereunder or the Security Trustee receives written notice of such event as provided herein.

(e) The Security Trustee shall not be required to take any action not in accordance with applicable law, and shall not be liable for any action that it omits to take in good faith that it reasonably believes (based on the advice of counsel) is not in accordance with applicable law.

SECTION 6.12. Limitations on Duty of Security Trustee in Respect of Collateral. Beyond the exercise of reasonable care in the custody of Collateral in its possession and as otherwise required by the UCC, the Security Trustee will not have any duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto and the Security Trustee will not be responsible for filing or registering any financing or continuation statements or any application for the renewal of a registration or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any Liens on the Collateral. The Security Trustee will be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property.

(b) Notwithstanding any other provision herein, the Security Trustee will not be responsible (i) for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on its part hereunder, except to the extent such action or omission constitutes gross negligence, bad faith or willful misconduct on the part of it, (ii) for the validity or sufficiency of the Collateral, this Agreement or any agreement or assignment contained herein or therein, (iii) for any recitals, statements, representations or warranties by the Grantors contained in this Agreement, the Secured Debt Documents, or any certificate or other document delivered by the Grantors or any Holders thereunder, (iv) for the performance or observance by the Grantors of any of their respective agreements contained herein or in any of the Secured Debt Documents, or (v) for the validity of the title of the Borrower or any other Grantor to the Collateral, for insuring the Collateral or for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral. The Security Trustee hereby disclaims any representation or warranty to the present and future holders of the Secured Obligations concerning the perfection of the Liens granted hereunder or in the value of any of the Collateral.

 

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SECTION 6.13. Assumption of Rights, Not Assumption of Duties. Notwithstanding anything to the contrary contained herein:

(i) each of the parties thereto will remain liable under each of the Collateral Documents (other than this Agreement) to the extent set forth therein to perform all of their respective duties and obligations thereunder to the same extent as if this Agreement had not been executed;

(ii) the exercise by the Security Trustee of any of its rights, remedies or powers hereunder will not release such parties from any of their respective duties or obligations under the other Collateral Documents; and

(iii) the Security Trustee will not be obligated to perform any of the obligations or duties of any of the parties thereunder other than those of the Security Trustee.

(iv) the permissive rights of the Security Trustee to do things enumerated in this Agreement and any other Collateral Documents to which it is a party shall not be construed as duties.

SECTION 6.14. No Liability for Clean-up of Hazardous Materials. In the event that any of the Security Trustee is required to acquire title to an asset for any reason, or take any managerial action of any kind in regard thereto, in order to carry out any obligation for the benefit of another, which in its sole and reasonable discretion may cause it to be considered an “owner or operator” under any environmental laws or otherwise cause it to incur, or be exposed to, any environmental liability or any liability under any other federal, state or local law, it reserves the right, instead of taking such action, either to resign as Security Trustee, or to arrange for the transfer of the title or control of the asset to a court appointed receiver. The Security Trustee will not be liable to any Person for any environmental liability or any environmental claims or contribution actions under any federal, state or local law, rule or regulation by reason of its actions and conduct as authorized, empowered and directed hereunder or relating to any kind of discharge or release or threatened discharge or release of any hazardous materials into the environment.

SECTION 6.15. No Liability for Delay in Performance. Notwithstanding any provision herein to the contrary, in no event shall the Security Trustee or any Secured Lien Representative be liable for any failure or delay in the performance of its obligations under this Agreement because of circumstances beyond its control, including, but not limited to, acts of God, flood, war (whether declared or undeclared), terrorism, fire, riot, strikes or work stoppages for any reason, embargo, government action, including any laws, ordinances, regulations or the like which restrict or prohibit the providing of the services contemplated by this Agreement, inability to obtain material, equipment, or communications or computer facilities, or the failure of equipment or interruption of communications or computer facilities, and other causes beyond its control whether or not of the same class or kind as specifically named above.

SECTION 6.16. Electronic Transmission. In respect of this Agreement, neither the Security Trustee nor any Secured Lien Representative shall have any duty or obligation to verify or confirm that the Person sending instructions, directions, reports, notices or other communications or information by electronic transmission is, in fact, a Person authorized to give such instructions, directions, reports, notices or other communications or information

 

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on behalf of the party purporting to send such electronic transmission; and neither the Security Trustee nor any Secured Lien Representative shall have any liability for any losses, liabilities, costs or expenses incurred or sustained by any party as a result of such reliance upon or compliance with such instructions, directions, reports, notices or other communications or information. Each other party agrees to assume all risks arising out of the use of electronic methods to submit instructions, directions, reports, notices or other communications or information to the Security Trustee or a Secured Lien Representative, as the case may be, including the risk of the Security Trustee or a Secured Lien Representative acting on unauthorized instructions, notices, reports or other communications or information, and the risk of interception and misuse by third parties.

ARTICLE VII

Resignation and Removal of the Security Trustee or Co-Security Trustee

SECTION 7.01. Resignation or Removal of Security Trustee. Subject to the appointment of a successor Security Trustee as provided in Section 7.02 and the acceptance of such appointment by the successor Security Trustee:

(a) the Security Trustee, may resign and be discharged from the Trust Estate at any time by giving not less than 30 days’ written notice of resignation to each Secured Lien Representative and the Borrower; and

(b) the Security Trustee, as the case may be, may be removed at any time, with or without cause, by an Act of Required Debtholders (with a copy delivered to the Borrower).

SECTION 7.02. Appointment of Successor Security Trustee. Upon any such resignation or removal, a successor Security Trustee, may be appointed by an Act of Required Debtholders (with the written consent of the Borrower, which consent shall not be unreasonably withheld and which consent shall not be required if a Secured Debt Default exists). If no successor Security Trustee, has been so appointed and accepted such appointment within 30 days after the predecessor Security Trustee, gave notice of resignation or was removed, the Borrower, at its option, may appoint a successor Security Trustee, or petition a court of competent jurisdiction for appointment of a successor Security Trustee, which must be a bank or trust company:

(i) authorized to exercise corporate trust powers;

(ii) having a combined capital and surplus of at least $500,000,000;

(iii) maintaining an office in New York, New York; and

(iv) that is not a Secured Lien Representative.

The retiring Security Trustee, will fulfill its obligations hereunder until a successor Security Trustee, meeting the requirements of this Section 7.02 has accepted its appointment as Security Trustee or Co-Security Trustee, as the case may be, and the provisions of Section 7.03 have been satisfied. Unless a successor Security Trustee shall have been so appointed and have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Security Trustee may petition any court of competent jurisdiction (at the Borrower’s expense) for the appointment of a successor Security Trustee, as applicable.

 

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SECTION 7.03. Succession. When the Person so appointed as successor Security Trustee, accepts such appointment:

(i) such Person will succeed to and become vested with all the rights, powers, privileges and duties of the predecessor Security Trustee, and the predecessor Security Trustee, will be discharged from its duties and obligations hereunder; and

(ii) the predecessor Security Trustee, will (at the expense of the Borrower and upon the payment of its charges) promptly transfer all Liens and collateral security and other property of the Trust Estate within its possession or control to the possession or control of the successor Security Trustee, and will execute instruments and assignments as may be necessary or desirable or reasonably requested by any successor Security Trustee, to transfer to the successor Security Trustee, all Liens, interests, rights, powers and remedies of the predecessor Security Trustee, in respect of the Collateral Documents or the Trust Estate.

Thereafter the predecessor Security Trustee, will remain entitled to enforce the immunities and indemnities granted to it in Article VI and the provisions of Sections 8.09 and 8.10.

SECTION 7.04. Merger, Conversion or Consolidation of Security Trustee. Any Person into which the Security Trustee, may be merged, amalgamated, combined or converted or with which it may be Consolidated, or any Person resulting from any merger, amalgamation, combination, conversion or consolidation to which the Security Trustee shall be a party, or any Person succeeding to the business of the Security Trustee, shall be the successor of the Security Trustee, pursuant to Section 7.03; provided that (i) without the execution or filing of any paper with any party hereto or any further act on the part of any of the parties hereto, except where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding, such Person satisfies the eligibility requirements specified in clauses (i) through (iv) of Section 7.02 and (ii) within 30 days of any such merger, amalgamation, combination, conversion or consolidation becoming effective, the successor Security Trustee, shall have notified the Borrower and each Secured Lien Representative thereof in writing.

ARTICLE VIII

Miscellaneous Provisions

SECTION 8.01. Amendment. (a) No amendment or supplement to the provisions of any Collateral Document will be effective without the approval of the Borrower, the Primary Guarantor and the Security Trustee acting as directed by an Act of Required Debtholders, except that:

(i) any amendment or supplement that has the effect solely of:

(A) adding or maintaining Collateral, securing Additional Secured Debt that was otherwise permitted by the terms of the Secured Debt Documents to be secured by the Collateral or preserving, perfecting or establishing the priority of the Liens therein;

 

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(B) releasing Liens in favor of the Security Trustee in accordance with Section 3.09(a) or otherwise in accordance with the terms of the Collateral Documents;

(C) curing any ambiguity, omission, mistake, defect or inconsistency; or

(D) making any change that would provide any additional rights or benefits to the Secured Parties or the Security Trustee or that does not adversely affect the rights under the Secured Debt Documents, any Secured Party or the Security Trustee,

will, in each case, become effective when executed and delivered by the applicable Grantors party thereto and the Security Trustee;

(ii) no amendment or supplement that reduces, impairs or adversely affects the right of any holder of Secured Obligations to:

(A) vote its outstanding Secured Obligations as to any matter described as subject to an Act of Required Debtholders (or amends the provisions of this clause (ii) or the definition of “Act of Required Debtholders”);

(B) share in the order of application of proceeds described in Section 4.02 or 4.03; or

(C) require that Liens securing Secured Obligations be released only as set forth in the provisions described in Sections 3.09(a).

will become effective without the execution and delivery by the applicable Grantors, the Borrower, the Primary Guarantor and the Security Trustee acting with the direction of the requisite percentage or number of holders of the Series of Secured Debt so affected under the applicable Secured Debt Document;

(iii) no amendment or supplement that imposes any obligation upon the Security Trustee or any Secured Lien Representative or adversely affects the rights of the Security Trustee or any Secured Lien Representative, respectively, in its capacity as such, will become effective without the consent of the Borrower and the Primary Guarantor and the Security Trustee or such Secured Lien Representative, respectively; and

 

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(iv) no amendment or supplement that either (A) imposes any obligation upon any Hedge Counterparty or (B) has the effect of changing the position or priority of any Hedge Counterparty in the application of payments as set out in Section 4.02 or changing the entitlement of any Hedge Counterparty to share in the Collateral and/or its interest therein, will become effective without the consent of the Borrower and the Primary Guarantor and the Security Trustee and each Hedge Counterparty which is, or an Affiliate of which is, a lender, noteholder or equivalent under the Secured Debt Documents, respectively.

(b) Any amendment or supplement to the provisions of the Collateral Documents that releases Collateral will be effective only in accordance with the requirements set forth in the applicable Secured Debt Document and Section 8.01(a)(ii) above. Any amendment or supplement that results in all of the Security Trustee’s Liens upon the Collateral no longer securing the Secured Obligations, may only be effected in accordance with Section 3.09.

SECTION 8.02. Voting. (a) In connection with any matter under this Agreement requiring a vote of holders of Secured Obligations, each Series of Secured Debt will cast its votes in accordance with the Secured Debt Documents governing such Series of Secured Debt. The Secured Obligations consisting of Hedging Obligations will not be considered for purposes of voting by holders of Secured Obligations under this Agreement unless the Discharge of Secured Obligations (other than Secured Obligations consisting of Hedging Obligations) has occurred. The amount of Secured Debt to be voted by a Series of Secured Debt will equal (i) the aggregate principal amount of such Series of Secured Debt (including the face amount of outstanding letters of credit whether or not then available or drawn), plus (ii) the aggregate unfunded commitments to extend credit which, when funded, would constitute Indebtedness of such Series of Secured Debt. Following and in accordance with the outcome of the applicable vote under its Secured Debt Documents, the Secured Lien Representative of each Series of Secured Debt will cast all of its votes under that Series of Secured Debt as a block in respect of any vote under this Agreement.

(b) For purposes of determining whether the holders of the requisite principal amount of Secured Obligations have taken any action as described in this Section 8.02, the principal amount for purposes of voting shall be the principal in U.S. dollars as of (i) if a record date has been set with respect to the taking of such action, such date or (ii) if no such record date has been set, the date of taking of such action by the holders of such Indebtedness.

(c) The Security Trustee has no obligation or duty to determine whether the vote of the requisite holders of the applicable Series of Secured Debt was obtained as required in this Section 8.02 or is required for any purpose hereof, or the sufficiency, validity or accuracy of any Act of Required Debtholders, but may instead rely on the vote cast by the Secured Lien Representative as described in Section 8.02(a) or an officer’s certificate from the Secured Lien Representatives.

SECTION 8.03. Further Assurances; Insurance. (a) Each of the Grantors will do or cause to be done all acts and things that may be required, or that the Security Trustee from time to time may reasonably request, to assure and confirm that the Security Trustee holds, for the benefit of the holders of Secured Obligations, duly created and enforceable and perfected Liens upon the Collateral, in each case, subject to and as contemplated by, and with the Lien priority required under, the Secured Debt Documents.

 

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(b) Promptly upon the reasonable request of the Security Trustee or any Secured Lien Representative at any time and from time to time, each of the Grantors will execute, acknowledge and deliver such Collateral Documents, instruments, certificates, notices and other documents, and take such other actions as shall be reasonably required under applicable law, or that the Security Trustee may reasonably request, in each case to create, perfect, protect, assure or enforce the Liens and benefits intended to be conferred, in each case subject to and as contemplated by the Secured Debt Documents for the benefit of the holders of Secured Obligations.

(c) Without limiting the foregoing, substantially concurrently with the Borrower’s designation of any asset as Collateral, the Borrower will record and deliver copies to the Security Trustee for the benefit of the holders of Secured Obligations of such UCC financing statements or applications for registration, and continuation statements or applications for the renewal of registrations relating thereto, that reasonably describe the Collateral or take such other actions as, in each case under this clause (c), shall be necessary or (in the reasonable opinion of the Security Trustee) desirable to create, grant, establish, perfect and protect the Security Trustee’s security interest in such assets or property for the benefit of the current and future holders of the Secured Obligations.

(d) The Borrower will maintain insurance in accordance with the terms and provisions of the Secured Debt Documents.

(e) Each Grantor irrevocably makes, constitutes and appoints the Security Trustee (and all officers, employees or agents designated by the Security Trustee) as such Grantor’s true and lawful agent (and attorney-in-fact) for the purpose, during the continuance of an Event of Default, of making, settling and adjusting claims in respect of Collateral under policies of insurance, endorsing the name of such Grantor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and for making all determinations and decisions with respect thereto. In the event that any Grantor at any time or times shall fail to obtain or maintain any of the policies of insurance required hereby or to pay any premium in whole or part relating thereto, the Security Trustee may, without waiving or releasing any obligation or liability of the Grantors hereunder or any Event of Default, in its sole discretion, obtain and maintain such policies of insurance and pay such premium and take any other actions with respect thereto as the Security Trustee deems advisable. All sums disbursed by the Security Trustee in connection with this paragraph, including reasonable attorneys’ fees, court costs, expenses and other charges relating thereto, shall be payable, upon demand, by the Grantors to the Security Trustee and shall be additional obligations secured hereby.

SECTION 8.04. Successors and Assigns. (a) Except as provided in Section 5.02, the Security Trustee may not, in its capacity as such, delegate any of its duties or assign any of its rights hereunder, and any attempted delegation or assignment of any such duties or rights will be null and void. All obligations of the Security Trustee hereunder will inure to the sole and exclusive benefit of, and be enforceable by, each Secured Lien Representative and each present and future holder of Secured Obligations, each of whom will be entitled to enforce this Agreement as a third-party beneficiary hereof, and all of their respective permitted successors and assigns.

(b) The Grantor may not delegate any of its duties or assign any of its rights hereunder, and any attempted delegation or assignment of any such duties or rights in contravention of the terms and conditions of the Secured Debt Documents will be null and void. All obligations of the Grantors hereunder will inure to the sole and exclusive benefit of, and be enforceable by, the Security Trustee, each Secured Lien Representative and each present and future holder of Secured Obligations, each of whom will be entitled to enforce this Agreement as a third-party beneficiary hereof, and all of their respective permitted successors and assigns.

 

42


SECTION 8.05. Delay and Waiver. No failure to exercise, no course of dealing with respect to the exercise of, and no delay in exercising, any right, power or remedy arising under this Agreement or any of the other Collateral Documents will impair any such right, power or remedy or operate as a waiver thereof. No single or partial exercise of any such right, power or remedy will preclude any other or future exercise thereof or the exercise of any other right, power or remedy. The remedies herein are cumulative and are not exclusive of any remedies provided by law.

SECTION 8.06. Notices. Any communications, including notices and instructions, between the parties hereto or notices provided herein to be given shall be given in writing and to the following addresses:

If to the Security Trustee:

UMB Bank, N.A.

6440 S. Millrock Drive, Suite 400

Salt Lake City, UT 84121

Attention: Corporate Trusts – Aviation

Facsimile No.: (816)-860-3025

Telephone:         (385) 715-3026

Email:                 corptrustutah@umb.com; heather.cottle@umb.com

If to the Borrower or any other Grantor:

Unit 2, 16/F., W668 Building,

Nos. 668 Castle, Peak Road,

Cheung Sha Wan,

Kowloon, Hong Kong, China

Fax:                     +852 3010 1868

Telephone:           +852 3588 9400

Email: gtalbot@atlascorporation.com; legal@seaspanltd.ca

Attention: Chief Financial Officer

If to the Administrative Agent:

Citibank, N.A.

1615 Brett Road

OPS III

New Castle, DE 19720

USA

Fax:                     (646) 274-5080

Attention:             Agency Operations

 

43


and, if to any other Secured Lien Representative, to such address as it may specify by written notice to the parties named above.

Unless otherwise specified herein, all notices, requests, demands, instructions, directions or other communications given to the Borrower, the Security Trustee and any Secured Lien Representative shall be given in writing (including, but not limited to, facsimile transmission followed by telephonic confirmation or similar writing) and shall be effective (i) if given by facsimile transmission, when such facsimile is transmitted to the facsimile number (if any) specified in this Section 8.06 and the appropriate facsimile confirmation is received (unless the recipient has provided notice that its offices are temporarily closed and/or its facsimile machines are unattended, in which case notice shall be given by a different method), (ii) if given by certified, registered, priority or express mail, return receipt requested, with postage prepaid, addressed as aforesaid, upon receipt or refusal to accept delivery, (iii) if given by a nationally recognized overnight carrier, upon receipt or refusal to accept delivery, (iv) by email to the email address (if any) provided as aforesaid with email confirmation of such email being “read” or reply email from recipient evidencing receipt, or (v) if given by any other means, when delivered at the address specified in this Section 8.06.

SECTION 8.07. Notice Following Discharge of Secured Obligations. Promptly following the Discharge of Secured Obligations with respect to one or more Series of Secured Debt, each Secured Lien Representative with respect to each applicable Series of Secured Debt that is so discharged will provide written notice of such discharge to the Security Trustee and to each other Secured Lien Representative.

SECTION 8.08. Entire Agreement. This Agreement states the complete agreement of the parties relating to the undertaking of the Security Trustee set forth herein and supersedes all oral negotiations and prior writings in respect of such undertaking.

SECTION 8.09. Compensation; Expenses. The Borrower agrees to pay such compensation to each of the Security Trustee and its agents and attorneys as and when the Borrower and the Security Trustee may agree in writing from time to time. In addition, the Borrower agrees to pay within 15 days after receipt of written demand therefor, including documentation reasonably supporting such demand (without duplication):

(i) all reasonable and documented costs and out-of-pocket expenses incurred by the Security Trustee and its agents in connection with the negotiation, preparation, execution, delivery, filing, registration, recordation or administration of this Agreement or any other Collateral Document or any consent, amendment, waiver or other modification relating hereto or thereto;

(ii) all reasonable and documented fees, out-of-pocket expenses and disbursements of the Security Trustee’s legal counsel engaged by the Security Trustee or any Secured Lien Representative incurred in connection with the negotiation, preparation, closing, administration or performance of or exercise of rights under this Agreement and the other Collateral Documents or any consent, amendment, waiver or other modification relating hereto or thereto and any other document or matter requested by the Borrower;

(iii) all reasonable and documented costs and out-of-pocket expenses incurred by the Security Trustee and its agents in creating, perfecting, preserving or releasing the Security Trustee’s Liens on the Collateral under the Collateral Documents, including filing, registration and recording fees, expenses and taxes, stamp or documentary taxes, search fees, and title insurance premiums; and

 

44


(iv) after the occurrence and during the continuance of any Secured Debt Default, all reasonable and documented costs and out-of-pocket expenses incurred by the Security Trustee, their agents and any Secured Lien Representative in connection with the preservation, collection, foreclosure or enforcement of the Collateral subject to the Collateral Documents or any interest, right, power or remedy of the Security Trustee or in connection with the collection or enforcement of any of the Secured Obligations or the proof, protection, administration or resolution of any claim based upon the Secured Obligations in any Insolvency or Liquidation Proceeding, including all reasonable and documented fees and disbursements of attorneys, accountants, auditors, consultants, appraisers and other professionals engaged by the Security Trustee, its agents or the Secured Lien Representatives. The agreements in this Section 8.09 will survive repayment of all Secured Obligations, the termination of any Collateral Document and the removal or resignation of the Security Trustee.

The amounts above shall include all reasonable and documented costs and out-of-pocket expenses of attorneys of the Security Trustee, provided that, save where clause (iv) applies, such costs and out-of-pocket expenses of attorneys of the Security Trustee shall include the documented fees, charges and disbursements of one counsel for the Security Trustee and one additional counsel in any applicable local jurisdiction, one counsel for each Secured Lien Representative and, in each case, such other counsel as may be agreed with the Borrower.

SECTION 8.10. Indemnity. (a) The Borrower agrees to defend, indemnify, pay and hold harmless each of the Secured Lien Representative, the Security Trustee, each Secured Party and each of their Affiliates and each of their directors, officers, partners, trustees, employees (legal and contractual), attorneys and agents, and (in each case) their respective heirs, representatives, successors and assigns (each of the foregoing, an “Indemnitee”) from and against any and all Indemnified Liabilities; provided, no Indemnitee will be entitled to indemnification hereunder with respect to any Indemnified Liability to the extent such Indemnified Liability is found by a final and non-appealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Indemnitee.

(b) All amounts due under this Section 8.10 will be payable within 15 days of demand.

(c) The agreements in this Section 8.10 will survive repayment of all Secured Obligations and the removal or resignation of the Security Trustee or the Co-Security Trustee.

SECTION 8.11. New Grantor Parties. (a) The Borrower shall procure that each entity that is or becomes a Vessel Owner in respect of a Collateral Vessel shall accede to this Agreement on or before the date on which it acquires any interest in the Collateral Vessel by executing and delivering to the Security Trustee an Intercreditor Joinder (Grantor) confirming, amongst other things, that it is Grantor and a Guarantor.

SECTION 8.12. Severability. If any provision of this Agreement is invalid, illegal or unenforceable in any respect or in any jurisdiction, the validity, legality and enforceability of such provision in all other respects and of all remaining provisions, and of such provision in all other jurisdictions, will not in any way be affected or impaired thereby.

 

45


SECTION 8.13. Headings. Section headings herein have been inserted for convenience of reference only, are not to be considered a part of this Agreement and will in no way modify or restrict any of the terms or provisions hereof.

SECTION 8.14. Obligations Secured. All obligations of the Grantors set forth in or arising under this Agreement will be Secured Obligations and are secured by all Liens granted by the Collateral Documents.

SECTION 8.15. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS AGREEMENT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

SECTION 8.16. Consent to Jurisdiction. Subject as provided below, all judicial proceedings brought against any party hereto arising out of or relating to this Agreement or any of the other Collateral Documents shall be brought in any state or Federal court of competent jurisdiction in the State, County and City of New York, Borough of Manhattan. By executing and delivering this Agreement, each party to this Agreement, for itself and in connection with its properties irrevocably:

(i) accepts generally and unconditionally the exclusive jurisdiction and venue of such courts;

(ii) waives any defense of forum non conveniens to the extent permitted by applicable law;

(iii) agrees that service of all process in any such proceeding in any such court may be made by registered or certified mail, return receipt requested, to such party at its address provided in accordance with Section 8.05;

(iv) agrees that service as provided in clause (iii) above is sufficient to confer personal jurisdiction over such party in any such proceeding in any such court and otherwise constitutes effective and binding service in every respect; and

(v) agrees each party hereto retains the right to serve process in any other manner permitted by law or to bring proceedings against any party in the courts of any other jurisdiction.

Nothing in this Agreement or in any other Collateral Document shall restrict the Security Trustee from bringing any action or proceeding relating to this Agreement or any other Collateral Document against the Grantors or their properties in the courts of any jurisdiction.

SECTION 8.17. Waiver of Jury Trial. Each party to this Agreement irrevocably and unconditionally waives its rights to a jury trial of any claim or cause of action based upon or arising under this Agreement or any of the other Collateral Documents or any dealings between them relating to the subject matter of this Agreement or the intents and purposes of the other Collateral Documents. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this Agreement and the other Collateral Documents, including contract claims, tort claims, breach of duty claims and all other common law and statutory claims. Each party to this Agreement acknowledges that this waiver is a material inducement to enter into a business relationship, that each party hereto has already relied on this waiver in entering into this Agreement, and that each

 

46


party hereto will continue to rely on this waiver in its related future dealings. Each party hereto further warrants and represents that it has reviewed this waiver with its legal counsel and that it knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. This waiver is irrevocable, meaning that it may not be modified either orally or in writing (other than by a mutual written waiver specifically referring to this Section 8.17 and executed by each of the parties hereto), and this waiver will apply to any subsequent amendments, renewals, supplements or modifications of or to this Agreement or any of the other Collateral Documents or to any other documents or agreements relating thereto. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.

SECTION 8.18. Counterparts. This Agreement may be executed in any number of counterparts (including by facsimile), each of which when so executed and delivered will be deemed an original, but all such counterparts together will constitute but one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or electronic .pdf copy shall be effective as delivery of a manually executed counterpart of this Agreement.

SECTION 8.19. Effectiveness. This Agreement will become effective upon the execution of a counterpart hereof by each of the parties hereto and receipt by each party of written notification of such execution and written or telephonic authorization of delivery thereof.

SECTION 8.20. Continuing Nature of this Agreement. This Agreement, including the subordination provisions hereof, will be reinstated if at any time any payment or distribution in respect of any of the Secured Obligations is rescinded or must otherwise be returned in an Insolvency or Liquidation Proceeding or otherwise by any holder of Secured Obligations or Secured Lien Representative or any representative of any such party (whether by demand, settlement, litigation or otherwise).

SECTION 8.21. Insolvency. This Agreement will be applicable both before and after the commencement of any Insolvency or Liquidation Proceeding by or against the Borrower or any other Grantor. The relative rights, as provided for in this Agreement, will continue after the commencement of any such Insolvency or Liquidation Proceeding on the same basis as prior to the date of the commencement of any such case, as provided in this Agreement.

SECTION 8.22. Rights and Immunities of Secured Lien Representatives and Security Trustee. The Administrative Agent will be entitled to all of the rights, protections, immunities and indemnities set forth in the Loan Agreement (including, without limitation, Article VIII thereof) and any future Secured Lien Representative will be entitled to all of the rights, protections, immunities and indemnities set forth in the credit agreement, indenture or other agreement governing the applicable Secured Debt with respect to which such Person will act as representative.

It is expressly acknowledged and agreed to by the parties that: (a) this Agreement and each other Collateral Document is executed and delivered by UMB Bank, N.A., not in its individual capacity but solely as Security Trustee pursuant to this Agreement; (b) each of the representations, undertakings and agreements in this Agreement and the other Collateral Documents made on the part of the Security Trustee are made and intended not as personal representations, undertakings and agreements by UMB Bank, N.A., but are made and intended for the purpose of binding only the Security Trustee in its trust capacity; and (c) under no circumstances shall UMB Bank, N.A. be personally liable for the payment of any costs or expenses or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Security Trustee under this Agreement and the other Collateral Documents.

 

47


If the capacity of the Security Trustee as security trustee under this Agreement is not recognized under the applicable law of any jurisdiction, then the capacity of the Security Trustee as security trustee shall, for purposes of enforcement of this Agreement in such jurisdiction, be deemed to be replaced by the capacity of a security agent, and all references to “Security Trustee” in this Agreement shall be deemed references to “Security Agent” for such purposes; provided that all of the rights, powers, protections, immunities and indemnities of the Security Trustee set forth in this Agreement shall apply to the “Security Agent”, notwithstanding such designation.

SECTION 8.23. Amendment and Restatement.

(a) This Agreement shall be deemed to be an amendment to and restatement of the Initial Intercreditor Agreement, and the Initial Intercreditor Agreement as amended and restated hereby shall remain in full force and effect and is hereby ratified and confirmed in all respects. This Agreement is not intended to constitute, nor does it constitute, an interruption, suspension of continuity, satisfaction, discharge of prior duties, novation, or termination of the Initial Intercreditor Agreement or the liens, security interests, loans, guarantees, indemnities, liabilities, expenses, or obligations under the Initial Intercreditor Agreement, or the collateral thereunder. Each of the Obligors affirms its duties and obligations under the terms of the Initial Intercreditor Agreement (as amended and restated by this Agreement). This Agreement amends and restates the Initial Intercreditor Agreement in its entirety and any obligation thereunder shall be deemed to be outstanding under this Agreement. If there is a conflict between the Initial Intercreditor Agreement and this Agreement, this Agreement shall govern from and after the Restatement Date. Upon the Restatement Date, each reference to the Initial Intercreditor Agreement in any other Secured Debt Document or in any other document, instrument or agreement shall mean and be a reference to the Initial Intercreditor Agreement as amended and restated by this Agreement.

(b) Each Obligor hereby (i) expressly acknowledges the terms of this Agreement, (ii) ratifies and affirms its obligations under the Secured Debt Documents (including guarantees and security agreements) executed by such Obligor and (iii) acknowledges, renews and extends its continued liability under all such Secured Debt Documents and agrees such Secured Debt Documents remain in full force and effect, including with respect to the obligations of the Borrower as modified by this Agreement. Each Obligor further represents and warrants to each Secured Party that after giving effect to this Agreement, neither the modification of the Initial Intercreditor Agreement effected pursuant to this Agreement, nor the execution, delivery, performance or effectiveness of this Agreement (A) impairs the validity, effectiveness or priority of the Liens granted pursuant to any Secured Debt Document (as such term is defined in the Initial Intercreditor Agreement), and such Liens continue unimpaired with the same priority to secure repayment of all Obligations, whether heretofore or hereafter incurred; or (B) requires that any new filings be made or other action taken to perfect or to maintain the perfection of such Liens.

 

48


(c) Each Obligor hereby agrees, acknowledges and affirms that (i) each of the Secured Debt Documents to which it is a party shall remain in full force and effect and shall constitute security for all Obligations pursuant to the Initial Intercreditor Agreement as amended and restated hereby and the other Secured Debt Documents, and (ii) any reference to the Initial Intercreditor Agreement appearing in any such Secured Debt Document shall on and after the Restatement Date be deemed to refer to the Initial Intercreditor Agreement as amended and restated hereby. In furtherance of the foregoing, each Obligor hereby confirms the security interest in the Collateral granted by it in favor of the Security Trustee pursuant to each Collateral Document to which it is a party.

 

49


IN WITNESS WHEREOF, the parties hereto have caused this Intercreditor and Proceeds Agreement to be executed by their respective officers or representatives as of the day and year first above written.

 

The Borrower
SEASPAN HOLDCO III LTD.,
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President


The Primary Guarantor
SEASPAN CORPORATION,
By:  

/s/ Graham Talbot

Name: Graham Talbot
Title: Chief Financial Officer


Grantors
GC Intermodal I, Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
GC Intermodal IV, Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
GC Intermodal V, Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
GC Intermodal VI, Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
GC Intermodal IX, Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President


GC Intermodal X, Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
GC Intermodal XI, Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
GC Intermodal XV, Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
GC Intermodal XVI, Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
GC Intermodal XIX, Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President


GC Intermodal XX Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan 696C Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan 716C Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan 717C Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan 718C Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President


Seaspan 719C Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan 720C Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan 721C Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan 722C Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan 993 Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President


Seaspan 1105 Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan 1539 Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan 1540 Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan 1541 Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan 1542 Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President


Seaspan 1543 Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan 1550 Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan 1551 Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan 1552 Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan 1566 Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President


Seaspan 1568 Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan 1854 Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan 1855 Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan 2177 Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan 2180 Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President


Seaspan 2181 Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan 2638 Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan 2640 Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan 3278 Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan Containership S452 Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President


Seaspan Holdco XII Pte. Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan Holdco XIII Pte. Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan Holdco XIV Pte. Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan Holdco XV Pte. Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan Holdco XVI Pte. Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President


Seaspan Holdco XVII Pte. Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan YZJ 983 Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President
Seaspan YZJ 985 Ltd., as Guarantor
By:  

/s/ Bing Chen

Name: Bing Chen
Title: President


UMB BANK, NATIONAL ASSOCIATION, not in its individual capacity, but solely as Security Trustee,
By:  

/s/ Dillon Butler

Name: Dillon Butler
Title: Vice President


CITIBANK, N.A., as Administrative Agent under the Loan Agreement,
By:  

/s/ Marion O’Connor

Name: Marion O’Connor
Title: Senior Trust Officer

Exhibit 4.5

Execution Version

 

 

 

NOTE PURCHASE AGREEMENT

Dated May 21, 2021

by and among

SEASPAN HOLDCO III LTD.,

AS ISSUER,

SEASPAN CORPORATION,

AS GUARANTOR,

CITIBANK, N.A.,

AS NOTE ADMINISTRATIVE AGENT,

CITIBANK, N.A.,

AS REGISTRAR AND PAYING AGENT,

SOCIÉTÉ GÉNÉRALE, HONG KONG BRANCH,

AS LEAD SUSTAINABILITY COORDINATOR,

AND

THE PURCHASERS PARTY TO THIS AGREEMENT FROM TIME TO TIME

$500,000,000

3.91% Series A Senior Secured Notes due June 5, 2031

3.91% Series B Senior Secured Notes due June 5, 2031

4.06% Series C Senior Secured Notes due June 5, 2033

4.26% Series D Senior Secured Notes due June 5, 2036

 

 

 

 


TABLE OF CONTENTS

 

SECTION   HEADING    PAGE  

SECTION 1.

  AUTHORIZATION OF NOTES      1  

SECTION 2.

  SALE AND PURCHASE OF NOTES      2  

SECTION 3.

  CLOSING      2  

SECTION 4.

  CONDITIONS TO CLOSING      2  

Section 4.1.

  Financing Documents      2  

Section 4.2.

  Corporate Documents      3  

Section 4.3.

  “Know your customer”      3  

Section 4.4.

  Opinions of Counsel      4  

Section 4.5.

  Fees and Expenses      4  

Section 4.6.

  Representations and Warranties      4  

Section 4.7.

  No Default      4  

Section 4.8.

  Other Documents      4  

Section 4.9.

  Security; Guarantees; Lien Searches      4  

Section 4.10.

  Certificates      5  

Section 4.11.

  Management Agreement      5  

Section 4.12.

  Purchase Permitted By Applicable Law, Etc.      5  

Section 4.13.

  Sale of Other Notes      6  

Section 4.14.

  Private Placement Number      6  

Section 4.15.

  Changes in Corporate Structure      6  

Section 4.16.

  Funding Instructions      6  

Section 4.17.

  Ratings      6  

Section 4.18.

  Proceedings and Documents      6  

SECTION 5.

  REPRESENTATIONS AND WARRANTIES OF THE COMPANY      6  

Section 5.1.

  Status      7  

Section 5.2.

  Power and Authority      7  

Section 5.3.

  Legal Validity      7  

Section 5.4.

  Non-Conflict      7  

Section 5.5.

  No Default      7  

Section 5.6.

  Authorizations      7  

Section 5.7.

  Financial Statements      7  

Section 5.8.

  Disclosure      7  

Section 5.9.

  No Material Adverse Effect      8  

Section 5.10.

  Litigation      8  

Section 5.11.

  Ranking of Obligations      8  

Section 5.12.

  Taxes      8  

Section 5.13.

  Taxes on Payments      8  

Section 5.14.

  Stamp Duties      8  

Section 5.15.

  Environment      9  

 

i


Section 5.16.

  Security Interests      9  

Section 5.17.

  Security Assets      9  

Section 5.18.

  Collateral Vessel      9  

Section 5.19.

  ISM Code and ISPS Code compliance      9  

Section 5.20.

  Related Contracts      9  

Section 5.21.

  Money Laundering      9  

Section 5.22.

  Anti-Corruption and Sanctions      10  

Section 5.23.

  Compliance with Laws      10  

Section 5.24.

  Investment Company Act      10  

Section 5.25.

  Regulation T, U and X      11  

Section 5.26.

  Insolvency      11  

Section 5.27.

  Immunity      11  

Section 5.28.

  Private Offering by the Obligors      11  

Section 5.29.

  Jurisdiction and Governing Law      11  

Section 5.30.

  Accounts      12  

Section 5.31.

  Charters      12  

Section 5.32.

  Ownership      12  

Section 5.33.

  Use of Proceeds      12  

Section 5.34.

  Special Purpose Representations      12  

Section 5.35.

  Separateness      13  

Section 5.36.

  Beneficial Ownership Certification      14  

Section 5.37.

  Title to Property; Leases      14  

Section 5.38.

  Licenses, Permits, Etc.      15  

Section 5.39.

  Benefit Plan Compliance.      15  

Section 5.40.

  Existing and Future Indebtedness      16  

SECTION 6.

  REPRESENTATIONS OF THE PURCHASERS      16  

Section 6.1.

  Purchase for Investment      16  

Section 6.2.

  Accredited Investor      16  

Section 6.3.

  Source of Funds      16  

SECTION 7.

  INFORMATION AS TO COMPANY      18  

Section 7.1.

  Financial and Business Information      18  

Section 7.2.

  Compliance Certificate      20  

Section 7.3.

  Valuation      21  

Section 7.4.

  Visitation      21  

Section 7.5.

  Electronic Delivery      21  

Section 7.6.

  Limitation on Disclosure Obligation      22  

SECTION 8.

  PAYMENT AND PREPAYMENT OF THE NOTES      23  

Section 8.1.

  Payment at Maturity      23  

Section 8.2.

  Optional Prepayments with Make-Whole Amount      23  

Section 8.3.

  Prepayment for Tax Reasons      23  

Section 8.4.

  Mandatory Prepayments      24  

 

ii


Section 8.5.

  Allocation of Partial Prepayments      26  

Section 8.6.

  Maturity; Surrender, Etc.      27  

Section 8.7.

  Purchase of Notes      27  

Section 8.8.

  Make-Whole Amount      27  

Section 8.9.

  Payments Due on Non-Business Days      29  

SECTION 9.

  AFFIRMATIVE COVENANTS      29  

Section 9.1.

  Know Your Customer Checks      29  

Section 9.2.

  Authorizations      30  

Section 9.3.

  Compliance with laws      30  

Section 9.4.

  Pari passu ranking      30  

Section 9.5.

  Place of business      30  

Section 9.6.

  Security      30  

Section 9.7.

  Separateness Covenants      31  

Section 9.8.

  Registration of the Collateral Vessels      32  

Section 9.9.

  Classification and repair      32  

Section 9.10.

  Lawful and safe operation      34  

Section 9.11.

  Repair of the Collateral Vessels      34  

Section 9.12.

  Arrests and liabilities      34  

Section 9.13.

  Environment      35  

Section 9.14.

  Information regarding the Collateral Vessels      36  

Section 9.15.

  Provision of further information      37  

Section 9.16.

  Management      37  

Section 9.17.

  Charters      37  

Section 9.18.

  Termination of Eligible Charters      38  

Section 9.19.

  Scope of Obligatory Insurances      38  

Section 9.20.

  Obligatory Insurances      40  

Section 9.21.

  Power of Purchasers to Insure      41  

Section 9.22.

  ISM Code      42  

Section 9.23.

  ISPS Code      42  

Section 9.24.

  Dry Docking      43  

Section 9.25.

  Rating      43  

Section 9.26.

  Taxation      43  

Section 9.27.

  Guarantors      44  

Section 9.28.

  Decarbonization Certificate      44  

SECTION 10.

  NEGATIVE COVENANTS      46  

Section 10.1.

  Security Interests      46  

Section 10.2.

  Merger      46  

Section 10.3.

  Special Purpose Covenants      46  

Section 10.4.

  Payment of dividends      47  

Section 10.5.

  Vessel Substitutions      47  

Section 10.6.

  Vessel Dispositions and Removals      47  

Section 10.7.

  Year end      48  

Section 10.8.

  Related Contracts      48  

 

iii


Section 10.9.

  Financial Covenants      49  

Section 10.10.

  Creation of Additional Security      49  

Section 10.11.

  No Amendment to Related Contracts      50  

Section 10.12.

  Anti-Corruption Law      50  

Section 10.13.

  Sanctions      50  

Section 10.14.

  Additional Secured Debt      51  

SECTION 11.

  EVENTS OF DEFAULT      51  

SECTION 12.

  REMEDIES ON DEFAULT, ETC.      54  

Section 12.1.

  Acceleration      54  

Section 12.2.

  Other Remedies      54  

Section 12.3.

  Rescission      55  

Section 12.4.

  No Waivers or Election of Remedies, Expenses, Etc.      55  

SECTION 13.

  TAX INDEMNIFICATION; FATCA INFORMATION      55  

SECTION 14.

  REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES      59  

Section 14.1.

  Registration of Notes      59  

Section 14.2.

  Transfer and Exchange of Notes      59  

Section 14.3.

  Replacement of Notes      59  

Section 14.4.

  Registrar      60  

SECTION 15.

  PAYMENTS ON NOTES      60  

Section 15.1.

  Place of Payment      60  

Section 15.2.

  Payment by Wire Transfer      60  

SECTION 16.

  EXPENSES, ETC.      61  

Section 16.1.

  Transaction Expenses      61  

Section 16.2.

  Certain Taxes      62  

Section 16.3.

  Survival      62  

SECTION 17.

  SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT      62  

SECTION 18.

  AMENDMENT AND WAIVER      62  

Section 18.1.

  Requirements      62  

Section 18.2.

  Solicitation of Holders of Notes      63  

Section 18.3.

  Binding Effect, Etc.      64  

Section 18.4.

  Notes Held by Company, Etc.      64  

SECTION 19.

  NOTICES; ENGLISH LANGUAGE      64  

 

iv


SECTION 20.

  REPRODUCTION OF DOCUMENTS      65  

SECTION 21.

  CONFIDENTIAL INFORMATION      66  

SECTION 22.

  SUBSTITUTION OF PURCHASER      67  

SECTION 23.

  NOTE ADMINISTRATIVE AGENT AND SECURITY TRUSTEE      67  

Section 23.1.

  Appointment and Authority      67  

Section 23.2.

  Exculpatory Provisions      67  

Section 23.3.

  Reliance by Administrative Agent      69  

Section 23.4.

  Delegation of Duties      69  

Section 23.5.

  No Other Duties      69  

Section 23.6.

  Note Administrative Agent May File Proofs of Claim      69  

Section 23.7.

  Resignation and Removal of Note Administrative Agent      70  

Section 23.8.

  Intercreditor Agreement.      71  

Section 23.9.

  Non-Reliance.      71  

Section 23.10.

  No Advisory or Fiduciary Responsibility.      71  

Section 23.11.

  Security Trustee Appointment      72  

SECTION 24.

  MISCELLANEOUS      72  

Section 24.1.

  Successors and Assigns      72  

Section 24.2.

  Accounting Terms      72  

Section 24.3.

  Severability      72  

Section 24.4.

  Construction, Etc.      73  

Section 24.5.

  Counterparts      73  

Section 24.6.

  Governing Law      73  

Section 24.7.

  Jurisdiction and Process; Waiver of Jury Trial      73  

Section 24.8.

  Obligation to Make Payment in Dollars      74  

Section 24.9.

  Requisite Program Debt Consents      75  

 

v


SCHEDULE A

          Defined Terms

SCHEDULE A-1

          Concentration Limit Requirements

SCHEDULE A-2

          Identified Vessels

SCHEDULE A-3

          Form of Charter’s Undertaking

SCHEDULE A-4

          Decarbonization Certificate

SCHEDULE A-5

          IMO Decarbonization Trajectory

SCHEDULE 1.1

          Form of 3.91% Series A Senior Secured Note due June 5, 2031

SCHEDULE 1.2

          Form of 3.91% Series B Senior Secured Notes due June 5, 2031

SCHEDULE 1.3

          Form of 4.06% Series C Senior Secured Notes due June 5, 2033

SCHEDULE 1.4

          Form of 4.26% Series D Senior Secured Notes due June 5, 2036

SCHEDULE 4.4(A)(I)(A)

    

 
 
   Form of Opinion of Marshall Islands Special Counsel for the Obligors

SCHEDULE 4.4(A)(I)(F)

    

 
 
   Form of Opinion of New York Special Counsel for the Obligors

SCHEDULE 4.4(B)

          Form of Opinion of Special Counsel for the Purchasers

SCHEDULE 5.5

          Financial Statements

SCHEDULE 5.32

          Subsidiaries of the Company and Ownership of Subsidiary Stock

SCHEDULE 5.40

          Existing Indebtedness

SCHEDULE 7.2

          Form of Compliance Certificate

SCHEDULE 10.9

          Estimated add back related to vessel depreciation

PURCHASER SCHEDULE

          Information Relating to Purchasers

 

 

vi


SEASPAN HOLDCO III LTD.

3.91% Series A Senior Secured Notes due June 5, 2031

3.91% Series B Senior Secured Notes due June 5, 2031

4.06% Series C Senior Secured Notes due June 5, 2033

4.26% Series D Senior Secured Notes due June 5, 2036

May 21, 2021

TO EACH OF THE PURCHASERS LISTED IN

THE PURCHASER SCHEDULE HERETO:

Ladies and Gentlemen:

Seaspan Holdco III Ltd., a corporation organized and existing under the laws of the Republic of the Marshall Islands with limited liability (the “Company”), and Seaspan Corporation, a corporation organized and existing under the laws of the Republic of the Marshall Islands with limited liability (the “Guarantor”) agrees with each of the Purchasers, Citibank, N.A., as administrative agent in respect of the Notes for the limited purposes set forth herein (the “Note Administrative Agent”), Citibank, N.A., as initial Registrar and Paying Agent, and Société Générale, a public limited company incorporated in France, acting through its Hong Kong Branch, as sole sustainability coordinator (in such capacity, the “Lead Sustainability Coordinator”) as follows:

SECTION 1. AUTHORIZATION OF NOTES.

The Company will authorize the issue and sale of $500,000,000 aggregate principal amount of its Senior Secured Notes consisting of (a) $150,000,000 aggregate principal amount of its 3.91% Series A Senior Secured Notes due June 5, 2031 (the “Series A Notes”), (b) $50,000,000 aggregate principal amount of its 3.91% Series B Senior Secured Notes due June 5, 2031 (the “Series B Notes”), (c) $170,000,000 aggregate principal amount of its 4.06% Series C Senior Secured Notes due June 5, 2033 (the “Series C Notes”) and (d) $130,000,000 aggregate principal amount of its 4.26% Series D Senior Secured Notes due June 5, 2036 (the “Series D Notes” and together with the Series A Notes, Series B Notes and Series C Notes, as amended, restated or otherwise modified from time to time pursuant to Section 18 and including any such Notes issued in substitution therefor pursuant to Section 14, the “Notes”). The Notes of any Series shall be substantially in the form set out in Schedule 1 with respect to such Series. Certain capitalized and other terms used in this Agreement are defined in Schedule A and, for purposes of this Agreement, the rules of construction set forth in Section 24.4 shall govern.

 

1


SECTION 2. SALE AND PURCHASE OF NOTES.

Subject to the terms and conditions of this Agreement, the Company will issue and sell to each Purchaser and each Purchaser will purchase from the Company, at each Closing provided for in Section 3, Notes of the applicable Series and in the principal amount specified opposite such Purchaser’s name in the Purchaser Schedule at the purchase price of 100% of the principal amount thereof. The Purchasers’ obligations hereunder are several and not joint obligations and no Purchaser shall have any liability to any Person for the performance or non-performance of any obligation by any other Purchaser hereunder.

SECTION 3. CLOSING.

The sale and purchase of the Series A Notes, Series C Notes and Series D Notes to be purchased by each Purchaser purchasing Notes of such Series shall occur at the offices of Milbank LLP, 55 Hudson Yards, New York, New York 10001, at 10:00 A.M., New York City time, at a closing (the “Initial Closing”) on the date of this Agreement or on such other Business Day thereafter on or prior to May 21, 2021 as may be agreed upon by the Company and the Purchasers. The sale and purchase of the Series B Notes to be purchased by each Purchaser purchasing Notes of such Series shall occur at the offices of Milbank LLP, 55 Hudson Yards, New York, New York 10001, at 10:00 A.M., New York City time, at a closing (the “Subsequent Closing” and, together with the Initial Closing, each, a “Closing” and together, the “Closings”) on August 12, 2021 or such other date as may be agreed upon by the Company and the Purchasers of the Series B Notes.

At each Closing the Company will deliver to each Purchaser the Notes to be purchased by such Purchaser in the form of a single Note (or such greater number of Notes in denominations of at least $100,000 as such Purchaser may request) dated the date of such Closing and registered in such Purchaser’s name (or in the name of its nominee), against delivery by such Purchaser to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Company to account number 12829700, account titled “Seaspan Holdco III May 2021 USPP” at Citibank, N.A., Address: 480 Washington Blvd., 30th Floor, Jersey City, New Jersey 07310, ABA: 0210-0008-9, SWIFT: CITIUS33. If at any Closing the Company shall fail to tender the applicable Notes to any Purchaser of such Notes as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to such Purchaser’s satisfaction, such Purchaser shall, at its election, be relieved of all further obligations under this Agreement, without thereby waiving any rights such Purchaser may have by reason of such failure by the Company to tender such Notes or any of the conditions specified in Section 4 not having been fulfilled to such Purchaser’s satisfaction.

SECTION 4. CONDITIONS TO CLOSING.

Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such Purchaser at a Closing is subject to the fulfilment to such Purchaser’s satisfaction, prior to or at such Closing, of the following conditions:

Section 4.1. Financing Documents. The Company shall have delivered or Made Available to such Purchaser copies of counterparts of each of the following documents duly executed by all parties thereto on or before the date of Initial Closing:

(a) this Agreement;

 

2


(b) the Intercreditor Agreement, together with an Additional Secured Debt Designation, a Reaffirmation Agreement and Intercreditor Joinder in respect of the Notes;

(c) any Intra Group Loan Agreement; and

(d) the Security Documents in effect as of the date of such Closing, along with each notice and acknowledgement of assignment required to be served under any Security Document as of such date.

Section 4.2. Corporate Documents. In respect of the Company and the Guarantor, such Purchaser shall have received prior to the Initial Closing:

(a) a copy, certified by a duly authorized representative of such Person to be a true, complete and up to date copy, of the constitutional documents of that Person;

(b) a copy, certified by a duly authorized representative of such Person to be a true copy and as being in full force and effect and not amended or rescinded, of a resolution of the board of directors of such Person:

(i) approving the terms of, and the transactions contemplated by, the Financing Documents to which it is a party and resolving that it execute, deliver and perform the Financing Documents to which it is a party;

(ii) authorizing a Person or Persons to execute and deliver, on behalf of that Person, the Financing Documents to which it is party and any notices or other documents to be given pursuant thereto;

(c) a copy, certified by a duly authorized representative of that Person to be a true copy and as being in full force and effect and not amended or rescinded of the power of attorney (if any) issued by or on behalf of that Person, and not amended or rescinded, authorizing the execution by the attorneys named therein of the Financing Documents to which it is a party; and

(d) specimen signatures of the signatories of that Person (including any attorney named in the power of attorney referred to in paragraph (c) above), certified by an officer of that Person.

Section 4.3. Know your customer.

(a) Each of the Finance Parties shall have received satisfactory information in order to satisfy their respective “know your customer” requirements.

(b) To the extent the Company qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, at least five (5) days prior to the applicable Closing, any Purchaser that has requested, in a written notice to the Company at least ten (10) days prior to the applicable Closing, a Beneficial Ownership Certification in relation to the Company shall have received such Beneficial Ownership Certification (provided that, upon the execution and delivery by such Purchaser of its signature page to this Agreement, the condition set forth in this clause (b) shall be deemed to be satisfied).

 

3


Section 4.4. Opinions of Counsel.

(a) Such Purchaser shall have received each of the following, in form and substance satisfactory to such Purchaser, dated the date of the Initial Closing: (i) (A) a legal opinion from Oxton Law, Marshall Islands special counsel, (B) a reliance letter with respect to a legal opinion from Singapore counsel as to matters of Singapore law issued on May 19, 2021, (C) a reliance letter with respect to a legal opinion from Bermudan counsel as to matters of Bermudan law issued on May 19, 2021, (D) a reliance letter with respect to a legal opinion from Hong Kong counsel as to matters of Hong Kong law issued on May 19, 2021, (E) a reliance letter with respect to a legal opinion from British Columbian counsel as to matters of British Columbia law issued on May 19, 2021, (F) a legal opinion from DLA Piper LLP (US), New York special counsel for the Obligors with respect to enforceability of the Financing Documents and such other matters as reasonably requested by the Purchasers (and the Company hereby instructs its counsel to deliver such opinions to the Purchasers) and (ii) a legal opinion from Milbank LLP, the Purchasers’ special counsel in connection with such transactions, substantially in the form set forth in Schedule 4.4(b) and covering such other matters incident to such transactions as such Purchaser may reasonably request.

(b) Such Purchaser shall have received (i) copies of each legal opinion previously delivered to the Security Trustee in respect of the Security Interests purported to be granted by the Security Documents and (ii) if required, reliance letter(s) issued by Marshall Islands and/or Singapore counsel and/or such other counsel as may be relevant with respect to any previous legal opinion(s) issued on matters of law in such other jurisdiction.

Section 4.5. Fees and Expenses. Without limiting Section 16.1, the Company shall have paid on or before the applicable Closing the fees, charges and disbursements of the Note Administrative Agent, the Paying Agent, the Registrar and Purchasers’ special counsel referred to in Section 4.4 to the extent reflected in a statement of the Note Administrative Agent, the Paying Agent, the Registrar or such counsel, as applicable, rendered to the Company at least one Business Day prior to the applicable Closing.

Section 4.6. Representations and Warranties. The representations and warranties of the Company in this Agreement shall be true and correct in all material respects (or, if containing a materiality qualifier, shall be true and correct in all respects) at the applicable Closing.

Section 4.7. No Default. No Default, Event of Default or Cash Sweep Event under the Program Debt Documents is outstanding or would result from the issuance and sale of the applicable Notes.

Section 4.8. Other Documents. The Purchasers of the applicable Notes shall have received such other documents as such Purchasers may reasonably request.

Section 4.9. Security; Guarantees; Lien Searches.

(a) A valid and perfected first priority security interest in the Security Assets purported to be created by the Security Documents shall have been created and perfected in favor of the Security Trustee for the benefit of the Secured Parties, and, upon execution and delivery of the documents referred to in clause (b) of Section 4.1 and payment by such Purchaser of the

 

4


purchase price in respect of the Notes purchased by such Purchaser, such Purchaser shall (i) have become a Secured Party, (ii) benefit from such Security Interests pro rata and on a pari passu basis along with the other Secured Parties in accordance with the Security Documents and the Intercreditor Agreement and (iii) benefit from the guarantees (the “Program Debt Guarantees”) issued by the Guarantor and each other “Guarantor” (as defined in the Intercreditor Agreement) pursuant to the Intercreditor Agreement pro rata and on a pari passu basis along with the other Secured Parties.

(b) Such Purchaser shall have received customary reports of recent searches of UCC (or reasonably equivalent) financing statements, ship mortgage and fixture filings and judicial and tax lien filings that have been made with respect to any personal or mixed property of each Obligor in the jurisdiction of formation or organization of such Obligor or where a filing has been or would need to be made in order to perfect the Security Trustee’s security interest in the Security Interests purported to be created by the Security Documents, including in the Approved Flag States in which the Vessels are registered, together with copies of all filings disclosed by such searches.

Section 4.10. Certificates.

(a) Officer’s Certificate. The Company shall have delivered to such Purchaser an Officer’s Certificate, dated the date of the applicable Closing, certifying that the conditions specified in Sections 4.6, 4.7, 4.12 and 4.15 have been fulfilled.

(b) Compliance Certificate. A Compliance Certificate signed by the Company and certifying, taking account of the issuance and sale of the Notes: (i) the BB Ratio and that no BB Event will occur or is continuing (including confirmation as to any Excluded Collateral Vessels or exclusions of Asset Values due to any Concentration Limit Event); (ii) the DSCR Ratio and that no DSCR Cash Sweep Event will occur or is continuing; (iii) compliance with the Guarantor Financial Covenants; (iv) compliance with the Concentration Limit Requirements; and (v) compliance with the Hedging Requirement.

Section 4.11. Management Agreement. The Company shall have delivered or Made Available to each Purchaser a certified copy of the Management Agreement in respect of each Collateral Vessel.

Section 4.12. Purchase Permitted By Applicable Law, Etc. On the date of the applicable Closing such Purchaser’s purchase of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which such Purchaser is subject, without recourse to provisions (such as section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not violate any Applicable Law or regulation (including Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) with respect to any Purchaser of Series B Notes, not subject such Purchaser to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof. If requested by such Purchaser, such Purchaser shall have received an Officer’s Certificate certifying as to such matters of fact as such Purchaser may reasonably specify to enable such Purchaser to determine whether such purchase is so permitted.

 

5


Section 4.13. Sale of Other Notes. Contemporaneously with the applicable Closing, the Company shall sell to each other Purchaser and each other Purchaser shall purchase the Notes to be purchased by it at such Closing as specified in the Purchaser Schedule.

Section 4.14. Private Placement Number. A Private Placement Number issued by Standard & Poor’s CUSIP Service Bureau (in cooperation with the SVO) shall have been obtained for each Series of Notes.

Section 4.15. Changes in Corporate Structure. No Obligor shall have changed its jurisdiction of incorporation or organization, as applicable, or been a party to any merger or consolidation or succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements referred to in Schedule 5.5.

Section 4.16. Funding Instructions. At least three (3) Business Days prior to the date of the applicable Closing, each Purchaser purchasing Notes at such Closing shall have received written instructions signed by a Responsible Officer on letterhead of the Company confirming the information specified in Section 3 including (i) the name and address of the transferee bank, (ii) such transferee bank’s ABA number/Swift Code/IBAN and (iii) the account name and number into which the purchase price for the Notes is to be deposited. Each Purchaser has the right, upon written notice (which may be by email) to the Company, to elect to deliver a micro deposit (less than $1.00) to the account identified in such written instructions no later than two (2) Business Days prior to the date of the applicable Closing. If a Purchaser delivers a micro deposit, a Responsible Officer shall verify (in a manner reasonably requested by such Purchaser) the receipt and amount of the micro deposit to such Purchaser if such verification is requested by such Purchaser prior to the applicable date of Closing. The Company shall not be obligated to return the amount of the micro deposit, nor will the amount of the micro deposit be netted against such Purchaser’s purchase price of the Notes.

Section 4.17. Ratings. The Purchasers shall have received, prior to the Initial Closing, a copy of a letter issued by Kroll Bond Rating Agency, Inc. assigning a credit rating of at least “BBB-” to the Notes.

Section 4.18. Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be satisfactory to such Purchaser and its special counsel, and such Purchaser and its special counsel shall have received all such counterpart originals or certified or other copies of such documents as such Purchaser or such special counsel may reasonably request.

SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants with respect to itself and each other Obligor to each Purchaser that, as of the date of each Closing and, in respect of the representations and warranties set forth in Sections 5.1, 5.2, 5.3, 5.4, 5.6, 5.7, 5.8, 5.9, 5.11, 5.12, 5.16, 5.17, 5.21, 5.22, 5.27, 5.29, 5.30, 5.32(a), 5.33, 5.34 and 5.35, as of each Payment Date:

 

6


Section 5.1. Status. (a) Each Obligor is a corporation, duly incorporated and validly existing under the laws of the Republic of the Marshall Islands, or in relation to any applicable Vessel Owner, Singapore (or such other jurisdiction either as may be acceptable pursuant to the Requisite Program Debt, subject to Section 24.9, or as may be acceptable to the Required Holders), and (b) each Obligor has the power to own its assets and carry on its business as it is being conducted.

Section 5.2. Power and Authority. Each Obligor has the power to enter into and perform, and has taken all necessary action to authorize the entry into and performance of, the Financing Documents to which it is or will be a party and the transactions contemplated by those Financing Documents.

Section 5.3. Legal Validity. The obligations expressed to be assumed by each Obligor in each Financing Document to which it is a party are legal, valid, binding and enforceable obligations, except as such enforceability may be limited by any applicable bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally and to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

Section 5.4. Non-Conflict. The entry into and performance by each Obligor of, and the transactions contemplated by, the Financing Documents to which it is a party do not conflict in any material respect with: (a) any law or regulation applicable to it; (b) its constitutional documents; or (c) any document which is binding upon it or any of its assets that, in the case of this clause (c), would reasonably be expected to cause a Material Adverse Effect.

Section 5.5. No Default. No Default or Event of Default is continuing or will result from the execution of, or the performance of any transaction contemplated by, any Financing Document. No other event is outstanding which constitutes a default under any document which is binding on any Obligor or any of its assets to an extent or in a manner which is reasonably likely to have a Material Adverse Effect.

Section 5.6. Authorizations. All consents, approvals, authorizations, registrations, filings or declarations required by any Obligor in connection with the entry into, performance, validity and enforceability of, and the transactions contemplated by, the Financing Documents have been obtained or effected (as appropriate) and are in full force and effect.

Section 5.7. Financial Statements. The Company has delivered or Made Available to each Purchaser copies of the Original Financial Statements. Such financial statements, together with any other financial information of the Guarantor supplied or Made Available to the Note Administrative Agent by the Company or the Guarantor: (a) have been prepared in accordance with GAAP, consistently applied; (b) have been audited in accordance with GAAP; and (c) fairly represent its financial condition (consolidated, if applicable) as at the date to which they were drawn up, except, in each case, as disclosed to the contrary in those financial statements or other information.

Section 5.8. Disclosure. The Company has delivered or Made Available to each Purchaser a copy of the “Project Clean Private Placement Senior Secured Sustainability Linked Notes Investor Presentation”, dated April 2021 (the “Memorandum”), relating to the transactions contemplated hereby. The Memorandum fairly describes, in all material respects, the general nature of the business and principal properties of the Company and its Subsidiaries.

 

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This Agreement, the Memorandum, the Original Financial Statements, the consolidated financial statements of the Guarantor for the financial years ended 31 December 2018 and 31 December 2019, any financial statements provided pursuant to Section 7.1(a) and the documents, certificates or other writings delivered or Made Available to the Purchasers by or on behalf of the Company prior to the Closing in connection with the transactions contemplated hereby (this Agreement, the Memorandum and such documents, certificates or other writings and such financial statements delivered or Made Available to each Purchaser being referred to, collectively, as the “Disclosure Documents”), taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made. There is no fact known to the Company that could reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in the Disclosure Documents; provided that no representation is made as to any projections included in the Disclosure Documents other than that such projections are based on information that the Company reasonably believes to be accurate and were calculated in a manner that the Company believes to be reasonable.

Section 5.9. No Material Adverse Effect. There has been no Material Adverse Effect since the date of the Original Financial Statements.

Section 5.10. Litigation. No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency (including, but not limited to, investigative proceedings) which, if adversely determined, might reasonably be expected to have a Material Adverse Effect have (to the best of its knowledge and belief) been started or threatened against any Obligor.

Section 5.11. Ranking of Obligations. The Company’s and each other Obligor’s payment obligations under this Agreement, the Notes and the other Financing Documents will, upon issuance of the Notes, rank at least pari passu, without preference or priority, with all other present and future unsecured and unsubordinated payment obligations of such Person, except for obligations mandatorily preferred by law applying to companies generally.

Section 5.12. Taxes. Each Obligor has filed all Tax returns which are required to have been filed and has paid, or made adequate provisions for the payment of, all of its Taxes which are due and payable, except such Taxes, if any, as are being contested in good faith and by appropriate proceedings and as to which such reserves or other appropriate provisions as may be required by GAAP have been established, and except where failure to file such returns or pay such Taxes, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

Section 5.13. Taxes on Payments. Assuming for these purposes that no Purchaser is based or conducting business in the Republic of the Marshall Islands or Hong Kong, all amounts payable by any Obligor to the Finance Parties under the Financing Documents and the Related Contracts may be made without any deduction or withholding for any Taxes.

Section 5.14. Stamp Duties. Except as notified in writing to the Note Administrative Agent by any Obligor, no stamp or registration duty or similar Tax or charge is payable in its jurisdiction of incorporation in respect of any Financing Document or Related Contract.

 

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Section 5.15. Environment. Except as may already have been disclosed by the Company in writing to the Note Administrative Agent: (a) each Vessel Owner and its Environmental Representatives have, without limitation, complied with the provisions of all applicable Environmental Laws in relation to each Collateral Vessel in all material respects; (b) each Vessel Owner and its Environmental Representatives have obtained all requisite Environmental Approvals in relation to each Collateral Vessel and are in compliance with such Environmental Approvals; (c) no Vessel Owner or any of their Environmental Representatives have received notice of any Environmental Liability in relation to a Collateral Vessel which alleges that a Vessel Owner is not in compliance in all material respects with applicable Environmental Laws in relation to such Collateral Vessel or Environmental Approvals in relation to such Collateral Vessel; (d) there is no Environmental Liability in relation to any Collateral Vessel pending or, to the knowledge of the Company, threatened which is such that a first class Vessel Owner or operator of vessels such as the Collateral Vessels, making all due enquiries and complying in all respects with its obligations under the ISM Code, ought to have known about; and (e) there has been no release of Hazardous Materials by or in respect of any Collateral Vessel about which a first class borrower or operator of vessels such as the Collateral Vessels making all due enquiries and complying in all respects with its obligations under the ISM Code ought to have known about.

Section 5.16. Security Interests. No Security Interest exists over any Obligors’ assets which would cause a breach of Section 10.1.

Section 5.17. Security Assets. Each Obligor is solely and absolutely entitled to the Security Assets over which it has or will create any Security Interest pursuant to the Security Documents to which it is, or will be, a party and there is no agreement or arrangement, under which it is obliged to share any proceeds of or derived from such Security Assets with any third party.

Section 5.18. Collateral Vessel. (a) Each Collateral Vessel is operational, seaworthy and fit for service and is registered in the name of the applicable Vessel Owner at the relevant registry in the Approved Flag State; and (b) except as approved either in accordance with the Requisite Program Debt, subject to Section 24.9, or by the Required Holders, there are no arrangements under which Earnings of any Collateral Vessel may be shared with anyone else.

Section 5.19. ISM Code and ISPS Code compliance. In respect of each Collateral Vessel, the relevant Vessel Owner is in compliance with the ISM Code and ISPS Code in respect of that Collateral Vessel in all material respects.

Section 5.20. Related Contracts. The copies of the Obligatory Insurances, Management Agreement (including the joinders thereto), Eligible Charters and Charter Guarantees provided or Made Available to the Purchasers prior to the Closing are correct and complete (and there have been no material amendments thereto) as of the Closing.

Section 5.21. Money Laundering. Neither the issuance of the Notes nor the performance of any of the Obligors’ respective obligations under the Financing Documents or Related Contracts will involve any breach by the Obligors or any of their respective Subsidiaries of any money laundering or terrorism financing statutes of the United States of America, Canada or any other jurisdictions where the Obligors or any of their respective Subsidiaries conduct business, the rules and regulations thereunder or any related or similar rules, regulations or guidelines, issued, administered or enforced by any relevant governmental or regulatory agency (collectively, the “Anti-Money Laundering Laws”).

 

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Section 5.22. Anti-Corruption and Sanctions. (a) Each Obligor is conducting and will continue to conduct its business in compliance with Anti-Money Laundering Laws and Anti-Corruption Laws; (b) each Obligor has implemented, maintained, and will continue to maintain in effect policies and procedures to promote and achieve its compliance and the compliance by its directors, officers, employees, and agents, with Anti-Money Laundering Laws and Anti-Corruption Laws; (c) none of the Obligors or any of their subsidiaries or any of their respective directors or officers is, or, to the knowledge of the Obligors, is owned or controlled by, a Sanctioned Person, or located, organized, or resident in a Sanctioned Jurisdiction; (d) no proceeds of the Notes will be Made Available, directly or indirectly, to or for the benefit of, or used to fund any activities with or business of a Sanctioned Person, or in any country or territory that, at the time of such funding, is the subject of Sanctions, or otherwise applied in a manner or for a purpose prohibited by Sanctions or Anti-Corruption Laws, or which would result in a violation of Sanctions by any Person (including any Person participating in the issuance, offering or funding of the Notes, whether as underwriter, advisor, investor, lender, hedge provider, facility or security agent or otherwise); (e) each Obligor and each of their Subsidiaries is in compliance with all Sanctions, is not, to the best of its knowledge and belief, under investigation for an alleged violation of Sanctions, and has implemented a policy for Sanctions in line with the requirements of this Agreement; (f) each Obligor and each of their Subsidiaries shall not fund all or part of any repayment required to be made pursuant to the Notes out of proceeds directly or indirectly derived from any business, activities or transactions which would be prohibited by Sanctions or which would otherwise cause any Person or any Finance Party to be in breach of Sanctions or to otherwise become the subject or target of Sanctions; and (g) each Obligor and each of their Subsidiaries shall not (and shall procure that no Charterer of any Collateral Vessel will) operate, possess, use, dispose of or otherwise deal with, or procure or allow the ownership, operation, possession, use, disposal of or any other dealing with, each Collateral Vessel or part thereof for any purpose or to any Person which would violate or cause any Finance Party to violate, when and as applicable, any Sanctions, any Anti-Money Laundering Law or any Anti-Corruption Laws, in each case applicable to it.

Section 5.23. Compliance with Laws. To the best of the Company’s knowledge and belief, each Obligor is in compliance in all material respects with all laws and regulations applicable to it and is not under investigation for an alleged violation thereof.

Section 5.24. Investment Company Act. No Obligor is required to register as an “investment company,” as defined in the United States Investment Company Act of 1940, as amended without reliance on Section 3(c)(1) and/or Section 3(c)(7) of the Investment Company Act. No Obligor is a “covered fund” for purposes of the regulations adopted to implement Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (commonly referred to as the “Volcker Rule”). In making this determination, the Company has made this determination on the basis that no Obligor falls within the definition of “investment company” in Section 3(a)(1) of the Investment Company Act, although other bases or exceptions may be available. No Obligor is subject to regulation under the Public Utility Holding Company Act of 2005, the ICC Termination Act of 1995, or the Federal Power Act.

 

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Section 5.25. Regulation T, U and X. No Obligor is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Federal Reserve Board). No proceeds of the Notes will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock (within the meaning of Regulation U of the Federal Reserve Board) or for the purpose of buying or carrying or trading in any Securities under such circumstances as to involve the Company in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220).

Section 5.26. Insolvency. (a) No Obligor is unable, nor admits or has admitted its inability, to pay its debts as such debts become due or has suspended making payments on any of its debts; (b) no Obligor, by reason of actual or anticipated financial difficulties has commenced, or intends to commence, negotiations with one or more of its creditors with a view to rescheduling any of its Indebtedness; (c) the value of the assets of the Company is not less than its liabilities (taking into account contingent and prospective liabilities); (d) no moratorium has been, or may, in the reasonably foreseeable future be, declared in respect of any Obligors’ Indebtedness; and (e) no reorganization or liquidation of any Obligor has occurred.

Section 5.27. Immunity. The execution by each Obligor of each Financing Document to which it is a party constitutes, and the exercise by it of its rights and performance of its obligations under each such Financing Document will constitute, private and commercial acts performed for private and commercial purposes. No Obligor will be entitled to claim immunity from suit, execution, attachment or other legal process in any proceedings taken in its jurisdiction of incorporation in relation to any Financing Document.

Section 5.28. Private Offering by the Obligors. None of the Obligors nor anyone acting on any of their behalves has offered the Notes or any similar Securities for sale to, or solicited any offer to buy the Notes or any similar Securities from, or otherwise approached or negotiated in respect thereof with, any Person other than the Purchasers and not more than 85 other Institutional Investors, each of which has been offered the Notes at a private sale for investment. None of the Obligors nor anyone acting on any of their behalves has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of Section 5 of the Securities Act or to the registration requirements of any securities or blue sky laws of any applicable jurisdiction, including the jurisdiction of organization of the Company.

Section 5.29. Jurisdiction and Governing Law. Each of the following are legal, valid and binding under the Laws of each Obligor’s jurisdiction of incorporation: (a) its irrevocable submission under this Agreement to the jurisdiction of the courts of the State of New York sitting in New York County, and of the United States District Court of the Southern District of New York, and any appellate court from any thereof; (b) its agreement that this Agreement is governed by the law of the State of New York; and (c) its agreement not to claim any immunity to which it or its assets may be entitled. Any judgment obtained in the State of New York will be recognized and be enforceable by the courts of each Obligor’s jurisdiction of incorporation, subject to any statutory or other conditions of such jurisdiction.

 

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Section 5.30. Accounts. Except for the Charged Accounts, no Obligor (other than the Guarantor) has opened or instructed any other Person to open, any accounts.

Section 5.31. Charters. On the date of each Closing, each Eligible Charter relating to a Collateral Vessel is in full force and effect.

Section 5.32. Ownership.

(a) The Company is a wholly owned Subsidiary of the Guarantor. Each Vessel Owner is a wholly owned Subsidiary of the Company. No Obligor (other than the Guarantor) has any Subsidiaries other than Subsidiaries which are themselves Obligors.

(b) Schedule 5.32 contains (except as noted therein) complete and correct lists of (i) the Obligors, showing, as to each Obligor, the name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other Obligor, and (ii) the Company’s directors and senior officers.

(c) All of the outstanding shares of capital stock or similar equity interests of each Obligor shown in Schedule 5.32 as being owned by the Company or another Obligor have been validly issued, are fully paid and non-assessable and are owned by the Company or another Obligor free and clear of any Lien that is prohibited by this Agreement.

(d) No Obligor which is a Subsidiary of the Company is subject to any legal, regulatory, contractual or other restriction (other than the agreements listed on Schedule 5.32 and customary limitations imposed by corporate law or similar statutes) restricting the ability of such Subsidiary to pay dividends out of profits or make any other similar distributions of profits to the Company or any of its Subsidiaries that owns outstanding shares of capital stock or similar equity interests of such Subsidiary.

Section 5.33. Use of Proceeds. The proceeds of the Notes will be used by the Company (a) to repay a portion of the existing Program Debt, (b) to finance or refinance in part the acquisition of the Collateral Vessels purchased or to be purchased by the Vessel Owners; (c) for the payment of transaction fees and expenses incurred in connection with the Closings; and (d) for general corporate purposes of the Company and the Guarantor.

Section 5.34. Special Purpose Representations. Except, in each case, with respect to the Guarantor (a) no Obligor has any employees; (b) no Obligor is a party to any contract or agreement with any Person, or has conducted any business, or has otherwise created or incurred any liability to any Person, other than in connection with the acquisition, chartering and disposition of the Security Assets, the issuance of Notes or otherwise as permitted by the Financing Documents and activities ancillary thereto; (c) no Obligor is a partner or joint venturer in any partnership or joint venture; and (d) each Obligor has complied in all material respects with all corporate and/or other legal formalities required by its certificate of incorporation, certificate of formation and by-laws, operating agreement, memorandum and articles of association, constitution or similar formation documents, as applicable, and as duly amended prior to the Closing, and by Applicable Law, including, among other things, the observance of all restrictions on activity and corporate or other legal form of each such entity’s organizational documents.

 

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Section 5.35. Separateness. (a) The Company, on behalf of each Obligor (other than the Guarantor) represents that it conducts its business such that it is a separate and readily identifiable business from, and independent of, any Person that is not a Subsidiary, including the Guarantor and each seller under a Purchase Agreement and their respective affiliates (collectively, “Unrelated Parties”), and further covenants as follows:

(i) each Obligor (other than the Guarantor) observes all corporate formalities necessary to remain a legal entity separate and distinct from, and independent of, each Unrelated Party;

(ii) each Obligor (other than the Guarantor) maintains its assets and liabilities separate and distinct from those of each Unrelated Party other than the Company, and will not commingle its assets with those of any Unrelated Party other than the Company;

(iii) each Obligor (other than the Guarantor) maintains its accounts and funds separate and distinct from the accounts and funds of each Unrelated Party other than the Company and will receive, deposit, withdraw and disburses its funds separately from any funds of any Unrelated Party other than the Company;

(iv) each Obligor (other than the Guarantor) maintains records, books, accounts and minutes separate from those of any Unrelated Party;

(v) each Obligor (other than the Guarantor) conducts its own business in its own name, and not in the name of any Unrelated Party;

(vi) each Obligor (other than the Guarantor) maintains an arm’s-length relationship with its Affiliates;

(vii) each Obligor (other than the Guarantor) maintains separate financial statements from each Unrelated Party, or if part of a consolidated group, then it will be shown as a separate member of such group;

(viii) each Obligor (other than the Guarantor) pays its own liabilities and obligations out of its own funds, whether in the ordinary course of business or not, as a legal entity separate from each Unrelated Party, provided that liabilities and obligations of Vessel Owners may be paid by Company;

(ix) each Obligor (other than the Guarantor) uses separate stationery, invoices and checks from those of each Unrelated Party;

 

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(x) each Obligor (other than the Guarantor) holds itself out as a separate entity, and shall correct any known misunderstanding regarding its status as a separate entity;

(xi) each Obligor (other than the Guarantor) has not agreed to pay or become liable for any Indebtedness of any Unrelated Party;

(xii) each Obligor (other than the Guarantor) has not held out that it is a division of any Unrelated Party, or that any Unrelated Party is a division of it;

(xiii) each Obligor (other than the Guarantor) has not induced any third party to rely on the creditworthiness of any Unrelated Party other than the Guarantor in order that such third party will be induced to contract with it;

(xiv) each Obligor (other than the Guarantor) has not entered into any transactions between it and any Unrelated Party that are more favorable to the Unrelated Party than transactions that the parties would have been able to enter into at such time on an arm’s-length basis with a non-affiliated third party, other than any agreements in effect on the date of the Initial Closing;

(xv) each Obligor (other than the Guarantor) observes all corporate or other procedures, including minimum capitalization requirements, required under Applicable Law and under its constitutive documents; and

(xvi) each Obligor’s (other than the Guarantor) directors acts in accordance with their duties at law and to exercise independent judgment, and shall not breach those duties or act solely in accordance with any direction, opinion, recommendation or instruction of any Unrelated Party in relation to the approval or rejection of, or the exercise of any voting power in relation to, any transaction approval requirements.

(b) The Company generally carries on its business and manages its affairs as an independent business separate and identifiable from the business of each Unrelated Party and any other Person.

Section 5.36. Beneficial Ownership Certification. As of the Closing, to the best knowledge of the Company, the information included in the Beneficial Ownership Certification provided on or prior to the Closing to any Purchaser in connection with this Agreement is true and correct in all respects.

Section 5.37. Title to Property; Leases. The Company and the Obligors have good and sufficient title to their respective properties that individually or in the aggregate are Material, including all such properties reflected in the most recent audited balance sheet referred to in Section 5.7 or purported to have been acquired by the Company or any Obligor after such date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens prohibited by this Agreement. All leases that individually or in the aggregate are Material are valid and subsisting and are in full force and effect in all material respects.

 

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Section 5.38. Licenses, Permits, Etc.

(a) The Obligors own or possess all licenses, permits, franchises, authorizations, patents, copyrights, proprietary software, service marks, trademarks and trade names, or rights thereto, without known conflict with the rights of others, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b) To the best knowledge of the Company, no product or service of the Obligors infringes in any respect any license, permit, franchise, authorization, patent, copyright, proprietary software, service mark, trademark, trade name or other right owned by any other Person, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(c) To the best knowledge of the Company, there is no violation by any Person of any right of the Obligors with respect to any license, permit, franchise, authorization, patent, copyright, proprietary software, service mark, trademark, trade name or other right owned or used by the Obligors, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 5.39. Benefit Plan Compliance.

(a) Neither the Company nor any ERISA Affiliate maintains, contributes to or is obligated to maintain or contribute to, or has, at any time within the past six years, maintained, contributed to or been obligated to maintain or contribute to, any employee benefit plan which is subject to Title I or Title IV of ERISA or section 4975 of the Code (a “U.S. Plan”). Neither the Company nor any ERISA Affiliate is, or has ever been at any time within the past six years, a “party in interest” (as defined in section 3(14) of ERISA) or a “disqualified person” (as defined in section 4975 of the Code) with respect to any U.S. Plan.

(b) The present value of the accrued benefit liabilities (whether or not vested) under each Non-U.S. Plan that is funded, determined as of the end of the Company’s most recently ended fiscal year on the basis of reasonable actuarial assumptions, did not exceed the current value of the assets of such Non-U.S. Plan allocable to such benefit liabilities by more than $10,000,000. The term “benefit liabilities” has the meaning specified in section 4001 of ERISA and the terms “current value” and “present value” have the meaning specified in section 3 of ERISA.

(c) The Company and its ERISA Affiliates have not incurred any obligation in connection with the termination of or withdrawal from any Non-U.S. Plan that individually or in the aggregate are Material.

(d) All Non-U.S. Plans have been established, operated, administered and maintained in compliance with all laws, regulations and orders applicable thereto, except where failure so to comply could not be reasonably expected to have a Material Adverse Effect. All premiums, contributions and any other amounts required by applicable Non-U.S. Plan documents or Applicable Laws to be paid or accrued by the Company and its Subsidiaries have been paid or accrued as required, except where failure so to pay or accrue could not be reasonably expected to have a Material Adverse Effect.

 

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Section 5.40. Existing and Future Indebtedness.

(a) Except as described therein, Schedule 5.40 sets forth a complete and correct list of (x) all outstanding Indebtedness of the Company and its Subsidiaries and (y) all Material outstanding Indebtedness of the Guarantor, in each case, as of March 31, 2021 (including descriptions of the obligors and obligees, principal amounts outstanding, any collateral therefor and any Guarantees thereof) since which date, except as set forth on such Schedule, there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of the Obligors. No Obligor is in default and no waiver of default is currently in effect in the payment of any principal or interest on any such Indebtedness and no event or condition exists with respect to any such Indebtedness that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.

(b) No Obligor (other than the Guarantor) is party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness of such Obligor, any agreement relating thereto or any other agreement (including its charter or any other organizational document) which limits the amount of, or otherwise imposes restrictions on the incurring of, Indebtedness of such Obligor, except as disclosed in Schedule 5.40.

SECTION 6. REPRESENTATIONS OF THE PURCHASERS.

Section 6.1. Purchase for Investment. Each Purchaser severally represents that it is purchasing the Notes for its own account or for one or more separate accounts maintained by such Purchaser or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of such Purchaser’s or their property shall at all times be within such Purchaser’s or their control. Each Purchaser understands that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes.

Section 6.2. Accredited Investor. Each Purchaser severally represents that it is an “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act). Each Purchaser further severally represents that the Company has made available to it, a reasonable time prior to the consummation of the transactions contemplated by this Agreement, the opportunity to ask questions and receive answers concerning the terms and conditions of the offering of the Notes that it is purchasing or shall purchase and to obtain any additional information which the Company possesses or could acquire without unreasonable effort or expense; provided that the foregoing shall not be construed as limiting the ability of any Purchaser to rely on the representations and warranties of the Obligors contained in this Agreement or any other document related thereto.

Section 6.3. Source of Funds. Each Purchaser severally represents that at least one of the following statements is an accurate representation as to each source of funds (a Source) to be used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser hereunder:

 

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(a) the Source is an “insurance company general account” (as the term is defined in the United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the NAIC (the “NAIC Annual Statement”)) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of domicile; or

(b) the Source is a separate account that is maintained solely in connection with such Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or

(c) the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1 or (ii) a bank collective investment fund, within the meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the Company in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or

(d) the Source constitutes assets of an “investment fund” (within the meaning of Part VI of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM Exemption), no employee benefit plan’s assets that are managed by the QPAM in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, represent more than 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM maintains an ownership interest in the Company that would cause the QPAM and the Company to be “related” within the meaning of Part VI(h) of the QPAM Exemption and (i) the identity of such QPAM and (ii) the names of any employee benefit plans whose assets in the investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization, represent 10% or more of the assets of such investment fund, have been disclosed to the Company in writing pursuant to this clause (d); or

 

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(e) the Source constitutes assets of a “plan(s)” (within the meaning of Part IV(h) of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (within the meaning of Part IV(a) of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled by the INHAM (applying the definition of “control” in Part IV(d)(3) of the INHAM Exemption) owns a 10% or more interest in the Company and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this clause (e); or

(f) the Source is a governmental plan; or

(g) the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this clause (g); or

(h) the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA.

As used in this Section 6.3, the terms “employee benefit plan,” “governmental plan,” and “separate account” shall have the respective meanings assigned to such terms in section 3 of ERISA.

SECTION 7. INFORMATION AS TO COMPANY.

Section 7.1. Financial and Business Information. The Company shall deliver to each Purchaser and each holder of a Note that is an Institutional Investor (and for purposes of this Agreement the information required by this Section 7.1 shall be deemed delivered on the date of delivery of such information in the English language or the date of delivery of an English translation thereof):

(a) Financial Statements — (i) the audited consolidated financial statements of the Guarantor for each of its financial years ending after the Initial Closing; and (ii) quarterly consolidated statements of the Guarantor for each quarter of each of their financial years ending after the Initial Closing. All financial statements must be supplied promptly after they are available and: (A) in the case of audited financial statements, within one hundred eighty (180) days of the end of the relevant financial period; and (B) in the case of quarterly financial statements, within ninety (90) days of the end of the relevant financial period. The Company must ensure that each set of the financial statements supplied under this Agreement fairly represents in all material respects the financial condition (consolidated or otherwise) of the Guarantor as at the date to which those financial statements were drawn up, subject, in the case of interim financial statements, to year-end adjustments and the absence of footnotes. The Company must notify each holder of a Note of any material change to the basis on which the Guarantor’s audited financial statements are prepared. If requested by the Note Administrative Agent or the Required Holders, the Company must supply or procure that the following are supplied to each holder of a Note: (i) a full description of any material change notified above; and (ii) sufficient information to enable such holder to make a proper comparison between the financial position shown by the set of financial statements prepared on the changed basis and its

 

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most recent audited consolidated financial statements delivered to each holder of a Note under this Agreement. If requested by the Note Administrative Agent or the Required Holders, the Guarantor must enter into discussions for a period of not more than thirty (30) days with a view to agreeing to any amendments required to be made to this Agreement to place the Purchasers in the same position as it would have been in if the material change had not happened. If no such agreement is reached on the required amendments to this Agreement, the Company must ensure that the Guarantor’s or its auditors certify those amendments; the certificate of the auditors will be, in the absence of manifest error, binding on all the parties hereto. The annual financial statements referenced in clause (i) of the first sentence of this Section 7.1(a) shall be accompanied by an opinion thereon (without any qualification or exception, including as to the scope of the audit on which such opinion is based) of independent public accountants of recognized international standing, which opinion shall state that such financial statements present fairly, in all material respects the financial position of the companies being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances.

(b) Notice of Default or Event of Default — (i) promptly upon becoming aware of its occurrence, notice of any Default or Event of Default (and the steps, if any, being taken to remedy it) and (ii) promptly on request by the Note Administrative Agent or the Required Holders, but not more often than once in any 3 month period, unless the Note Administrative Agent or the Required Holders, acting reasonably, believe an Event of Default has occurred and is continuing (in which event the Note Administrative Agent or the Required Holders shall specify the applicable Event of Default and shall be entitled to make such requests as and when it reasonably considers or they reasonable consider it appropriate to do so), a certificate, signed by two (2) of the Company’s authorized signatories on the Company’s behalf, certifying that no Event of Default is continuing or, if an Event of Default is continuing, specifying the Event of Default and the steps, if any, being taken to remedy such Event of Default.

(c) Benefit Plan Matters — promptly, and in any event within five (5) days after a Responsible Officer becoming aware of any of the following, a written notice setting forth the nature thereof and the action, if any, that the Company or an ERISA Affiliate proposes to take with respect thereto receipt of notice of the imposition of a Material financial penalty (which for this purpose shall mean any tax, penalty or other liability, whether by way of indemnity or otherwise) with respect to one or more Non-U.S. Plans;

(d) Notices from Governmental Authority — promptly, and in any event within thirty (30) days of receipt thereof, copies of any notice to the Company or any Subsidiary from any Governmental Authority relating to any order, ruling, statute or other law or regulation that could reasonably be expected to have a Material Adverse Effect;

(e) Resignation or Replacement of Auditors — within ten (10) days following the date on which the Guarantor’s auditors resign or the Guarantor elects to change auditors, as the case may be, notification thereof, together with such further information as the Note Administrative Agent or the Required Holders may reasonably request; and

 

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(f) Miscellaneous Information

(i) information with respect to the Collateral Vessels reasonably requested by the Note Administrative Agent and copies of any publicly available information regarding the Obligors;

(ii) promptly upon becoming aware of them, details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against it and which would reasonably be expected, if adversely determined, to have a Material Adverse Effect;

(iii) promptly upon becoming aware of them, details of any claim, lawsuit, action, proceedings or investigation which are current, threatened or pending against it with respect to Sanctions or Anti-Corruption Laws; and

(iv) promptly on request by the Note Administrative Agent or any Purchaser or Holder (A) such further information, in sufficient copies for all holders of Notes, regarding the financial condition and operations of the Obligors as any such Purchaser or holder may reasonably request and (B) information and documentation reasonably requested by the Note Administrative Agent or any such Purchaser or Holder for purposes of compliance with the Beneficial Ownership Regulation.

Section 7.2. Compliance Certificate. The Company will deliver to the Holders a Compliance Certificate certified by the Company and the Guarantor in the form set out in Schedule 7.2 on the following dates:

(a) within two (2) Business Days following each Determination Date;

(b) five (5) days prior to a Vessel Disposition and if any related Net Sale Proceeds shall be used by the Company in making a prepayment in accordance with this Agreement and Section 4.02(e) of the Intercreditor Agreement, as of the date of such prepayment; or

(c) the date of any Total Loss of a Collateral Vessel (as determined by the Note Administrative Agent and notified to the Company);

(d) five (5) days prior to a Vessel Substitution Date;

(e) upon the release of any Security Assets; and

(f) on each Closing.

Each Compliance Certificate supplied by the Company and the Guarantor shall, amongst other things, set out (in reasonable detail) computations as to compliance with the financial covenants set forth in Section 10.9 below and the Concentration Limit Requirements and must be signed by an officer of the Guarantor.

 

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Section 7.3. Valuation.

(a) The valuation of a Collateral Vessel shall be the mean average of two valuations each certified in Dollars and carried out by two of the Approved Valuers (without physical inspection of the relevant Collateral Vessel), reporting to the Holders by way of written reports in form and substance satisfactory to the Note Administrative Agent (acting reasonably) on the basis of a sale for prompt delivery of the Collateral Vessel for cash (free of Security Interests), on a without charter basis and at arm’s-length on normal commercial terms as between willing seller and buyer.

(b) There shall be deducted from any value or valuation produced in accordance with this Section 7.3 an amount equal to the sum of (i) the amount which is owing at such time plus (ii) the amount which is scheduled to become due prior to the due date of the next valuation pursuant to clause (d) of this Section 7.3, in each case under the foregoing clauses (b)(i) and (ii), solely to the extent such amount is secured on the Collateral Vessel concerned by any prior or equal ranking Security Interest (other than in favor of the Security Trustee to secure the Secured Obligations).

(c) In respect of the Collateral Vessels, the Company will procure updated valuations on the basis described in this Section 7.3 every six months as of December 31 and June 30, provided that if a BB Event occurs and is not cured on the immediately succeeding Payment Date, the Company shall procure updated valuations on each Determination Date until such BB Event is cured. Such valuations shall be (or have been) used as the basis for determining the BB Ratio and shall be attached to each Compliance Certificate delivered pursuant to Section 7.2.

(d) The Company will procure in favor of the Note Administrative Agent and the Approved Valuers, all such information as they may reasonably require in order to effect such valuations.

(e) All valuations shall be at the expense of the Company.

(f) Any valuation under this Section 7.3 shall be binding and conclusive (save for manifest error).

Section 7.4. Visitation. Upon the request of the Note Administrative Agent, the Obligors shall provide the Note Administrative Agent and any of its representatives, professional advisors and contractors with access to, and permit inspection of, its books and records, in each case at reasonable times and upon reasonable notice; provided that unless an Event of Default has occurred and is continuing, such inspections shall not occur more than one time during any calendar year.

Section 7.5. Electronic Delivery.

(a) Financial statements, opinions of independent certified public accountants, other information and Compliance Certificates that are required to be delivered by the Company or any other Obligor or the Manager (the “Required Information”) shall be deemed to have been delivered if the documents required to be delivered are: (i) delivered to each holder of a Note by e-mail at the e-mail address set forth in such holder’s Purchaser Schedule or as communicated from time to time in a separate writing delivered to the Company; or (ii) timely Made Available to each Holder; provided however, that in no case shall access to such financial statements, other

 

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information and Officer’s Certificates be conditioned upon any waiver or other agreement or consent (other than confidentiality provisions consistent with Section 21 of this Agreement); provided further, that in the case of clause (ii), the Company shall have given each holder of a Note prior written notice, which may be by e-mail or in accordance with Section 19, of such posting or availability in connection with each delivery; and provided further, that upon request of the Note Administrative Agent or any Purchaser or Holder to receive copies of such forms, financial statements, other information and Officer’s Certificates by e-mail, the Company will promptly e-mail them to such holder.

(b) Notwithstanding anything to the contrary in this Section 7, the Company may deliver the Required Information to the Note Administrative Agent for further delivery to the Holders in a manner permitted by this Section 7 and, upon such delivery, shall be deemed to have satisfied its delivery obligations hereunder. The Note Administrative Agent shall promptly deliver to the Holders any such information delivered by the Company in accordance with this Section 7.5.

Section 7.6. Limitation on Disclosure Obligation. The Company shall not be required to disclose the following information pursuant to Section 7.1(b)(i)(x), 7.1(f) or 7.3:

(i) information that the Company determines after consultation with counsel qualified to advise on such matters that, notwithstanding the confidentiality requirements of Section 21, it would be prohibited from disclosing by Applicable Law or regulations without making public disclosure thereof; or

(ii) information that, notwithstanding the confidentiality requirements of Section 21, the Company is prohibited from disclosing by the terms of an obligation of confidentiality contained in any agreement with any non-Affiliate binding upon the Company and not entered into in contemplation of this clause (b), provided that the Company shall use commercially reasonable efforts to obtain consent from the party in whose favor the obligation of confidentiality was made to permit the disclosure of the relevant information and provided further that the Company has received a written opinion of counsel confirming that disclosure of such information without consent from such other contractual party would constitute a breach of such agreement.

Promptly after determining that the Company is not permitted to disclose any information as a result of the limitations described in this Section 7.6, the Company will provide each of the holders with an Officer’s Certificate describing generally the requested information that the Company is prohibited from disclosing pursuant to this Section 7.6 and the circumstances under which the Company is not permitted to disclose such information. Promptly after a request therefor from any Purchaser or Holder that is an Institutional Investor, the Company will provide such Holder with a written opinion of counsel (which may be addressed to the Company) relied upon as to any requested information that the Company is prohibited from disclosing to such holder under circumstances described in this Section 7.6.

 

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SECTION 8. PAYMENT AND PREPAYMENT OF THE NOTES.

Section 8.1. Payment at Maturity. The entire unpaid principal balance of each Note shall be due and payable on the Maturity Date thereof.

Section 8.2. Optional Prepayments with Make-Whole Amount. The Company may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes, in an amount not less than five percent (5%) of the aggregate principal amount of the Notes then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid, together with accrued interest on the amount so prepaid and the Make-Whole Amount determined for the prepayment date with respect to such principal amount. The Company will give each Holder written notice of each optional prepayment under this Section 8.2 not less than ten (10) days and not more than sixty (60) days prior to the date fixed for such prepayment unless the Company and the Required Holders agree to another time period pursuant to Section 18. Each such notice shall specify such date (which shall be a Business Day), the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.5), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation. Two (2) Business Days prior to such prepayment, the Company shall deliver to each Holder a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified prepayment date.

Section 8.3. Prepayment for Tax Reasons. (a) If at any time as a result of a Change in Tax Law (as defined below) the Company is or becomes obligated to make any Additional Payments (as defined below) in respect of any payment of interest on account of any of the Notes in an aggregate amount for all affected Notes equal to 5% or more of the aggregate amount of such interest payment on account of all of the Notes, the Company may give the holders of all affected Notes irrevocable written notice (each, a “Tax Prepayment Notice”) of the prepayment of such affected Notes on a specified prepayment date (which shall be a Business Day not less than thirty (30) days nor more than sixty (60) days after the date of such notice) and the circumstances giving rise to the obligation of the Company to make any Additional Payments and the amount thereof and stating that all of the affected Notes shall be prepaid on the date of such prepayment at 100% of the principal amount so prepaid together with interest accrued thereon to the date of such prepayment, except in the case of an affected Note if the holder of such Note shall, by written notice given to the Company no more than twenty (20) days after receipt of the Tax Prepayment Notice, reject such prepayment of such Note (each, a “Rejection Notice”). The form of Rejection Notice shall also accompany the Tax Prepayment Notice and shall state with respect to each Note covered thereby that execution and delivery thereof by the holder of such Note shall operate as a permanent waiver of such holder’s right to receive the Additional Payments arising as a result of the circumstances described in the Tax Prepayment Notice in respect of all future payments of interest on such Note (but not of such holder’s right to receive any Additional Payments that arise out of circumstances not described in the Tax Prepayment Notice or which exceed the amount of the Additional Payment described in the Tax Prepayment Notice), which waiver shall be binding upon all subsequent transferees of such Note. The Tax Prepayment Notice having been given as aforesaid to each holder of the affected Notes, the principal amount of such Notes together with interest accrued thereon to the date of such prepayment shall become due and payable on such prepayment date, except in the case of Notes the holders of which shall timely give a Rejection Notice as aforesaid.

 

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(b) No prepayment of the Notes pursuant to this Section 8.3 shall affect the obligation of the Company to pay Additional Payments in respect of any payment made on or prior to the date of such prepayment. For purposes of this Section 8.3, any Holder of more than one affected Note may act separately with respect to each affected Note so held (with the effect that a holder of more than one affected Note may accept such offer with respect to one or more affected Notes so held and reject such offer with respect to one or more other affected Notes so held).

(c) The Company may not offer to prepay or prepay Notes pursuant to this Section 8.3 (i) if a Default or Event of Default then exists, (ii) until the Company shall have taken commercially reasonable steps to mitigate the requirement to make the related Additional Payments or (iii) if the obligation to make such Additional Payments directly results or resulted from actions taken by the Company or any Subsidiary (other than actions required to be taken under Applicable Law), and any Tax Prepayment Notice given pursuant to this Section 8.3 shall certify to the foregoing and describe such mitigation steps, if any.

(d) For purposes of this Section 8.3: “Additional Payments” means additional amounts required to be paid to a Holder of any Note pursuant to Section 13 by reason of a Change in Tax Law; and a “Change in Tax Law” means (individually or collectively with one or more prior changes) (i) an amendment to, or change in, any law, treaty, rule or regulation of the Republic of the Marshall Islands or Hong Kong after the date of the Initial Closing, or an amendment to, or change in, an official interpretation or application of such law, treaty, rule or regulation after the date of the Initial Closing, which amendment or change is in force and continuing and meets the opinion and certification requirements described below or (ii) in the case of any other jurisdiction that becomes a Taxing Jurisdiction after the date of the Initial Closing, an amendment to, or change in, any law, treaty, rule or regulation of such jurisdiction, or an amendment to, or change in, an official interpretation or application of such law, treaty, rule or regulation, in any case after such jurisdiction shall have become a Taxing Jurisdiction, which amendment or change is in force and continuing and meets such opinion and certification requirements. No such amendment or change shall constitute a Change in Tax Law unless the same would in the opinion of the Company (which shall be evidenced by an Officer’s Certificate of the Company and supported by a written opinion of counsel having recognized expertise in the field of taxation in the relevant Taxing Jurisdiction, both of which shall be delivered to all Holders of the Notes prior to or concurrently with the Tax Prepayment Notice in respect of such Change in Tax Law) affect the deduction or require the withholding of any Tax imposed by such Taxing Jurisdiction on any payment payable on the Notes.

Section 8.4. Mandatory Prepayments.

(a) Noteholder Sanctions Event.

(i) Upon the Company’s receipt of notice from any Affected Noteholder that a Noteholder Sanctions Event has occurred (which notice shall refer specifically to this Section 8.4(a) and describe in reasonable detail such Noteholder Sanctions Event), the Company shall promptly, and in any event within ten (10) Business Days, make an offer

 

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(the “Sanctions Prepayment Offer”) to prepay the entire unpaid principal amount of Notes held by such Affected Noteholder (the “Affected Notes”), together with interest thereon determined for the prepayment date with respect to such principal amount, which prepayment shall be on a Business Day not less than thirty (30) days and not more than sixty (60) days after the date of the Sanctions Prepayment Offer (the “Sanctions Prepayment Date”). Such Sanctions Prepayment Offer shall provide that such Affected Noteholder notify the Company in writing by a stated date, which date is not later than ten (10) Business Days prior to the stated Sanctions Prepayment Date, of its acceptance or rejection of such prepayment offer. If such Affected Noteholder does not notify the Company as provided above, then the Affected Noteholder shall be deemed to have accepted such offer.

(ii) Subject to the provisions of subparagraphs (iii) and (iv) of this Section 8.4(a), the Company shall prepay on the Sanctions Prepayment Date the entire unpaid principal amount of the Affected Notes held by such Affected Noteholder who has accepted (or has been deemed to have accepted) such prepayment offer (in accordance with subparagraph (a)(i)), together with interest thereon to the Sanctions Prepayment Date with respect to each such Affected Note.

(iii) If a Noteholder Sanctions Event has occurred but the Company and/or its Controlled Entities have taken such action(s) in relation to their activities so as to remedy such Noteholder Sanctions Event prior to the Sanctions Prepayment Date, provided that such Noteholder Sanctions Event is capable of remedy, as certified in writing by the Company and accepted by the Affected Noteholders in their reasonable discretion, then the Company shall no longer be obliged or permitted to prepay such Affected Notes in relation to such Noteholder Sanctions Event. If the Company and/or its Controlled Entities shall undertake any actions to remedy any such Noteholder Sanctions Event, the Company shall keep the holders reasonably and timely informed of such actions and the results thereof.

(iv) If any Affected Noteholder that has given written notice to the Company of its acceptance of (or has been deemed to have accepted) the Company’s prepayment offer in accordance with subparagraph (a) also gives notice to the Company prior to the relevant Sanctions Prepayment Date that it has determined (in its sole discretion) that it requires clearance from any Governmental Authority in order to receive a prepayment pursuant to this Section 8.4, the principal amount of each Note held by such Affected Noteholder, together with interest accrued thereon to the date of prepayment, shall become due and payable on the later to occur of (but in no event later than the Maturity Date of the relevant Note) (i) such Sanctions Prepayment Date and (ii) the date that is ten (10) Business Days after such Affected Noteholder gives notice to the Company that it is entitled to receive a prepayment pursuant to this Section 8.4 (which may include payment to an escrow account designated by such Affected Noteholder to be held in escrow for the benefit of such Affected Noteholder until such Affected Noteholder obtains such clearance from such Governmental Authority), and in any event, any such delay in accordance with the foregoing clause (ii) shall not be deemed to give rise to any Default or Event of Default.

 

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(v) Promptly, and in any event within five (5) Business Days, after the Company’s receipt of notice from any Affected Noteholder that a Noteholder Sanctions Event shall have occurred with respect to such Affected Noteholder, the Company shall forward a copy of such notice to each other Holder.

(vi) The Company shall promptly, and in any event within ten (10) Business Days, give written notice to the Holders after the Company or any Controlled Entity having been notified that (i) its name appears or may in the future appear on a State Sanctions List or (ii) it is in violation of, or is subject to the imposition of sanctions under, any Sanctions, in each case which notice shall describe the facts and circumstances thereof and set forth the action, if any, that the Company or a Controlled Entity proposes to take with respect thereto.

(vii) The foregoing provisions of this Section 8.4 shall be in addition to any rights or remedies available to any Holder that may arise under this Agreement as a result of the occurrence of a Noteholder Sanctions Event; provided, that, if the Notes shall have been declared due and payable pursuant to Section 12.1 as a result of the events, conditions or actions of the Company or its Controlled Entities that gave rise to a Noteholder Sanctions Event, the remedies set forth in Section 12 shall control.

(b) Change of Control.

(i) Upon the occurrence of a Change of Control, the Company shall promptly, and in any event within ten (10) Business Days, make an offer (the “CoC Prepayment Offer”) to prepay the entire unpaid principal amount of each Note, together with interest thereon determined for the prepayment date with respect to such principal amount, which prepayment shall be on a Business Day not less than thirty (30) days and not more than sixty (60) days after the date of the CoC Prepayment Offer (the “CoC Prepayment Date”). Such CoC Prepayment Offer shall require that each Holder notify the Company in writing by a stated date, which date is not later than ten (10) Business Days prior to the stated CoC Prepayment Date, of its acceptance or rejection of such prepayment offer. If a Holder does not notify the Company as provided above, then such holder shall be deemed to have accepted such offer.

(ii) The Company shall prepay on the CoC Prepayment Date the entire unpaid principal amount of the Notes held by each Holder who has accepted (or has been deemed to have accepted) such prepayment offer (in accordance with subparagraph (b)(i)), together with interest thereon to the CoC Prepayment Date with respect to each such Note.

Section 8.5. Allocation of Partial Prepayments. In the case of each partial prepayment of the Notes pursuant to Section 8.2, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment.

 

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Section 8.6. Maturity; Surrender, Etc. In the case of each prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any. From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.

Section 8.7. Purchase of Notes. The Company will not and will not permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except upon the payment or prepayment of the Notes in accordance with this Agreement and the Notes. The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment or prepayment of Notes pursuant to this Agreement and no Notes may be issued in substitution or exchange for any such Notes.

Section 8.8. Make-Whole Amount.

The term “Make-Whole Amount” means, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make-Whole Amount may not in any event be less than zero. For the purposes of determining the Make-Whole Amount, the following terms have the following meanings:

“Applicable Percentage” means 0.50% (50 basis points).

“Called Principal” means, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

“Discounted Value” means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal.

“Reinvestment Yield” means, with respect to the Called Principal of any Note, the sum of the (x) Applicable Percentage plus (y) the yield to maturity implied by the “Ask Yield(s)” reported as of 10:00 a.m. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on-the-run U.S. Treasury securities (“Reported”) having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date. If there are no such U.S. Treasury securities Reported having a maturity equal to such Remaining Average Life, then such implied yield to maturity will be determined by

 

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(a) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between the “Ask Yields” Reported for the applicable most recently issued actively traded on-the-run U.S. Treasury securities with the maturities (1) closest to and greater than such Remaining Average Life and (2) closest to and less than such Remaining Average Life. The Reinvestment Yield shall be rounded to the number of decimal places as appears in the Interest Rate of the applicable Note.

If such yields are not Reported or the yields Reported as of such time are not ascertainable (including by way of interpolation), then “Reinvestment Yield” means, with respect to the Called Principal of any Note, the sum of (x) the Applicable Percentage plus (y) the yield to maturity implied by the U.S. Treasury constant maturity yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for the U.S. Treasury constant maturity having a term equal to the Remaining Average Life of such Called Principal as of such Settlement Date. If there is no such U.S. Treasury constant maturity having a term equal to such Remaining Average Life, such implied yield to maturity will be determined by interpolating linearly between (1) the U.S. Treasury constant maturity so reported with the term closest to and greater than such Remaining Average Life and (2) the U.S. Treasury constant maturity so reported with the term closest to and less than such Remaining Average Life. The Reinvestment Yield shall be rounded to the number of decimal places as appears in the Interest Rate of the applicable Note.

“Remaining Average Life” means, with respect to any Called Principal, the number of years obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years, computed on the basis of a 360-day year comprised of twelve 30-day months and calculated to two decimal places, that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.

“Remaining Scheduled Payments” means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.2 or Section 12.1. For purposes of determining the Remaining Scheduled Payments, the Interest Rate of any Note shall be assumed to be the rate set forth in clause (a) of the definition of Series A Note Interest Rate, Series B Note Interest Rate, Series C Note Interest Rate or Series D Note Interest Rate, as applicable, with respect to such Note at all times.

“Settlement Date” means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

 

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Section 8.9. Payments Due on Non-Business Days. Anything in this Agreement or the Notes to the contrary notwithstanding, (x) except as set forth in clause (y), any payment of interest on any Note that is due on a date that is not a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; and (y) any payment of principal of or Make-Whole Amount on any Note (including principal due on the Maturity Date of such Note) that is due on a date that is not a Business Day shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.

SECTION 9. AFFIRMATIVE COVENANTS.

From the date of this Agreement and thereafter, so long as any of the Notes are outstanding, the Company covenants that:

Section 9.1. Know Your Customer Checks.

(a) If:

(i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;

(ii) any change in the status of an Obligor after the date of this Agreement; or

(iii) a proposed assignment or transfer by a Holder of any of its rights and obligations under this Agreement to a party that is not a Holder prior to such assignment or transfer,

obliges the Holders (or, in the case of Section 9.1(a)(iii), any prospective new Holder) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, the Company shall promptly upon the request of the Note Administrative Agent or any Holder supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Note Administrative Agent (for itself or, in the case of the event described in Section 9.1(a)(iii), on behalf of any prospective new Holder) in order for the Note Administrative Agent, such Holder or, in the case of the event described in Section 9.1(a)(iii), any prospective new Holder to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all Applicable Laws and regulations pursuant to the transactions contemplated in the Financing Documents,

(b) The Company shall promptly upon the request of the Note Administrative Agent or any Holder supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Note Administrative Agent (on behalf of itself or any Holder) or any Holder in order for it to refresh and be satisfied it has complied with all necessary “know your customer” or other similar checks under all Applicable Laws and regulations pursuant to the transactions contemplated in the Financing Documents, provided that the Company shall not be required to comply with any such request more than once in any twelve (12) month period.

 

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Section 9.2. Authorizations. Each Obligor must promptly obtain, maintain and comply, in all material respects, with the terms of any authorization required under any Applicable Law to enable it to perform its obligations under, or for the validity or enforceability of, any Financing Document.

Section 9.3. Compliance with laws. Each Obligor must comply and must procure that the Manager complies in all material respects with all Applicable Laws to which it is subject.

Section 9.4. Pari passu ranking. Each Obligor must ensure that its payment obligations under the Financing Documents rank at least pari passu with all its other present and future unsecured and unsubordinated payment obligations, except for obligations mandatorily preferred by law applying to companies generally.

Section 9.5. Place of business. Each Obligor must:

(a) establish and maintain a place of business in, and shall keep its corporate documents and records at any of, Hong Kong, the Republic of Singapore and Vancouver, British Columbia, or any of them, provided the Note Administrative Agent is satisfied that such establishment in such location does not adversely affect the validity, enforceability or effectiveness of any Financing Document and does not give rise to any requirement under any Applicable Law for a deduction for withholding Tax; and

(b) except with respect to the Guarantor, will not establish, or do anything as a result of which it would be deemed to have, a place of business in any other location other than Hong Kong, the Republic of Singapore or Vancouver without the consent either obtained in accordance with the Requisite Program Debt, subject to Section 24.9, or of the Required Holders (such consent not to be unreasonably withheld or delayed).

Section 9.6. Security. Each Obligor:

(a) will procure that each Mortgage to which it is a party is, and continues to be, registered as a first priority mortgage on the registry of the relevant Approved Flag State;

(b) without prejudice to paragraph (a) will procure that the Mortgages and any other security conferred by it under any Security Document are registered as a first priority interest with the relevant authorities within the period prescribed by the Applicable Laws and are maintained and perfected with the relevant authorities;

(c) will at its own cost, use best efforts to ensure that any Financing Document to which it is a party validly creates the obligations and Security Interests which it purports to create; and

(d) without limiting the generality of paragraph (a) above, will at its own cost, promptly register, file, record or enroll any Financing Document to which it is a party with any court or authority, pay any stamp, registration or similar tax payable in respect of any such Financing Document, give any notice or take any other step which, in the reasonable opinion of the Required Holders, is or has become necessary for any such Financing Document to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.

 

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Section 9.7. Separateness Covenants. Each Obligor (other than the Guarantor) shall conduct its business such that it is a separate and readily identifiable business from, and independent of, any Unrelated Party, and further covenants as follows:

(a) Each Obligor (other than the Guarantor) will observe all corporate formalities necessary to remain a legal entity separate and distinct from, and independent of, each Unrelated Party;

(b) Each Obligor (other than the Guarantor) shall maintain its assets and liabilities separate and distinct from those of each Unrelated Party other than the Company, and will not commingle its assets with those of any Unrelated Party other than the Company;

(c) Each Obligor (other than the Guarantor) shall maintain its accounts and funds separate and distinct from the accounts and funds of each Unrelated Party other than the Company and will receive, deposit, withdraw and disburse its funds separately from any funds of any Unrelated Party other than the Company;

(d) Each Obligor (other than the Guarantor) shall maintain records, books, accounts and minutes separate from those of any Unrelated Party;

(e) Each Obligor (other than the Guarantor) shall conduct its own business in its own name, and not in the name of any Unrelated Party;

(f) Each Obligor (other than the Guarantor) shall maintain an arm’s-length relationship with its Affiliates;

(g) Each Obligor (other than the Guarantor) shall maintain separate financial statements from each Unrelated Party, or if part of a consolidated group, then it will be shown as a separate member of such group;

(h) Each Obligor (other than the Guarantor) shall pay its own liabilities and obligations out of its own funds, whether in the ordinary course of business or not, as a legal entity separate from each Unrelated Party, provided that liabilities and obligations of Vessel Owners may be paid by Company;

(i) Each Obligor (other than the Guarantor) shall use separate invoices and checks from those of each Unrelated Party;

(j) Each Obligor (other than the Guarantor) shall hold itself out as a separate entity, and correct any known misunderstanding regarding its status as a separate entity;

(k) Each Obligor (other than the Guarantor) shall not agree to pay or become liable for any Indebtedness of any Unrelated Party;

 

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(l) Each Obligor (other than the Guarantor) shall not hold out that it is a division of any Unrelated Party, or that any Unrelated Party is a division of it;

(m) Each Obligor (other than the Guarantor) shall not induce any third party to rely on the creditworthiness or any Unrelated Party other than the Guarantor in order that such third party will be induced to contract with it;

(n) Each Obligor (other than the Guarantor) shall not enter into any transactions between it and any Unrelated Party that are more favorable to the Unrelated Party than transactions that the parties would have been able to enter into at such time on an arm’s-length basis with a non-affiliated third party, other than any agreements in effect on the date of the Initial Closing; and

(o) Each Obligor (other than the Guarantor) shall observe all corporate or other procedures required under Applicable Law and under its constitutive documents; and

(p) Each Obligor (other than the Guarantor) shall procure that each of its directors will act in accordance with their duties at law and to exercise independent judgment, and shall not in breach of those duties, act solely in accordance with any direction, opinion, recommendation or instruction of any Unrelated Party in relation to the approval or rejection of, or the exercise of any voting power in relation to, any transaction approval requirements.

Section 9.8. Registration of the Collateral Vessels. Each Obligor shall and shall procure that the Manager shall:

(a) procure and maintain the valid and effective provisional registration of the Collateral Vessels under the flag of an Approved Flag State and shall effect permanent registration of the Collateral Vessel within two months following the Initial Closing, and shall ensure nothing is done or omitted by which the registration of the Collateral Vessels would or might be defeated or imperilled; and

(b) not change the name or port of registration of the Collateral Vessels without prior written notice to the Note Administrative Agent.

Section 9.9. Classification and repair. Each Obligor will, and will procure that the Manager will:

(a) ensure that the Collateral Vessels are surveyed from time to time as required by the Classification Society in which that Collateral Vessel is for the time being entered and maintain and preserve each Collateral Vessel in good working order and repair, ordinary wear and tear excepted, and in any event in such condition as will entitle each to classification free of all recommendations or conditions against class except that are not overdue;

(b) procure that all repairs to or replacement of any damaged, worn or lost parts or equipment shall be effected in such manner (both as regards workmanship and quality of materials) as not to diminish the value of the Collateral Vessels;

 

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(c) unless required to comply with clause (e) below, not remove any material part of any of the Collateral Vessels, or any item of equipment installed on any of the Collateral Vessels unless 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 Security Interest (other than any Permitted Liens) or any right in favor of any Person other than the Security Trustee and becomes on installation on that Collateral Vessel the property of the relevant Vessel Owner and subject to the security constituted by the relevant Security Document(s) provided that such Vessel Owner may install and remove equipment owned by a third party if the equipment can be removed without any risk of material damage to a Collateral Vessel;

(d) ensure that each Collateral Vessel complies in all material respects with all Applicable Laws from time to time applicable to vessels registered under the laws and flag of the relevant Approved Flag State;

(e) not without the prior written consent either obtained in accordance with the Requisite Program Debt, subject to Section 24.9, or of the Required Holders (such consent not to be unreasonably withheld), cause or permit to be made any substantial change in the structure, type or performance characteristics of any of the Collateral Vessels and provide notification of such substantial changes in structure, type or performance characteristics of any of the Collateral Vessels to the Note Administrative Agent and, furthermore, provide confirmation to the Note Administrative Agent that such substantial change in structure, type or performance characteristics of any of the Collateral Vessels shall not result in a breach of any covenant under this Agreement; provided, however, that this Section 9.16(e) shall not apply to (i) modifications of any Collateral Vessel with respect to ballast water treatment systems, bulbous bows, and scrubbers provided that there is no reduction in the value of such Collateral Vessel, and (ii) mandatory modifications to any Collateral Vessel required by Applicable Law from time to time;

(f) maintain a safe, sustainable and socially responsible policy with respect to dismantling of the Collateral Vessels;

(g) ensure that any Collateral Vessel controlled by it or sold to an intermediary with the intention of being scrapped prior to the Discharge of Secured Obligations, is recycled at a recycling yard which conducts its recycling business in a socially and environmentally responsible manner, in accordance with the provisions of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 (the “Hong Kong Convention”) and/or Regulation (EU) No 1257/2013 of the European Parliament and of the Council of 20 November 2013 on ship recycling and amending Regulation (EC) No 1013/2006 and Directive 2009/16/EC, as applicable; and

(h) procure an Inventory of Hazardous Material in respect of the Collateral Vessel owned by it which shall be maintained until the Discharge of Secured Obligations. For the purposes of this clause, “Inventory of Hazardous Material” means a statement of compliance issued by the relevant Classification Society which includes a list of any and all materials known to be potentially hazardous present in a Collateral Vessel’s structure and equipment, also referred to as “List of Hazardous Materials” or “Green Passport”.

 

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Section 9.10. Lawful and safe operation. Each Obligor will, and will procure that the Manager will:

(a) operate each Collateral Vessel and cause each Collateral Vessel to be operated in a manner consistent in all material respects with any and all laws, regulations, treaties and conventions (and all rules and regulations issued thereunder) from time to time applicable to that Collateral Vessel;

(b) not cause or permit any of the Collateral Vessels to trade with, or within the territorial waters of any country in which her safety could reasonably be expected to be imperilled by exposure to piracy, terrorism, arrest, requisition, confiscation, forfeiture, seizure, destruction or condemnation as prize;

(c) not cause or permit any of the Collateral Vessels to be employed in any manner which will or may give rise to any reasonable degree of likelihood that such Collateral Vessel would be liable to requisition, confiscation, forfeiture, seizure, destruction or condemnation as prize;

(d) not cause or permit any of the Collateral Vessels to be employed in any trade or business which is forbidden by international law or is illicit or in knowingly carrying illicit or prohibited goods;

(e) in the event of hostilities in any part of the world (whether war be declared or not) not cause or permit any of the Collateral Vessels to be employed in carrying any contraband goods and that she does not trade in any zone after it has been declared a war zone by any authority or by any of that Collateral Vessel’s war risks Insurers unless that Collateral Vessel’s Insurers shall have confirmed to the Company that such Collateral Vessel is held covered under the Obligatory Insurances for the voyage(s) in question; and

(f) not charter any of the Collateral Vessels or permit any of the Collateral Vessels to serve under any contract of affreightment with any foreign country or national of any foreign country which would be contrary to Applicable Law or would render any Financing Document or the security conferred by the Security Documents unlawful.

Section 9.11. Repair of the Collateral Vessels. No Obligor will and each Obligor will procure that the Manager will not, put any of the Collateral Vessels into the possession of any Person for the purpose of work being done upon her beyond the amount of US$5,000,000 (or equivalent), other than for classification or scheduled dry docking unless such Person shall have given an undertaking to the Note Administrative Agent not to exercise any lien on that Collateral Vessel or Obligatory Insurances for the cost of that work or otherwise.

Section 9.12. Arrests and liabilities. Each Obligor will, and will procure that the Manager will, at all times:

(a) pay and discharge all obligations and liabilities whatsoever which have given or may give rise to liens (other than Permitted Liens) on or claims enforceable against any of the Collateral Vessels and take all reasonable steps to prevent a threatened arrest of any of the Collateral Vessels;

 

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(b) notify the Note Administrative Agent promptly in writing of the levy of either distress on any of the Collateral Vessels or her arrest, detention, seizure, condemnation as prize, compulsory acquisition or requisition for title or use and (save in the case of compulsory acquisition or requisition for title or use) obtain her release within thirty (30) days;

(c) pay and discharge when due all dues, taxes, assessments, governmental charges, fines and penalties lawfully imposed on or in respect of any of the Collateral Vessels or any Obligor except those which are being disputed in good faith by appropriate proceedings (and for the payment of which adequate reserves have been provided or are and continue to be available) and provided that the continued existence of such dues, taxes, assessments, governmental charges, fines or penalties does not give rise to any reasonable degree of likelihood that any of the Collateral Vessels would be liable to arrest, requisition, confiscation, forfeiture, seizure, destruction or condemnation as prize; and

(d) pay and discharge all other obligations and liabilities whatsoever in respect of any of the Collateral Vessels and the Obligatory Insurances except those which are being disputed in good faith by appropriate proceedings (and for the payment of which adequate reserves have been provided or are and continue to be available) and provided that the continued existence of those obligations and liabilities in respect of any of the Collateral Vessels and the Obligatory Insurances does not give rise to any reasonable degree of likelihood that such Collateral Vessel would be liable to arrest, requisition, confiscation, forfeiture, seizure, destruction or condemnation as prize and provided always that each Collateral Vessel remains properly managed and insured at all times in accordance with the terms of the Financing Documents.

Section 9.13. Environment. Each Obligor shall, and shall procure that the Manager shall, at all times:

(a) comply with all applicable Environmental Laws including, without limitation, requirements relating to the establishment of financial responsibility (and shall require that all Environmental Representatives of such Obligor comply with all applicable Environmental Laws and obtain and comply with all required Environmental Approvals, which Environmental Laws and Environmental Approvals relate to any of the Collateral Vessels or her operation or her carriage of cargo); and

(b) promptly upon the occurrence of any of the following events in relation to a Collateral Vessel, provide to the Note Administrative Agent a certificate of an officer of the Company or of the Company’s agents specifying in detail the nature of the event concerned:

(i) the receipt by the Company or any Environmental Representative (where the Company has knowledge of the receipt) of any Environmental Claim; or

(ii) any release of Hazardous Materials.

 

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Section 9.14. Information regarding the Collateral Vessels. Each Obligor shall, and shall procure that the Manager shall, at all times:

(a) promptly notify the Note Administrative Agent of the occurrence of any accident, casualty or other event which has caused or resulted in or may cause or result in a Collateral Vessel being or becoming a Total Loss;

(b) promptly notify the Note Administrative Agent of any material requirement or recommendation made by any insurer or Classification Society or by any competent authority which is not complied with in a timely manner;

(c) if requested by the Note Administrative Agent (not more than once in any calendar year), provide the Note Administrative Agent with a schedule setting out and all intended dry dockings of any of the Collateral Vessels;

(d) promptly notify the Note Administrative Agent of any Environmental Claim being made in connection with any of the Collateral Vessels or its operation;

(e) promptly notify the Note Administrative Agent of any claim for breach of the ISM Code being made in connection with any of the Collateral Vessels or its operation;

(f) promptly notify the Note Administrative Agent of any claim for breach of the ISPS Code being made in connection with any of the Collateral Vessels or its operation;

(g) give to the Note Administrative Agent from time to time on request such information, in sufficient copies (which may take the form of electronic copies) for all the Holders, as the Holders may reasonably request regarding any of the Collateral Vessels, her employment, position and engagements;

(h) provide the Note Administrative Agent with copies of the classification certificate of the Collateral Vessels and of all periodic damage or survey reports on any of the Collateral Vessels which the Note Administrative Agent may reasonably request;

(i) promptly furnish the Note Administrative Agent with full information of any casualty or other accident or damage to any of the Collateral Vessels involving an amount in excess of US$1,500,000 (or equivalent);

(j) give to the Note Administrative Agent and its duly authorized representatives reasonable access to any of the Collateral Vessels for the purpose of conducting on board inspections and/or surveys of such Collateral Vessel provided that (i) the Note Administrative Agent shall co-operate with the Company in respect of the timing for and the place where such surveys take place in order to minimize disruption to the activities of such Collateral Vessel, and (ii) unless a Default or Event of Default has occurred and is continuing or such on board inspection and/or survey demonstrates that a Default or Event of Default is continuing, such inspections and/or surveys shall (x) not occur more than one time during any calendar year and (y) not take place at the expense of the Company; and

(k) if the Required Holders reasonably believe an Event of Default may have occurred and the Required Holders specify such Event of Default, furnish to the Note Administrative Agent from time to time upon reasonable request certified copies of the ship’s log in respect of any of the Collateral Vessels.

 

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Section 9.15. Provision of further information. Each Obligor shall, and shall procure that the Manager shall, as soon as practicable following receipt of a request by the Note Administrative Agent or the Required Holders, provide the Note Administrative Agent with any additional or further financial or other information relating to any of the Collateral Vessels, the Obligatory Insurances or to any other matter relevant to, or to any provision of, a Financing Document which the Note Administrative Agent or the Required Holders may reasonably request. The Company will furnish to each Holder prompt written notice of any change in the information provided in the Beneficial Ownership Certification delivered to such Holder that would result in a change to the list of beneficial owners identified in such certification.

Section 9.16. Management. Each Obligor shall, and shall procure that the Manager shall, ensure that at all times:

(a) the relevant Collateral Vessel is managed by the Manager; and

(b) no Manager shall terminate or materially vary (or agree to materially vary) the terms of its management.

There shall be no change in the Manager or appointment of an alternative manager unless such replacement or alternative manager is a Manager and the terms of its appointment are approved either in accordance with the Requisite Program Debt, subject to Section 24.9, or by the Required Holders, and, simultaneously with its appointment, the management agreement with such manager is assigned to the Security Trustee and the manager enters into a Manager’s Undertaking, each on substantially the same terms as applicable to the previous manager, and such other documents and evidence of the kind referred to in Section 4 in respect of the management arrangements are provided in respect of such replacement management arrangements.

Section 9.17. Charters. Each Vessel Owner shall be entitled to let its Collateral Vessels, pursuant to an Eligible Charter or other Charter, provided always that each Vessel Owner complies with the terms of this Agreement and the other Financing Documents (including the Concentration Limit Requirements) and:

(a) if a Vessel Owner enters into a Charter in respect of a Collateral Vessel, it promptly notifies the Note Administrative Agent thereof;

(b) such Vessel Owner shall either promptly obtain the consent (if required) of the Charterer to the assignment of that Charter pursuant to the General Assignment or ensure that the terms of such Charter permit assignment of that Charter without consent;

(c) such Vessel Owner serves a notice of assignment upon the Charterer pursuant to the terms of the General Assignment and, if such Vessel Owner is party to a Charter with a term that exceeds twelve (12) months (including any extension options) such Vessel Owner shall obtain an acknowledgement from the Charterer (and such Vessel Owner shall use reasonable endeavors to obtain such acknowledgement in a signed writing as opposed to by email, which shall otherwise be acceptable if such Charterer refuses to provide such acknowledgement in a signed writing);

 

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(d) Vessel Owners may only enter into bareboat or demise charters with Eligible Bareboat Charterers, as such term is defined in Schedule A-1, and, prior to entering into any such bareboat or demise charter, the Company shall procure that a Charterer’s Undertaking is provided by the applicable Charterer (unless, after using commercially reasonable efforts to procure such Charterer’s Undertaking, the Company is unable to reach agreement with the relevant Charterer for the provision of such Charterer’s Undertaking and either consent in accordance with the Requisite Program Debt, subject to Section 24.9, is obtained or the Required Holders consent to the foregoing). In addition, the Company shall procure that any such bareboat or demise charter includes an undertaking from the Charterer to the effect that such Charterer will not permit the use or operation of the applicable Collateral Vessel (i) in any country or territory that at such time is the subject of comprehensive Sanctions, or (ii) in any other manner that will result in a violation by any Person, the Finance Parties or any other Person participating in the Program Debt (whether as underwriter, advisor, investor or otherwise) of Sanctions;

(e) Vessel Owners shall procure the prior written consent either in accordance with the Requisite Program Debt, subject to Section 24.9, or of the Required Holders for any charter where more than six (6) months charter hire is paid in advance;

(f) Vessel Owners shall procure the prior written consent either in accordance with Requisite Program Debt, subject to Section 24.9, or of the Required Holders for any arrangement under which Earnings of any Collateral Vessel may be shared with anyone else; and

(g) Vessel Owners shall procure the prior written consent either in accordance with Requisite Program Debt, subject to Section 24.9, or of the Required Holders for any charter with any Affiliate of the Guarantor or which is otherwise than on arm’s length terms.

Section 9.18. Termination of Eligible Charters. Each Obligor shall advise the Note Administrative Agent of any of the following events:

(a) any breach (other than a technical breach which is cured promptly) by the relevant Charterer or the Vessel Owner of the terms of an Eligible Charter of which such Obligor becomes aware;

(b) the termination of an Eligible Charter by either the relevant Vessel Owner or the relevant Charterer; and

(c) as soon as it becomes aware of such event, the occurrence of an insolvency event of the nature referred to in Section 11(f), (g), (h) or (j) in respect of a Charterer.

Section 9.19. Scope of Obligatory Insurances. Each Vessel Owner will, or in the case of a Collateral Vessel subject to a Charter which is a demise or bareboat charter, shall procure that the Charterer of such Collateral Vessel will, in respect of each Collateral Vessel:

(a) at all times for a Collateral Vessel, keep that Collateral Vessel insured in the applicable Required Insurance Amount, in Dollars in the name of the relevant Vessel Owner or in the joint names of the Vessel Owner, the Charterer (if such Collateral Vessel is subject to a Charter which is a demise or bareboat charter), the Manager (except if such Collateral Vessel is subject to a Charter which is a demise or bareboat charter to a Person not a member of the

 

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Guarantor Group), any crewing agents (except if the Collateral Vessel is subject to a Charter which is a demise or bareboat charter to a Person not a member of the Guarantor Group) and (if the Required Holders so require) the Security Trustee (provided that all such Persons, other than the Security Trustee, any third party crewing agents (outside the Guarantor Group) and, in respect of protection and indemnity liability insurances only, any crewing agents within the Guarantor Group, have provided an assignment of their interests in such insurances to the Security Trustee or, in the case of Collateral Vessels that are subject to a demise or bareboat charter, to the relevant Vessel Owner or the Security Trustee (provided further that in such cases, the terms of any assignment of insurances in favor of the relevant Vessel Owner shall expressly provide that the Vessel Owner shall assign its rights thereunder in favor of the Security Trustee, and the relevant Vessel Owner provides such onward assignment and assignment of its own interests in such insurances to the Security Trustee)) without the Holders or the Security Trustee being liable for but having the right to pay premiums, through brokers approved either in accordance with Requisite Program Debt, subject to Section 24.9, or by the Required Holders against fire and usual marine risks (including hull and machinery and Excess Risks) with approved underwriters or insurance companies approved either in accordance with Requisite Program Debt, subject to Section 24.9, or by the Required Holders and by policies in form and content approved either in accordance with Requisite Program Debt, subject to Section 24.9, or by the Required Holders with a deductible which is a Required Deductible Amount or in an amount reasonably satisfactory either pursuant to the Requisite Program Debt, subject to Section 24.9, or to the Required Holders;

(b) at all times for a Collateral Vessel, keep that Collateral Vessel insured in the applicable Required Insurance Amount in the same manner as above against war risks (including risks of mines and all risks, whether or not regarded as war risks, London Blocking and Trapping Addendum and Lost Vessel clause, excepted by the free of capture and seizure clauses in the standard form of Lloyds marine policy) either:

(i) with underwriters or insurance companies approved either in accordance with Requisite Program Debt, subject to Section 24.9, or by the Required Holders and by policies in form and content approved either in accordance with Requisite Program Debt, subject to Section 24.9, or by the Required Holders; or

(ii) by entering the relevant Collateral Vessel in an approved war risks association,

and for the avoidance of doubt, such war risks insurance will include protection and indemnity liability up to at least the applicable Required Insurance Amount, excluding any liability in respect of death, injury or damage to crew, and shall include a deductible which is a Required Deductible Amount or in an amount reasonably satisfactory either pursuant to the Requisite Program Debt, subject to Section 24.9, or to the Required Holders;

(c) at all times for a Collateral Vessel, keep that Collateral Vessel entered in respect of her full value and tonnage in an approved protection and indemnity association against all risks as are normally covered by such protection and indemnity association (including pollution risks and the proportion not recoverable in case of collision under the running down clause inserted in the ordinary Lloyds policies), such cover for pollution risks to be for:

 

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(i) a minimum amount of US$1,000,000,000 or such other amount of cover against pollution risks as shall at any time be comprised in the basic entry of each Collateral Vessel with either a protection and indemnity association which is an acceptable member of either the International Group of protection and indemnity associations (or any successor organization designated either pursuant to the Requisite Program Debt, subject to Section 24.9, or by the Required Holders for this purpose) or the International Group (or such successor organization) itself; or

(ii) if the International Group or any such successor ceases to exist or ceases to provide or arrange any cover for pollution risks (or any supplemental cover for pollution risks over and above that afforded by the basic entry of each Collateral Vessel with its protection and indemnity association), such aggregate amount of cover against pollution risks as shall be available on the open market and by basic entry with a protection and indemnity association for ships of the same type, size, age and flag as each respective Collateral Vessel,

provided that, if any Collateral Vessel has ceased trading or is in lay up and in either case has unloaded all cargo, the level of pollution risks cover afforded by ordinary protection and indemnity cover available through a member of the International Group or such successor organization or, as the case may be, on the open market in such circumstances shall be sufficient for such purposes; and

(d) at all times for a Collateral Vessel, whenever any Collateral Vessel is trading to Japanese territorial waters and when so required either pursuant to the Requisite Program Debt, subject to Section 24.9, or to the Required Holders, maintain in full force and effect social responsibility insurance in respect of the Collateral Vessel with underwriters or insurance companies approved either in accordance with the Requisite Program Debt, subject to Section 24.9, or by the Required Holders and by policies in form and content approved either in accordance with the Requisite Program Debt, subject to Section 24.9, or by the Required Holders, provided always that a first class Vessel Owner or operator of vessels such as the Collateral Vessels would maintain and effect such social responsibility insurance.

Section 9.20. Obligatory Insurances. Without prejudice to its obligations under Section 9.20, each Vessel Owner will or, in the case of a Collateral Vessel subject to a Charter which is a demise or bareboat charter to a Person who is not a member of the Guarantor Group, shall procure that the Charterer of such Collateral Vessel will:

(a) not without the prior consent either in accordance with the Requisite Program Debt, subject to Section 24.9, or by the Required Holders, materially alter any Obligatory Insurance nor make, do, consent or agree to any act or omission which would or might render any Obligatory Insurance invalid, void, voidable or unenforceable or render any sum paid out under any Obligatory Insurance repayable in whole or in part;

(b) not cause or permit any Collateral Vessel to be operated or traded in any way inconsistent with the provisions or warranties of, or implied in, or outside the cover provided by, or which would trigger the exclusion clause (or similar) under, any Obligatory Insurance or to be engaged in any voyage or to carry any cargo not permitted by any Obligatory Insurances without first covering the relevant Collateral Vessel in the relevant Required Insurance Amount and her freights for an amount approved either in accordance with the Requisite Program Debt, subject to Section 24.9, or by the Required Holders in Dollars or another approved currency with the Insurers;

 

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(c) duly and punctually pay when due all premiums, calls, contributions or other sums of money from time to time payable in respect of any Obligatory Insurance;

(d) renew all Obligatory Insurances at least three (3) days before the relevant policies or contracts expire and procure that the approved brokers and/or war risks and protection and indemnity clubs and associations shall promptly confirm in writing to the Note Administrative Agent as and when each renewal is effected;

(e) forthwith upon the effecting of any Obligatory Insurance, give written notice of the insurance to the Note Administrative Agent stating the full particulars (including the dates and amounts) of the insurance, and on request produce the receipts for each sum paid by it pursuant to paragraph (c) above;

(f) not settle, release, compromise or abandon any claim in respect of any Total Loss unless either in accordance with the Requisite Program Debt, subject to Section 24.9, or the Required Holders are satisfied that such release, settlement, compromise or abandonment will not prejudice the interests of the Finance Parties under or in relation to any Financing Document;

(g) arrange for the execution and delivery of such guarantees as may from time to time be required by any protection and indemnity or war risks club or association;

(h) procure that the interest of the Security Trustee is noted on all policies of insurance;

(i) procure that a loss payee provision in the form scheduled to the Insurances Assignment is endorsed on all policies of insurance relating to the Collateral Vessels;

(j) obtain from the relevant insurance brokers and P&I Club letters of undertaking in the forms scheduled to the Insurances Assignments; and

(k) in the event that the Vessel Owner (or, where applicable, the relevant Charterer of a Collateral Vessel which is subject to a Charter which is a demise or bareboat charter to a Person who is not a member of the Guarantor Group) receives payment of any moneys under the Insurance Assignment, save as provided in the loss payable clauses scheduled to the Insurance Assignment, forthwith pay over the same to the Security Trustee and, until paid over, such moneys (to the extent they are held by an Obligor) shall be held in trust for the Security Trustee.

Section 9.21. Power of Purchasers to Insure. If the Obligors (or, where applicable, the relevant Charterer(s) of a Collateral Vessel which is subject to a Charter which is a demise or bareboat charter to a Person who is not a member of the Guarantor Group) fail to effect and keep in force Obligatory Insurances in accordance with this Agreement, it shall be permissible, but not obligatory, for the Required Holders to, or direct the Security Trustee or Note Administrative Agent to, effect and keep in force insurance or insurances in the amounts required under this Agreement and entries in a protection and indemnity association or club and, if it deems necessary or expedient, to insure the war risks upon any Collateral Vessel, and the Company will reimburse the Holders and/or Security Trustee or Note Administrative Agent for the costs of so doing.

 

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Section 9.22. ISM Code. Each Vessel Owner shall, and shall procure that the Manager shall (or, in the case of a Collateral Vessel which is subject to a Charter which is a demise or bareboat charter to a Person who is not a member of the Guarantor Group, shall procure that the Charterer of such Collateral Vessel shall):

(a) at all times be responsible for compliance by itself and by each Collateral Vessel with the ISM Code; and

(b) at all times ensure that:

(i) each Collateral Vessel has a valid Safety Management Certificate (as defined in the ISM Code);

(ii) each Collateral Vessel is subject to a safety management system (as defined in the ISM Code) which complies with the ISM Code; and

(iii) there is a valid Document of Compliance (as defined in the ISM Code), which is held on board the Collateral Vessel,

(c) and shall deliver to the Note Administrative Agent, a copy of a valid Safety Management Certificate and a valid Document of Compliance in respect of the relevant Collateral Vessel, in each case duly certified by an officer of the Company;

(d) promptly notify the Note Administrative Agent of any actual or, upon becoming aware of the same, threatened withdrawal of an applicable Safety Management Certificate or Document of Compliance;

(e) promptly notify the Note Administrative Agent of the identity of the person ashore designated for the purposes of paragraph 4 of the ISM Code and of any change in the identity of that person; and

(f) promptly upon becoming aware of the same notify the Note Administrative Agent of the occurrence of any material accident or major non-conformity (as defined in the ISM Code) requiring action under the ISM Code.

Section 9.23. ISPS Code. Each Obligor shall, and shall procure that the Manager shall, or, in the case of a Collateral Vessel subject to a Charter which is a demise or bareboat charter to a Person who is not a member of the Guarantor Group, shall procure that the Charterer of such Collateral Vessel at all times shall:

(a) comply and be responsible for compliance by itself and by each Collateral Vessel with the ISPS Code; and

 

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(b) ensure that:

(i) each Collateral Vessel has a valid International Ship Security Certificate;

(ii) each Collateral Vessel’s security system and its associated security equipment comply with section 19.1 of Part Appendix 1 of the ISPS Code;

(iii) each Collateral Vessel’s security system and its associated security equipment comply in all respects with the applicable requirements of Chapter XI-2 of SOLAS and Appendix 1 of the ISPS Code; and

(iv) an approved ship security plan is in place.

Section 9.24. Dry Docking. The Guarantor shall ensure that each Obligor shall meet all of that Obligor’s obligations with respect to the cost of scheduled dry docking in relation to the Collateral Vessel owned by such Obligor and that such costs are paid when due except those costs which are being disputed in good faith by appropriate proceedings (and for the payment of which adequate reserves have been provided or are and continue to be available).

Section 9.25. Rating. The Company shall, at its expense, maintain a credit rating (which may be different (including, for the avoidance of doubt, lower) from the credit rating obtained pursuant to Section 4.17), with respect to the Notes from a Nationally Recognized Statistical Rating Organization. The Company shall deliver evidence of such credit rating (or any change thereto) to the holders of the Notes (x) at least once per calendar year and (y) promptly upon any change in such credit rating. The Company shall use commercially reasonable efforts to ensure that such evidence of such credit rating (or any change thereto) (a) sets forth the credit rating for such Notes, (b) refers to the Private Placement Number issued by Standard & Poor’s CUSIP Bureau Service in respect of such Notes, (c) states that the credit rating addresses the likelihood of payment of both the principal and interest of such Notes, (d) does not include any prohibition against sharing such evidence with the SVO or any other regulatory authority having jurisdiction over the holders of the Notes, and (e) includes such other information relating to the credit rating for the Notes as may be required from time to time by the SVO or any other regulatory authority having jurisdiction over the holders of the Notes.

Section 9.26. Taxation.

(a) Each Obligor shall pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:

(i) such payment is being contested in good faith;

(ii) in each case to the extent required by GAAP, adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to the Holders (or the Note Administrative Agent, if applicable) pursuant to Section 7.1(a); and

(iii) such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse Effect.

 

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(b) No Obligor (other than the Guarantor) may change its residence for Tax purposes except with the consent either in accordance with the Requisite Program Debt, subject to Section 24.9, or of the Required Holders, such consent not to be unreasonably withheld.

Section 9.27. Guarantors. The Company will cause each Guarantor to issue and maintain the Program Debt Guarantees for the benefit of the Holders and the other Secured Parties in accordance with the Intercreditor Agreement, except to the extent the release of the Program Debt Guarantee of any Guarantor is permitted under the Intercreditor Agreement.

Section 9.28. Decarbonization Certificate.

(a) The Company must supply to, or procure the supply to, the Note Administrative Agent on or before ten (10) Business Days prior to each Delta Test Date, in sufficient copies (which may take the form of an electronic copy) for the Lead Sustainability Coordinator and all Holders:

(i) all Compliance Data in support of the Decarbonization Certificate to be delivered on the next in time Delta Test Date and such other information required by the Lead Sustainability Coordinator (requested by the Note Administrative Agent or the Required Holders if so directed by or on behalf of the Lead Sustainability Coordinator) in order to populate the Draft DC (defined below) in accordance with sub-section 9.28(b), provided that where such Collateral Vessel is subject to a bareboat or demise charter with an Eligible Bareboat Charterer (as defined in Schedule A-1), the Company shall use reasonable efforts to obtain such Compliance Data from that Eligible Bareboat Charterer (as defined in Schedule A-1). Where the Company is unable to procure such Compliance Data after reasonable efforts, the Lead Sustainability Coordinator shall have reference to corresponding reasonable estimates for the applicable Delta Test Period obtained from a Classification Society at the Company’s cost, in place of any unavailable “Compliance Data” when calculating the AER and/or the Collateral Vessel Delta on the relevant Delta Test Date; and

(ii) the relevant extracts of the provisions of any Qualifying Charter Contract including a Sustainability Linked Charter Mechanism, certified by a Responsible Officer of the Company,

provided always that none of the Note Administrative Agent or the Holders shall publicly disclose such information delivered under this Section 9.28(a) with the identity of the relevant vessel without the prior written consent of the Company. For the avoidance of doubt, such information shall be “Confidential Information” for the purposes of Section 21 (Confidential Information) but the Company acknowledges that, in accordance with the Poseidon Principles, such information will form part of the information published regarding each relevant Holder’s portfolio climate alignment,

and provided further that if the Company fails to comply with the conditions set out in, or deliver when due any of the documents and/or items contemplated by, this Section 9.28, then no Default or Event of Default will result therefrom, and the only consequence shall be a pricing adjustment (if applicable) to the Interest Rate of each Note as otherwise contemplated by this Agreement and such Note.

 

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(b) Within five (5) Business Days after receipt of the Compliance Data and any other information to be provided in accordance with Section 9.35(a) above, the Lead Sustainability Coordinator shall send to the Company, with a copy to the Note Administrative Agent, for distribution to the Holders, a draft (which may be in electronic form), of the populated Decarbonization Certificate to be delivered by the Company for the applicable Delta Test Period, on the next in time Delta Test Date (“Draft DC”).

(c) Subject to any revisions and/or amendments to the Draft DC prepared by the Lead Sustainability Coordinator pursuant to Section 9.28(b) above being prior agreed in writing between the Note Administrative Agent, the Lead Sustainability Coordinator and the Company (the “Amended Draft DC”), on or before two (2) Business Days before such next in time Delta Test Date, the Company must supply to, or procure the supply to, the Note Administrative Agent in sufficient copies (which may take the form of an electronic copy) for the Lead Sustainability Coordinator and all Holders, a completed Decarbonization Certificate for the applicable Delta Test Period, in a form reflective of either the Draft DC or Amended Draft DC, as applicable, and which is signed by a Responsible Officer of the Company.

(d) Notwithstanding anything in this Agreement to the contrary, the Lead Sustainability Coordinator shall not:

(i) have any duty to verify and/or confirm the accuracy of any information, calculations and/or other details (including but not limited to any Compliance Data provided to it in accordance with this Section 9.28) included and/or reflected in any Draft DC, Amended Draft DC and/or Decarbonization Certificate; and

(ii) shall not be liable to the Company or any other party for:

(i) any inaccuracies or errors in such information, calculations and/or other details (including but not limited to transposing any Compliance Data provided to it in accordance with this Section 9.28) included and/or reflected in any Draft DC, Amended Draft DC and/or Decarbonization Certificate; and/or

(ii) any failure to deliver, or delay in delivering, a Draft DC to and/or any failure to agree, or delay in agreeing an Amended DC with, the Company and the Required Holders in accordance with this Section 9.28, if such failure and/or delay in delivering any Draft DC and/or agreeing any Amended DC, arises as a result of, or in connection with, the Company’s (x) failure to deliver and/or delay in delivering, any Compliance Data and/or other information required by the Lead Sustainability Coordinator and/or a Decarbonization Certificate, and/or (y) failure to agree, or delay in agreeing, any Amended DC, in each case in accordance with the terms of this Section 9.28,

and the Company hereby confirms and acknowledges for the benefit of the Lead Sustainability Coordinator, that notwithstanding any of the provisions of this Agreement, the contents of any Decarbonization Certificate, signed by a Responsible Officer of the Company and delivered in accordance with this Section 9.28, shall be verified by the Company only, and shall be true and accurate in all material respects.

 

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SECTION 10. NEGATIVE COVENANTS.

From the date of this Agreement and thereafter, the Company covenants that so long as any of the Notes are outstanding:

Section 10.1. Security Interests. Each Obligor shall not, and each Obligor shall procure that the Manager does not, create or permit to subsist any Security Interest over the Obligatory Insurances or any other Security Assets or any Related Contract other than:

(a) Permitted Liens; or

(b) with the prior written consent either in accordance with the Requisite Program Debt, subject to Section 24.9, or of the Required Holders.

Section 10.2. Merger. No Obligor (other than the Guarantor) shall enter into any amalgamation, demerger, merger or corporate reconstruction (other than intercompany mergers and amalgamations which would not otherwise lead to a contravention of this Agreement or any other Financing Document).

Section 10.3. Special Purpose Covenants. Unless otherwise stated, references to “Obligor” in this Section 10.3 shall be deemed, for this Section only, to exclude the Guarantor:

(a) No Obligor shall have any employees.

(b) No Obligor shall enter into any contract or agreement with any Person, or conduct any business, or otherwise create or incur any liability to any Person, other than in connection with the acquisition, chartering and disposition of the Security Assets, the issuance of the Notes or otherwise as permitted by the Financing Documents and activities ancillary thereto.

(c) No Obligor shall incur any Indebtedness other than (i) Indebtedness normally associated with the day to day operation of the Collateral Vessels, or otherwise in the normal course of business, (ii) Indebtedness under the Related Contracts and the Financing Documents, (iii) Indebtedness under Intra Group Loans and (iv) Additional Secured Debt.

(d) No Obligor shall principally engage in any business other than the direct or indirect ownership, operation and chartering of container vessels and any business incidental or related thereto. The Guarantor shall not principally engage in any business other than the direct or indirect ownership, operation and chartering of seagoing vessels and any business incidental or related thereto.

(e) No Obligor shall own, or otherwise have title to, any deposit account or securities account other than the Charged Accounts.

(f) No Obligor shall create or own any Subsidiary except, in the case of the Company, any Vessel Owner.

 

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(g) No Obligor shall be party to any Intra Group Loan Agreement unless the lender under such Intra Group Loan Agreement has fully subordinated its rights thereunder and provided certain other undertakings in accordance with Section 5.02 of the Intercreditor Agreement and, in no circumstances, shall the maturity date in respect of any such Intra Group Loan occur on or prior to the latest Maturity Date of any Series of Notes.

Section 10.4. Payment of dividends. No Obligor shall pay any dividends or make any other distributions (whether by loan or otherwise) to shareholders unless, (a) under Applicable Law and accounting principles in its jurisdiction of incorporation, it is entitled to pay such dividends or make such other distribution, and (b) no Default or Event of Default has occurred and is continuing.

Section 10.5. Vessel Substitutions. A Vessel Owner may not substitute a Collateral Vessel with one or more vessels (each a “Substitute Vessel”) unless such vessel substitution is completed subject to and in accordance with the following conditions:

(a) the Company provides notice thereof at least five (5) Business Days prior to the date that it wishes the Substitute Vessel to become a Collateral Vessel and the existing Collateral Vessel to be released as a Collateral Vessel;

(b) each Substitute Vessel satisfies the requirements for being a Collateral Vessel hereunder and, on the date on which it becomes a Collateral Vessel, the Note Administrative Agent shall receive all conditions precedent it would be entitled to receive under Section 4 in form and substance satisfactory to the Note Administrative Agent;

(c) the Company provides a Compliance Certificate evidencing such substitution will not give rise to a Default, Event of Default, a Concentration Limit Event, a breach of the Guarantor Financial Covenants, a BB Event or a DSCR Cash Sweep Event, assuming for the purposes of the calculation of such requirements that the substitution had taken place, and no such event shall be continuing; and

(d) such Substitute Vessel shall become a Collateral Vessel on the same date as the existing Collateral Vessel ceases to be a Collateral Vessel for the purposes of the Financing Documents.

Section 10.6. Vessel Dispositions and Removals. A Vessel Owner may not sell or dispose of a Collateral Vessel (a “Vessel Disposition”) unless the Vessel Disposition is completed subject to and in accordance with the following conditions:

(a) the Note Administrative Agent shall have received five (5) Business Days’ prior written notice (a “Disposition Notice”) of any such Vessel Disposition from the Company, and such Disposition Notice shall specify the proposed date of the Vessel Disposition, the relevant Collateral Vessel subject of the Vessel Disposition, the proposed buyer, the purchase price, levels of cash deposit and/or letter of credit provided by or on behalf of the proposed buyer and the anticipated Net Sale Proceeds (it being acknowledged that such information may change);

(b) such Vessel Disposition shall not be permitted if, after giving effect to the application of the proceeds thereof, a Default, Event of Default, Concentration Limit Event, breach of the Guarantor Financial Covenants, BB Event or DSCR Cash Sweep Event would occur;

 

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(c) such Vessel Disposition shall not be permitted at any time when a Default, Event of Default a Concentration Limit Event, a breach of the Guarantor Financial Covenants, a BB Event or a DSCR Cash Sweep Event is continuing, unless such Vessel Disposition or the application of the proceeds thereof would cure such Default, Event of Default, Concentration Limit Event, breach of the Guarantor Financial Covenants, BB Event or DSCR Cash Sweep Event, as applicable; and

(d) the Note Administrative Agent shall have received no later than three (3) Business Days prior to the date of such Vessel Disposition a written confirmation from the Company:

(i) confirming that such Vessel Disposition is proceeding;

(ii) confirming the date on which such Vessel Disposition is scheduled to be completed (it being acknowledged that such date may change);

(iii) incorporating a representation and warranty from the Company in connection with the matters referred to in subsections (b), (c) and (d) above and certifying the BB Ratio and DSCR Ratio following such Vessel Disposition (including the supporting calculations).

(e) Any prepayment of Notes made to effect a cure pursuant to Section 10.6(c) shall be made at par together with accrued interest on the amount so prepaid. Any other optional prepayment of Notes with proceeds of a Vessel Disposition shall be made in accordance with Section 8.2.

In addition, a Vessel Owner may from time to time designate any Collateral Vessel to cease to be a Collateral Vessel, and thereby cause such Collateral Vessel to cease to be subject to the terms and conditions of this Agreement, so long as the Vessel Owner would be permitted pursuant to the above provisions to sell or dispose of such Collateral Vessel in circumstances where the proceeds thereof are zero, assuming that all references to any disposition of such Collateral Vessel pursuant to the above provisions referred instead to its removal as a Collateral Vessel.

Section 10.7. Year end. No Obligor shall change its financial year end except with prior notice to the Note Administrative Agent and, in the case of any Obligor other than the Guarantor, prior consent either in accordance with the Requisite Program Debt, subject to Section 24.9, or of the Required Holders (not to be unreasonably withheld or delayed).

Section 10.8. Related Contracts. Subject to Obligors’ right to release, substitute and dispose of Collateral Vessels, no Obligor shall take any action, enter into any document or agreement or omit to take any action or to enter into any document or agreement which would, or could reasonably be expected to, cause any Obligatory Insurances or Management Agreement to cease to remain in full force and effect and shall use commercially reasonable efforts to procure that each other party to such Related Contract does not take any action, enter into any document or agreement or omit to take any action or to enter into any document or agreement which would, or could reasonably be expected to, cause such Related Contract to cease to remain in full force and effect.

 

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Section 10.9. Financial Covenants.

(a) Borrowing Base Ratio. If on any BB Test Date it is determined that a BB Event has occurred and is continuing, the Company shall, on the next Payment Date, prepay the Notes in accordance with Section 4.02(a)(viii) of the Intercreditor Agreement; provided that the Company shall be permitted to deposit or pledge Additional Security pursuant to Section 10.10 in an amount sufficient to ensure that a BB Event is not continuing after giving effect to such pledge or deposit.

(b) Debt Service Coverage Ratio. On any Test Date a DSCR Cash Sweep Event shall occur if the DSCR Ratio is less than 1.25:1.

(c) Consolidated Tangible Net Worth. The Guarantor must ensure that its Consolidated Tangible Net Worth always equals or exceeds four hundred and fifty million Dollars ($450,000,000).

(d) Gearing. The Guarantor must ensure that its Total Borrowings are always less than 65% of its Total Assets.

(e) Interest and Principal Coverage Ratio. The Guarantor must ensure that its Interest and Principal Coverage Ratio is always greater than or equal to 1.1:1.

(f) Guarantor Cross Default. The Guarantor must ensure its Indebtedness is paid when due (having due regard to any applicable grace period), provided that it shall not be a breach of this subsection if the Guarantor fails to pay its Indebtedness when due but the aggregate amount of such Indebtedness is less than $50,000,000 or its equivalent.

Each of the Guarantor Financial Covenants set forth in Sections 10.9(c) to (f) (inclusive) above shall be tested on each Determination Date by reference to each rolling twelve (12) month Measurement Period, and compliance shall be evidenced in the Compliance Certificates.

Section 10.10. Creation of Additional Security. The value of any additional security which the Company offers to provide pursuant to Section 10.9(a) will only be taken into account for the purposes of determining the BB Ratio if and when:

(a) that additional security, its value and the method of its valuation have been approved either in accordance with the Requisite Program Debt, subject to Section 24.9, or by the Required Holders (and, where required, the holders of any Additional Secured Debt), provided that (i) cash and (ii) any vessel which could be a Substitute Vessel (by meeting the criteria set forth in Section 10.5 and said conditions are met (other than, for the avoidance of doubt, the removal of any Collateral Vessel)), shall be approved additional security;

(b) a Security Interest over that security has been constituted in favor of the Security Trustee in an approved form and manner;

 

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(c) the Financing Documents have been unconditionally amended in such a manner as the Company and either in accordance with the Requisite Program Debt, subject to Section 24.9, or the Required Holders reasonably agree in consequence of that additional security being provided; and

(d) the Note Administrative Agent have received such documents and evidence it may reasonably require in relation to that amendment and additional security including documents and evidence of the type referred to in Section 4 in relation to that amendment and additional security and its execution and (if applicable) registration.

Section 10.11. No Amendment to Related Contracts. No Obligor shall amend or agree to any material amendment to the Obligatory Insurances or the Management Agreements without the prior written consent either in accordance with the Requisite Program Debt, subject to Section 24.9, or of the Required Holders.

Section 10.12. Anti-Corruption Law. (a) Each Obligor shall conduct their business in compliance with Anti-Corruption Laws and Anti-Money Laundering Laws; and (b) each Obligor shall ensure that no proceeds of the Program Debt will be applied in a manner or for a purpose prohibited by Anti-Corruption Laws.

Section 10.13. Sanctions. (a) Each Obligor shall ensure that no proceeds of the Program Debt will be Made Available, directly or indirectly, to or for the benefit of, or used to fund any activities with or business of a Sanctioned Person, or in any country or territory that, at the time of such funding, is the subject of Sanctions, or otherwise applied in a manner or for a purpose prohibited by Sanctions or Anti-Corruption Laws, or which would result in a violation of Sanctions by any Person (including any Person participating in the issuance, offering or funding of the Program Debt, whether as underwriter, advisor, investor, lender, hedge provider, facility or security agent or otherwise); (b) each Obligor shall remain in compliance with all Sanctions and shall continue to implement a policy for Sanctions in line with the requirements in this Agreement; (c) no Obligor nor their respective Subsidiaries shall fund all or part of any repayment required to be made pursuant to Program Debt out of proceeds directly or indirectly derived from any business, activities or transactions which would be prohibited by Sanctions or which would otherwise cause any Person or a Purchaser or Holder to be in breach of Sanctions or to otherwise become the subject or target of Sanctions; (d) no Obligor shall (and shall procure that no Charterer of any Collateral Vessel will) operate, possess, use, dispose of or otherwise deal with, or procure or allow the ownership, operation, possession, use, disposal of or any other dealing with, each Collateral Vessel or part thereof for any purpose or to any Person which would violate or cause any Finance Party to violate, when and as applicable, any Sanctions, any Anti-Money Laundering Law or any Anti-Corruption Law in each case applicable to it; and (e) no Obligor will permit the use or operation of any Collateral Vessel (i) in any country or territory that at such time is the subject of Sanctions, (ii) by a Sanctioned Person, or (iii) in any other manner that will result in a violation by any Person, any of the Finance Parties or any other Person participating in the Program Debt (whether as underwriter, advisor, investor or otherwise) of Sanctions.

 

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Section 10.14. Additional Secured Debt; Revolving Credit Facilities.

(a) The Company shall ensure that the terms of any Additional Secured Debt in the form of a private placement of debt securities shall not, when considered in aggregate, have a weighted average maturity date that is earlier than any existing Program Debt of such type. The weighted average maturity date shall be determined by multiplying the remaining term of each series of additional private placement notes by the aggregate principal amount of such notes and dividing the product of such calculation by the sum of the principal amounts of all such additional private placement notes. The Company shall ensure that any Additional Secured Debt shall not provide for Concentration Limits, a DSCR Ratio, a BB Ratio or Project Debt Guarantees on terms more beneficial to the lenders or holders of such Additional Secured Debt than to the Holders unless this Agreement and the other Financing Documents, as applicable, are amended to provide the same benefit to the Holders.

(b) The Company shall ensure that the aggregate amount of all revolving credit facility commitments under any Secured Debt Documents at any time shall not exceed an amount equal to forty percent (40%) of the aggregate amount of all commitments under all Secured Debt Documents.

SECTION 11. EVENTS OF DEFAULT.

An “Event of Default” shall exist if any of the following conditions or events shall occur or be continuing:

(a) any Obligor shall fail to pay, as applicable, any principal of, interest on, or Make-Whole Amount on any Note or any other amount payable by it under the Financing Documents in the manner required under the Financing Documents unless such non-payment is remedied within three (3) Business Days after the due date;

(b) an Obligor shall fail to comply with any term of Sections 9.19, 9.20(a), (b), (c) and (f), 10.1, 10.3, 10.9(c) to (e), 10.12 and 10.13;

(c) an Obligor shall fail to comply with any other term of the Financing Documents not already referred to in Section 11(a) or 11(b) above (excluding Section 9.28) unless the non-compliance: (i) is capable of remedy; and (ii) is remedied within thirty (30) days (or, in the case of (I) Section 9.1(a), three (3) Business Days and (II) Section 9.25, sixty (60) days) after the earlier of (i) the date on which written notice of such failure is delivered to Guarantor and (ii) any Obligor having knowledge of such failure to comply;

(d) a representation made or repeated by an Obligor in any Financing Document or in any document delivered by or on behalf of an Obligor under any Financing Document is incorrect in any material respect when made or deemed to be repeated, unless the circumstances giving rise to the misrepresentation: (i) are capable of remedy; and (ii) are remedied within thirty (30) days of the earlier of (x) the date on which written notice of such misrepresentation is delivered to Guarantor and (y) any Obligor having knowledge of such misrepresentation;

(e) a BB Event shall occur and continue uncured for more than six (6) months;

 

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(f) any of the following occurs: (i) any Indebtedness of any Obligor is not paid when due (after the expiry of any originally applicable grace period); (ii) any Indebtedness of any Obligor: (A) becomes prematurely due and payable; or (B) is placed on demand; or (C) is capable of being declared by a creditor to be prematurely due and payable or being placed on demand, in each case, as a result of an event of default (howsoever described) and after the expiry of any applicable grace period; or (iii) any commitment for its Indebtedness is cancelled or suspended as a result of an event of default (howsoever described), unless, in the case of the Guarantor, the aggregate amount of such Indebtedness falling within (i) to (iii) above is less than US$50,000,000 or its equivalent;

(g) any of the following occurs in respect of an Obligor: (i) it is deemed for the purposes of any Applicable Law to be, unable to pay its debts as they fall due or insolvent; (ii) it admits its inability to pay its debts as they fall due; (iii) it suspends making payments on any of its debts or announces an intention to do so; or (iv) a moratorium is declared in respect of any of its indebtedness, provided that if a moratorium occurs in respect of an Obligor, the ending of the moratorium will not remedy any Event of Default caused by the moratorium;

(h) any of the following occurs in respect of an Obligor: (i) any step is taken with a view to a moratorium, a composition, assignment or similar arrangement with any of its creditors; (ii) a meeting of its shareholders, directors or other officers is convened for the purpose of considering any resolution to petition for or to file documents with a court for its winding-up, administration or dissolution or any such resolution is passed; (iii) any Person presents a petition, or files documents with a court for its winding-up, administration or dissolution; (iv) an order for its winding-up, administration or dissolution is made; (v) any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, receiver and manager, administrative receiver, administrator or similar officer is appointed in respect of it or any of its assets; (vi) its directors, shareholders or other officers request the appointment of or give notice of their intention to appoint a liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, receiver and manager, administrative receiver, administrator or similar officer; or (vii) any other analogous step or procedure is taken or appointment is made in any jurisdiction, provided that subsections (i) to (vii) above shall not apply to a frivolous or vexatious petition for winding-up presented by a creditor in respect of an Obligor which is being contested in good faith and with due diligence and is discharged or struck out within, in the case of an Obligor (other than Guarantor), thirty (30) days or, in the case of the Guarantor, sixty (60) days;

(i) any attachment, sequestration, distress, execution, enforcement action or analogous event affects any asset(s) of the Obligors and, in relation to the Guarantor only, the same is not discharged or stayed pending appeal within sixty (60) days;

(j) an Obligor suspends, ceases, or threatens to suspend, cease, to carry on all or, in the case of the Guarantor, a material portion of its business, provided that lay-up of a Collateral Vessel or other action in the ordinary course of business shall not constitute a suspension of business by a Vessel Owner for these purposes;

(k) (i) an Obligor (other than Guarantor) fails to comply with or pay any sum due from it under any final judgment or any final order made or given by any court of competent jurisdiction in a non-appealable judgment or order with respect to which the amount in controversy exceeds $25,000 or (ii) Guarantor fails to comply with or pay any sum due from it under any final judgment or any final order made or given by any court of competent jurisdiction in a non-appealable judgment or order with respect to which the amount in controversy exceeds $50,000,000;

 

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(l) the Company ceases to be a direct wholly owned Subsidiary of the Guarantor;

(m) any Obligor (other than the Company or the Guarantor) ceases to be a wholly owned subsidiary of the Company, except in connection with a permitted disposal of a Collateral Vessel in accordance with the Financing Documents;

(n) it is or becomes unlawful for an Obligor to perform any of its material obligations under the Financing Documents or any Related Contract as a result of the act or inaction of an Obligor; or any material provision of a Financing Document is not effective or is alleged by the Company to be ineffective for any reason; or any material provision of a Financing Document is not effective or is alleged by any Party (other than a Finance Party, the Company or the Account Bank) to be ineffective for any reason; or an Obligor repudiates any material provision of a Financing Document or evidences an intention to repudiate any material provision of a Financing Document; or any Party (other than a Finance Party or the Account Bank) repudiates or rescinds any material provision of a Financing Document or evidences an intention to repudiate or rescind any material provision of a Financing Document;

(o) any of the Security Documents ceases to be valid in any material respect or any of those Security Documents creating a Security Interest in favor of the Security Trustee ceases to provide a perfected first priority security interest in favor of the Security Trustee as a result of the act or inaction of an Obligor, provided that no Event of Default shall occur under this provision (i) if (A) the applicable Security Documents relate to certain Collateral Vessels only and the Asset Values of such Collateral Vessels account for no more than seven point five percent (7.5%) of the aggregate Asset Values of all Collateral Vessels, and (B) the Company remedies such circumstances within ten (10) days (and during such period the Company is diligently taking action to remedy such circumstances), or (ii) if, on the date any Security Document to which a Collateral Vessel or the applicable Vessel Owner is subject ceases to be valid in any material respect or any Security Document creating a Security Interest in such Collateral Vessel or the applicable Vessel Owner in favor of the Security Trustee ceases to provide a perfected first priority security interest in favor of the Security Trustee in such Collateral Vessel or the applicable Vessel Owner, such Collateral Vessel is subject to a Vessel Disposition or otherwise ceases to be a Collateral Vessel under and in accordance with the provisions of Sections 10.5 or 10.6;

(p) the registration of any Collateral Vessel at the registry of any Approved Flag State is cancelled or any Collateral Vessel is arrested or otherwise detained and such Collateral Vessel is not released within thirty (30) days, provided that no Event of Default shall occur under this provision (i) if (A) the applicable circumstances relate to certain Collateral Vessels only and the Asset Values of such Collateral Vessels account for no more than ten percent (10%) of the aggregate Asset Values of all Collateral Vessels, and (B) the Company remedies such circumstances within ten (10) days (and during such period the Company is diligently taking action to remedy such circumstances), which period shall, in the case of any arrest or detention be in addition to the thirty (30) day period above, or (ii) if, on the date of the applicable cancellation in the case of any cancellation of the registration of any Collateral Vessel at the registry of any Approved Flag State or prior to the expiry of the thirty (30) days in the case of arrest or detention of a Collateral Vessel, such Collateral Vessel is subject to a Vessel Disposition or otherwise ceases to be a Collateral Vessel under and in accordance with the provisions of Sections 10.5 or 10.6;

 

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(q) any Obligor, or anyone acting through an Obligor, makes any withdrawal from, or instructs an Account Bank to make any payment from, any Charged Account, other than in accordance with Article IV of the Intercreditor Agreement; or

(r) any other event or circumstance occurs which gives rise to a Material Adverse Effect.

SECTION 12. REMEDIES ON DEFAULT, ETC.

Section 12.1. Acceleration. (a) If an Event of Default with respect to the Company described in Section 11(g) or (h) has occurred, all the Notes then outstanding shall automatically become immediately due and payable.

(a) If any other Event of Default has occurred and is continuing, the Required Holders may at any time at its or their option, by notice or notices to the Company, declare all the Notes then outstanding to be immediately due and payable.

(b) If any Event of Default described in Section 11(a) has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by it or them to be immediately due and payable.

Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest thereon (including interest accrued thereon at the Default Rate) and (y) the Make-Whole Amount determined in respect of such principal amount, shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived. The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for) and that the provision for payment of a Make-Whole Amount by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.

Section 12.2. Other Remedies. If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note or Program Debt Guarantee, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.

 

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Section 12.3. Rescission. At any time after any Notes have been declared due and payable pursuant to Section 12.1(b) or (c), the Required Holders, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by Applicable Law) any overdue interest in respect of the Notes, at the Default Rate, (b) neither the Company nor any other Person shall have paid any amounts which have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 18, and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes. No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.

Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies. No right, power or remedy conferred by this Agreement, any Program Debt Guarantee or any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise. Without limiting the obligations of the Company under Section 16, the Company will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including reasonable attorneys’ fees, expenses and disbursements and any Registration Duty.

SECTION 13. TAX INDEMNIFICATION; FATCA INFORMATION.

(a) All payments whatsoever under this Agreement and the Notes will be made by the Company in lawful currency of the United States of America free and clear of, and without liability for withholding or deduction for or on account of, any present or future Taxes of whatever nature imposed or levied by or on behalf of any jurisdiction other than the United States (or any political subdivision or taxing authority of or in such jurisdiction) (hereinafter a “Taxing Jurisdiction”), unless the withholding or deduction of such Tax is compelled by law.

(b) If any deduction or withholding for any Tax of a Taxing Jurisdiction shall at any time be required in respect of any amounts to be paid by the Company under this Agreement or the Notes, the Company will pay to the relevant Taxing Jurisdiction the full amount required to be withheld, deducted or otherwise paid before penalties attach thereto or interest accrues thereon and pay to each holder of a Note such additional amounts as may be necessary in order that the net amounts paid to such holder pursuant to the terms of this Agreement or the Notes after such deduction, withholding or payment (including any required deduction or withholding of Tax on or with respect to such additional amount), shall be not less than the amounts then due and payable to such holder under the terms of this Agreement or the Notes before the assessment of such Tax, provided that no payment of any additional amounts shall be required to be made for or on account of:

 

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(i) any Tax that would not have been imposed but for the existence of any present or former connection between such holder (or a fiduciary, settlor, beneficiary, member of, shareholder of, or possessor of a power over, such holder, if such holder is an estate, trust, partnership or corporation or any Person other than the holder to whom the Notes or any amount payable thereon is attributable for the purposes of such Tax) and the Taxing Jurisdiction, other than the mere holding of the relevant Note or the receipt of payments thereunder or in respect thereof or the exercise of remedies in respect thereof, including such holder (or such other Person described in the above parenthetical) being or having been a citizen or resident thereof, or being or having been present or engaged in trade or business therein or having or having had an establishment, office, fixed base or branch therein, provided that this exclusion shall not apply with respect to a Tax that would not have been imposed but for the Company, after the date of the Initial Closing, opening an office in, moving an office to, reincorporating in, or changing the Taxing Jurisdiction from or through which payments on account of this Agreement or the Notes are made to, the Taxing Jurisdiction imposing the relevant Tax;

(ii) any Tax that would not have been imposed but for the delay or failure by such holder (following a written request by the Company) in the filing with the relevant Taxing Jurisdiction of Forms (as defined below) that are required to be filed by such holder to avoid or reduce such Taxes (including for such purpose any refilings or renewals of filings that may from time to time be required by the relevant Taxing Jurisdiction), provided that the filing of such Forms would not (in such holder’s reasonable judgment) impose any unreasonable burden (in time, resources or otherwise) on such holder or result in any confidential or proprietary income tax return information being revealed, either directly or indirectly, to any Person and such delay or failure could have been lawfully avoided by such holder, and provided further that such holder shall be deemed to have satisfied the requirements of this clause (b)(ii) upon the good faith completion and submission of such Forms (including refilings or renewals of filings) as may be specified in a written request of the Company no later than 60 days after receipt by such holder of such written request (accompanied by copies of such Forms and related instructions, if any, all in the English language or with an English translation thereof); or

(iii) any combination of clauses (i) and (ii) above;

provided further that in no event shall the Company be obligated to pay such additional amounts to any holder (i) not resident in the United States of America or any other jurisdiction in which an original Purchaser is resident for tax purposes on the date of the Closing in which such Purchaser purchases Notes in excess of the amounts that the Company would be obligated to pay if such holder had been a resident of the United States of America or such other jurisdiction, as applicable, for purposes of, and eligible for the benefits of, any double taxation treaty from time to time in effect between the United States of America or such other jurisdiction and the relevant Taxing Jurisdiction or (ii) registered in the name of a nominee if under the law of the relevant Taxing Jurisdiction (or the current regulatory interpretation of such law) securities held in the name of a nominee do not qualify for an exemption from the relevant Tax and the Company shall have given timely notice of such law or interpretation to such holder.

 

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(c) By acceptance of any Note, the holder of such Note agrees, subject to the limitations of clause (b)(ii) above, that it will from time to time with reasonable promptness (x) duly complete and deliver to or as reasonably directed by the Company all such forms, certificates, documents and returns provided to such holder by the Company (collectively, together with instructions for completing the same, “Forms”) required to be filed by or on behalf of such holder in order to avoid or reduce any such Tax pursuant to the provisions of an applicable statute, regulation or administrative practice of the relevant Taxing Jurisdiction or of a tax treaty between the United States of America or any other jurisdiction in which an original Purchaser is resident for tax purposes on the date of the Closing in which such Purchaser purchases Notes and such Taxing Jurisdiction and (y) provide the Company with such information with respect to such holder as the Company may reasonably request in order to complete any such Forms, provided that nothing in this Section 13 shall require any holder to provide information with respect to any such Form or otherwise if in the opinion of such holder such Form or disclosure of information would involve the disclosure of tax return or other information that is confidential or proprietary to such holder, and provided further that each such holder shall be deemed to have complied with its obligation under this paragraph with respect to any Form if such Form shall have been duly completed and delivered by such holder to the Company or mailed to the appropriate taxing authority, whichever is applicable, within 60 days following a written request of the Company (which request shall be accompanied by copies of such Form and English translations of any such Form not in the English language) and, in the case of a transfer of any Note, at least 90 days prior to the relevant interest payment date.

(d) On or before the date of each Closing the Company will furnish each Purchaser purchasing Notes at such Closing with copies of the appropriate Form (and English translation if required as aforesaid) required to be filed in the United States or the applicable Taxing Jurisdiction as of the date of such Closing pursuant to Section 13(b)(ii), if any, and in connection with the transfer of any Note the Company will furnish the transferee of such Note with copies of any Form and English translation then required.

(e) If any payment is made by the Company to or for the account of the holder of any Note after deduction for or on account of any Taxes, and increased payments are made by the Company pursuant to this Section 13, then, if such holder at its sole discretion determines that it has received or been granted a refund of such Taxes, such holder shall, to the extent that it can do so without prejudice to the retention of the amount of such refund, reimburse to the Company such amount as such holder shall, in its sole discretion, determine to be attributable to the relevant Taxes or deduction or withholding. Nothing herein contained shall interfere with the right of the holder of any Note to arrange its tax affairs in whatever manner it thinks fit and, in particular, no holder of any Note shall be under any obligation to claim relief from its corporate profits or similar tax liability in respect of such Tax in priority to any other claims, reliefs, credits or deductions available to it or (other than as set forth in Section 13(b)(ii)) oblige any holder of any Note to disclose any information relating to its tax affairs or any computations in respect thereof.

(f) The Company will furnish the holders of Notes, promptly and in any event within 60 days after the date of any payment by the Company of any Tax in respect of any amounts paid under this Agreement or the Notes, the original tax receipt issued by the relevant taxation or other authorities involved for all amounts paid as aforesaid (or if such original tax receipt is not available or must legally be kept in the possession of the Company, a duly certified copy of the original tax receipt or any other reasonably satisfactory evidence of payment), together with such other documentary evidence with respect to such payments as may be reasonably requested from time to time by any holder of a Note.

 

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(g) If the Company is required by any Applicable Law, as modified by the practice of the taxation or other authority of any relevant Taxing Jurisdiction, to make any deduction or withholding of any Tax in respect of which the Company would be required to pay any additional amount under this Section 13, but for any reason does not make such deduction or withholding with the result that a liability in respect of such Tax is assessed directly against the holder of any Note, and such holder pays such liability, then the Company will promptly reimburse such holder for such payment (including any related interest or penalties to the extent such interest or penalties arise by virtue of a default or delay by the Company) upon demand by such holder accompanied by an official receipt (or a duly certified copy thereof) issued by the taxation or other authority of the relevant Taxing Jurisdiction.

(h) If the Company makes payment to or for the account of any holder of a Note and such holder is entitled to a refund of the Tax to which such payment is attributable upon the making of a filing (other than a Form described above), then such holder shall, as soon as practicable after receiving written request from the Company (which shall specify in reasonable detail and supply the refund forms to be filed) use reasonable efforts to complete and deliver such refund forms to or as directed by the Company, subject, however, to the same limitations with respect to Forms as are set forth above.

(i) The obligations of the Company under this Section 13 shall survive the payment or transfer of any Note and the provisions of this Section 13 shall also apply to successive transferees of the Notes.

(j) By acceptance of any Note, the holder of such Note agrees that such holder will with reasonable promptness duly complete and deliver to the Company, or to such other Person as may be reasonably requested by the Company, from time to time (i) in the case of any such holder that is a United States Person, such holder’s United States tax identification number or other Forms reasonably requested by the Company necessary to establish such holder’s status as a United States Person under FATCA and as may otherwise be necessary for the Company to comply with its obligations under FATCA and (ii) in the case of any such holder that is not a United States Person, such documentation prescribed by Applicable Law (including as prescribed by section 1471(b)(3)(C)(i) of the Code) and such additional documentation as may be necessary for the Company to comply with its obligations under FATCA and to determine that such holder has complied with such holder’s obligations under FATCA or to determine the amount (if any) to deduct and withhold from any such payment made to such holder. Nothing in this Section 13(j) shall require any holder to provide information that is confidential or proprietary to such holder unless the Company is required to obtain such information under FATCA and, in such event, the Company shall treat any such information it receives as confidential.

 

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SECTION 14. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

Section 14.1. Registration of Notes. The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes. The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register. If any holder of one or more Notes is a nominee, then (a) the name and address of the beneficial owner of such Note or Notes shall also be registered in such register as an owner and holder thereof and (b) at any such beneficial owner’s option, either such beneficial owner or its nominee may execute any amendment, waiver or consent pursuant to this Agreement. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary. The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.

Section 14.2. Transfer and Exchange of Notes. Upon surrender of any Note to the Company at the address and to the attention of the designated officer (all as specified in Section 19(a)(iii)), for registration of transfer or exchange (and in the case of a surrender for registration of transfer accompanied by a written instrument of transfer duly executed by the registered holder of such Note or such holder’s attorney duly authorized in writing and accompanied by the relevant name, address and other information for notices of each transferee of such Note or part thereof), within 10 Business Days thereafter, the Company shall execute and deliver, at the Company’s expense (except as provided below), one or more new Notes (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note. Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of the applicable Schedule 1. Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon. The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes. Notes shall not be transferred in denominations of less than $100,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $100,000. Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.3.

Section 14.3. Replacement of Notes. Upon receipt by the Company at the address and to the attention of the designated officer (all as specified in Section 19(a)(iii)) of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and

(i) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser or another holder of a Note with a minimum net worth of at least $100,000,000 or a Qualified Institutional Buyer, such Person’s own unsecured agreement of indemnity shall be deemed to be satisfactory), or

 

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(ii) in the case of mutilation, upon surrender and cancellation thereof,

within 10 Business Days thereafter, the Company at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

Section 14.4. Registrar. Notwithstanding anything to the contrary in this Section 14, the Company may engage a third party registrar (a “Registrar”) to keep the register for the registration and registration of transfers of Notes and to perform the Company’s obligations pursuant to this Section 14 on the Company’s behalf. The Company or the Registrar shall promptly notify each Holder in writing of such engagement, and, following receipt of such notice, if such Holder desires to surrender its Notes, as provided in Section 14.2, or to provide evidence of the ownership of and the loss, theft, destruction or mutilation of its Note, as provided in Section 14.3, or to advise as to any change in its name, address, contact details or payment details, such Holder shall so surrender or so provide evidence to the Registrar in lieu of the Company. On the date of the Initial Closing, the Company hereby engages Citibank, N.A. as Registrar in accordance with this Section 14.4 (and this sentence shall constitute the notice contemplated in the second sentence of this Section 14.4), and Citibank, N.A. hereby accepts such engagement.

SECTION 15. PAYMENTS ON NOTES.

Section 15.1. Place of Payment. Subject to Section 15.2, payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in New York, New York at the principal office of Citibank, N.A. in such jurisdiction. The Company may at any time, by notice to each Holder, change the place of payment of the Notes so long as such place of payment shall be either the principal office of the Company in such jurisdiction or the principal office of a bank or trust company in such jurisdiction.

Section 15.2. Payment by Wire Transfer. So long as any Purchaser or its nominee shall be the holder of any Note, and notwithstanding anything contained in Section 15.1 or in such Note to the contrary, the Company (or the Paying Agent, on the Company’s behalf) will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, interest and all other amounts becoming due hereunder by the method and at the address specified for such purpose below such Purchaser’s name in the Purchaser Schedule, or by such other method or at such other address as such Purchaser shall have from time to time specified to the Company or the Paying Agent in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to Section 15.1. Prior to any sale or other disposition of any Note held by a Purchaser or its nominee, such Purchaser will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company or the Registrar in exchange for a new Note or Notes pursuant to Section 14.2. The Company will afford the benefits of this Section 15.2 to any

 

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Institutional Investor that is the direct or indirect transferee of any Note purchased by a Purchaser under this Agreement and that has made the same agreement relating to such Note as the Purchasers have made in this Section 15.2. The Company may, from time to time, engage a paying agent (a “Paying Agent”) to make payments on behalf of the Company pursuant to this Agreement or the Notes. On the date of the Initial Closing, the Company hereby engages Citibank, N.A. as Paying Agent in accordance with this Section 15.2, and Citibank, N.A. hereby accepts such engagement.

SECTION 16. EXPENSES, ETC.

Section 16.1. Transaction Expenses. Whether or not the transactions contemplated hereby are consummated, the Company will pay all costs and expenses (including reasonable attorneys’ fees of a special counsel and, if reasonably required by the Required Holders or the Note Administrative Agent, as applicable, local or other counsel) incurred by the Purchasers, each other holder of a Note, the Note Administrative Agent, the Registrar and the Paying Agent in connection with such transactions and the Financing Documents and in connection with the preparation, negotiation, execution, delivery and administration of the Financing Documents (including the filing of UCC continuation (or similar) statements), and the administration of and any amendments, waivers or consents under or in respect of any Financing Document (whether or not such amendment, waiver or consent becomes effective), including: (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under any Financing Document or in responding to any subpoena or other legal process or informal investigative demand issued in connection with any Financing Document, or by reason of being a holder of any Note, the Note Administrative Agent, the Registrar or the Paying Agent hereunder, (b) the costs and expenses, including financial advisors’ fees, incurred in connection with the insolvency or bankruptcy of any Obligor or in connection with any work-out or restructuring of the transactions contemplated hereby and/or by the other Financing Documents, and (c) the costs and expenses incurred in connection with the initial filing of this Agreement and all related documents and financial information with the SVO. If required by the NAIC, the Company shall obtain and maintain at its own cost and expense a Legal Entity Identifier (LEI).

The Company will indemnify, pay, and will save and hold each Purchaser, each other holder of a Note, the Note Administrative Agent (and any sub-agent thereof), the Paying Agent, the Registrar and the Lead Sustainability Coordinator harmless from, (i) all claims in respect of any fees, costs or expenses, if any, of brokers and finders (other than those, if any, retained by a Purchaser or other holder in connection with its purchase of the Notes) and the Note Administrative Agent, (ii) any and all wire transfer fees that any bank or other financial institution deducts from any payment under such Note to such holder or otherwise charges to a holder of a Note with respect to a payment under such Note and (iii) any loss, judgment, liability, claim, order, decree, fine, penalty, cost, fee, expense (including reasonable attorneys’ fees and expenses) or obligation resulting from the consummation of the transactions contemplated hereby, including the execution or delivery of this Agreement, any other Financing Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto or their respective obligations hereunder or thereunder, or the use of the proceeds of the Notes by the Company.

 

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Section 16.2. Certain Taxes. The Company agrees to pay all stamp, documentary or similar taxes or fees which may be payable in respect of the execution and delivery or the enforcement of this Agreement or any other Financing Document or the execution and delivery (but not the transfer) or the enforcement of any of the Notes in the United States, the Republic of the Marshall Islands, Hong Kong, Singapore or any other jurisdiction of organization of the Company or any other Obligor or any other jurisdiction where the Company or any other Obligor has assets or of any amendment of, or waiver or consent under or with respect to, this Agreement or any other Financing Document, and to pay any value added tax due and payable in respect of reimbursement of costs and expenses by the Company pursuant to this Section 16, and will save each holder of a Note to the extent permitted by Applicable Law harmless against any loss or liability resulting from nonpayment or delay in payment of any such tax or fee required to be paid by the Company hereunder.

Section 16.3. Survival. The obligations of the Company under this Section 16 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement or any other Financing Document, and the termination of this Agreement.

SECTION 17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by any Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of such Purchaser or any other holder of a Note. All statements contained in any certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement shall be deemed representations and warranties of the Company under this Agreement. Subject to the preceding sentence, this Agreement, the Notes and any Subsidiary Guaranties embody the entire agreement and understanding between each Purchaser, the Note Administrative Agent and the Company and supersede all prior agreements and understandings relating to the subject matter hereof.

SECTION 18. AMENDMENT AND WAIVER.

Section 18.1. Requirements. This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), only with the written consent of the Company and the Required Holders, except that:

(a) no amendment or waiver of any of Sections 1, 2, 3, 4, 5, 6 or 22 hereof, or any defined term (as it is used therein), will be effective as to any Purchaser unless consented to by such Purchaser in writing;

(b) no amendment or waiver may (i) without the written consent of each Purchaser and the holder of each Note at the time outstanding, (A) subject to Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of (x) interest on

 

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the Notes or (y) the Make-Whole Amount, (B) change the percentage of the principal amount of the Notes the holders of which are required to consent to any amendment or waiver, or (C) amend any of Sections 8 (except as set forth in the second sentence of Section 8.2), 11(a), 12, 13, 18, 21 or 24.8, or (ii) without the written consent of each Purchaser of Series B Notes, change the principal amount of the Series B Notes to be purchased hereunder upon satisfaction of the conditions to Closing in respect of such Notes set forth in Section 4;

(c) Section 8.7 may be amended or waived to permit offers to purchase made by the Company or an Affiliate pro rata to the holders of all Notes at the time outstanding upon the same terms and conditions only with the written consent of the Company and the Super-Majority Holders; and

(d) no amendment, waiver or consent shall amend, modify or otherwise affect the rights or duties hereunder or under any other Financing Document of the Note Administrative Agent, the Registrar or the Paying Agent, unless in writing executed by the Note Administrative Agent, the Registrar or the Paying Agent, as applicable.

Section 18.2. Solicitation of Holders of Notes.

(a) Solicitation. The Company will provide each Purchaser and each holder of a Note with sufficient information, sufficiently far in advance of the date a decision is required, to enable such Purchaser and such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes or any Program Debt Guarantee. The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to this Section 18 or any Program Debt Guarantee to each Purchaser and each holder of a Note promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite Purchasers or holders of Notes.

(b) Payment. The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security or provide other credit support, to any holder of a Note as consideration for or as an inducement to the entering into by such holder of any waiver or amendment of any of the terms and provisions hereof or of any Program Debt Guarantee or any Note unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently provided, on the same terms, ratably to each holder of a Note even if such holder did not consent to such waiver or amendment.

(c) Consent in Contemplation of Transfer. Any consent given pursuant to this Section 18 or any Program Debt Guarantee by a holder of a Note that has transferred or has agreed to transfer its Note to (i) the Company, (ii) any Subsidiary or any other Affiliate or (iii) any other Person in connection with, or in anticipation of, such other Person acquiring, making a tender offer for or merging with the Company and/or any of its Affiliates (either pursuant to a waiver under Section 18.1(c) or subsequent to Section 8.7 having been amended pursuant to Section 18.1(c)), in each case in connection with such consent, shall be void and of no force or effect except solely as to such holder, and any amendments effected or waivers granted or to be effected or granted that would not have been or would not be so effected or granted but for such consent (and the consents of all other holders of Notes that were acquired under the same or similar conditions) shall be void and of no force or effect except solely as to such holder.

 

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Section 18.3. Binding Effect, Etc. Any amendment or waiver consented to as provided in this Section 18 or any Program Debt Guarantee applies equally to all Purchasers and holders of Notes and is binding upon them and upon each future holder of any Note and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver. No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon. No course of dealing between the Company and any Purchaser or holder of a Note and no delay in exercising any rights hereunder or under any Note or Program Debt Guarantee shall operate as a waiver of any rights of any Purchaser or holder of such Note.

Section 18.4. Notes Held by Company, Etc. Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement, any Program Debt Guarantee or the Notes, or have directed the taking of any action provided herein or in any Program Debt Guarantee or the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding.

SECTION 19. NOTICES; ENGLISH LANGUAGE.

(a) Except to the extent otherwise provided in Section 7.5, all notices and communications provided for hereunder shall be in writing and sent (w) by email if the recipient has provided and email address in its notice instructions herein (x) by telephonic facsimile if the recipient has provided a facsimile number in its notice instructions herein and if sender on the same day sends a confirming copy of such notice by an internationally recognized commercial delivery service (charges prepaid) or (y) by an internationally recognized commercial delivery service (charges prepaid). Any such notice must be sent:

(i) if to any Purchaser or its nominee, to such Purchaser or nominee at the address specified for such communications in the Purchaser Schedule, or at such other address as such Purchaser or nominee shall have specified to the Company in writing,

(ii) if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Company in writing,

(iii) if to the Company, to it at Unit 2, 16/F., W668 Building, Nos. 668 Castle Peak Road, Cheung Sha Wan, Kowloon, Hong Kong, China, Attention of Chief Financial Officer (Facsimile No. +852 3010 1868; Telephone No. +852 2540 1696; Email: gtalbot@atlascorporation.com and legal@atlascorporation.com), or at such other address as the Company shall have specified to the holder of each Note in writing,

(iv) if to the Note Administrative Agent, to Citibank, N.A., Agency and Trust at 480 Washington Blvd, 30th Floor, Jersey City, New Jersey 07310, United States of America, Attention of Marion O’Connor (Telephone No. +1.201.763.3055; Email: marion.oconnor@citi.com), or at such other address as the Note Administrative Agent shall have specified to the Company and the holder of each Note in writing,

 

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(v) if to the Registrar, to Citibank, N.A., Agency and Trust at 480 Washington Blvd, 30th Floor, Jersey City, New Jersey 07310, United States of America, Attention of Marion O’Connor (Telephone No. +1.201.763.3055; Email: marion.oconnor@citi.com, citinygats@citi.com, and cts.spag@citi.com), or at such other address as the Registrar shall have specified to the Company and the holder of each Note in writing, or

(vi) if to the Paying Agent, to Citibank, N.A., Agency and Trust at 480 Washington Blvd, 30th Floor, Jersey City, New Jersey 07310, United States of America, Attention of Marion O’Connor (Telephone No. +1.201.763.3055; Email: marion.oconnor@citi.com, citinygats@citi.com, and cts.spag@citi.com), or at such other address as the Paying Agent shall have specified to the Company and the holder of each Note in writing.

Notices under this Section 19 will be deemed given only when actually received.

(b) Each document, instrument, financial statement, report, notice or other communication delivered in connection with this Agreement shall be in English or accompanied by an English translation thereof.

(c) This Agreement and the Notes have been prepared and signed in English and the parties hereto agree that the English version hereof and thereof (to the maximum extent permitted by Applicable Law) shall be the only version valid for the purpose of the interpretation and construction hereof and thereof notwithstanding the preparation of any translation into another language hereof or thereof, whether official or otherwise or whether prepared in relation to any proceedings which may be brought in any jurisdiction in respect hereof or thereof.

SECTION 20. REPRODUCTION OF DOCUMENTS.

This Agreement and all documents relating thereto, including (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by any Purchaser at each Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to any Purchaser, may be reproduced by such Purchaser by any photographic, photostatic, electronic, digital, or other similar process and such Purchaser may destroy any original document so reproduced. The Company agrees and stipulates that, to the extent permitted by Applicable Law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by such Purchaser in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. This Section 20 shall not prohibit the Company or any other Holder from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.

 

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SECTION 21. CONFIDENTIAL INFORMATION.

For the purposes of this Section 21, “Confidential Information” means information delivered to any Purchaser by or on behalf of the Company, the Guarantor or any Subsidiary of the Company in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by such Purchaser as being confidential information of the Company, the Guarantor or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to such Purchaser prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such Purchaser or any Person acting on such Purchaser’s behalf, (c) otherwise becomes known to such Purchaser other than through disclosure by the Company, the Guarantor or any Subsidiary of the Company or (d) constitutes financial statements delivered to such Purchaser under Section 7.1 that are otherwise publicly available. Each Purchaser will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by such Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser, provided that such Purchaser may deliver or disclose Confidential Information to (i) its affiliates, and its and their respective directors, officers, employees (legal and contractual), agents, attorneys and trustees (collectively, “Related Persons”) (to the extent such disclosure reasonably relates to the administration of the investment represented by its Notes), (ii) its auditors, financial advisors, investment advisors and other professional advisors and in the case of any Purchaser or holder that is a Related Fund, to its investors and partners and their Related Persons, in each case under this clause (ii), who agree to hold confidential the Confidential Information substantially in accordance with this Section 21, (iii) any other holder of any Note, (iv) any Institutional Investor to which it sells or offers to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by this Section 21), (v) any Person from which it offers to purchase any security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by this Section 21), (vi) any federal or state regulatory authority having jurisdiction over such Purchaser, (vii) the NAIC or the SVO or, in each case, any similar organization, or any nationally recognized rating agency that requires access to information about such Purchaser’s investment portfolio, or (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to such Purchaser, (x) in response to any subpoena or other legal process, (y) in connection with any litigation to which such Purchaser is a party or (z) if an Event of Default has occurred and is continuing, to the extent such Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser’s Notes, this Agreement or any Program Debt Guarantee. Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 21 as though it were a party to this Agreement. On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying this Section 21.

In the event that as a condition to receiving access to information relating to the Company, the Guarantor or the Subsidiaries of the Company in connection with the transactions contemplated by or otherwise pursuant to this Agreement, any Purchaser or holder of a Note is required to agree to a confidentiality undertaking (whether through Intralinks, another secure website, a secure virtual workspace or otherwise) which is different from this Section 21, this Section 21 shall not be amended thereby and, as between such Purchaser or such holder and the Company, this Section 21 shall supersede any such other confidentiality undertaking.

 

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SECTION 22. SUBSTITUTION OF PURCHASER.

Each Purchaser shall have the right to substitute any one of its Affiliates or another Purchaser or any one of such other Purchaser’s Affiliates (a “Substitute Purchaser”) as the purchaser of the Notes that it has agreed to purchase hereunder, by written notice to the Company, which notice shall be signed by both such Purchaser and such Substitute Purchaser, shall contain such Substitute Purchaser’s agreement to be bound by this Agreement and shall contain a confirmation by such Substitute Purchaser of the accuracy with respect to it of the representations set forth in Section 6. Upon receipt of such notice, any reference to such Purchaser in this Agreement (other than in this Section 22), shall be deemed to refer to such Substitute Purchaser in lieu of such original Purchaser. In the event that such Substitute Purchaser is so substituted as a Purchaser hereunder and such Substitute Purchaser thereafter transfers to such original Purchaser all of the Notes then held by such Substitute Purchaser, upon receipt by the Company of notice of such transfer, any reference to such Substitute Purchaser as a “Purchaser” in this Agreement (other than in this Section 22), shall no longer be deemed to refer to such Substitute Purchaser, but shall refer to such original Purchaser, and such original Purchaser shall again have all the rights of an original holder of the Notes under this Agreement.

SECTION 23. NOTE ADMINISTRATIVE AGENT AND SECURITY TRUSTEE.

Section 23.1. Appointment and Authority. Each of the Purchasers hereby irrevocably appoints Citibank, N.A. to act on its behalf as Note Administrative Agent for the limited purposes set forth herein and under the other Financing Documents and authorizes the Note Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Note Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The Note Administrative Agent shall, unless a contrary indication appears in a Financing Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Note Administrative Agent in accordance with any instructions given to it by the Required Holders. The provisions of this Section 23 are solely for the benefit of the Note Administrative Agent and the Purchasers, and the Company shall not have rights as a third-party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Financing Document (or any other similar term) with reference to the Note Administrative Agent 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.

Section 23.2. Exculpatory Provisions.

(a) The Note Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Financing Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Note Administrative Agent:

 

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(i) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or Event of Default has occurred and is continuing;

(ii) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Financing Documents that the Note Administrative Agent is required to exercise as directed in writing by the Required Holders; provided that the Note Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Note Administrative Agent to liability, cost or expense or that is contrary to any Financing Document or Applicable Law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law; and

(iii) shall not, except as expressly set forth herein and in the other Financing Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Company or any of its Affiliates that is communicated to or obtained by the Person serving as the Note Administrative Agent or any of its Affiliates in any capacity.

(b) The Note Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Holders, or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. The Note Administrative Agent shall be deemed not to have knowledge of any Default or Event of Default unless and until notice describing such Default or Event of Default is given to the Note Administrative Agent in writing by the Company or a Holder.

(c) The Note Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Financing Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Financing Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Section 4 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Note Administrative Agent.

(d) Each Holder acknowledges and consents to the fact that (i) the Company has engaged or may engage, as applicable, Citibank, N.A. as the Registrar and/or as Paying Agent for the purposes of, among other things, making payments hereunder or under the Notes on behalf of the Company and (ii) holders of other Program Debt have engaged or may engage, as applicable, Citibank, N.A. as the administrative agent or Additional Debt Representative and Secured Lien Representative in respect of such other Program Debt. Each Holder agrees that none of the engagements set forth in (i) or (ii) above shall modify or have any effect on the Note Administrative Agent’s rights set forth in this Agreement (including this Section 23) or any other Financing Document.

 

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Section 23.3. Reliance by Administrative Agent. The Note Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Note Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the purchase of a Note that by its terms must be fulfilled to the satisfaction of a Holder, the Note Administrative Agent may presume that such condition is satisfactory to such Holder unless the Note Administrative Agent shall have received notice to the contrary from such Holder prior to the purchase of a Note. The Note Administrative Agent may consult with legal counsel (who may be counsel for the Company), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

Section 23.4. Delegation of Duties. The Note Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Financing Document by or through any one or more sub-agents appointed by the Note Administrative Agent. The Note Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Note Administrative Agent and any such sub-agent. The Note Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Note Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

Section 23.5. No Other Duties. Anything herein to the contrary notwithstanding, the Note Administrative Agent shall not have any powers, duties or responsibilities under this Agreement or any of the other Financing Documents, except in its capacity as the Note Administrative Agent hereunder or thereunder.

Section 23.6. Note Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to the Company, the Note Administrative Agent (irrespective of whether the principal of any Note shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Note Administrative Agent shall have made any demand on the Company) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Notes and all other payment obligations of the Company and each other Obligor under this Agreement, the Notes and the other Financing Documents that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Holders and the Note Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Holders and the Note Administrative Agent and their respective agents and counsel and all other amounts due the Holders and the Note Administrative Agent under Section 16) allowed in such judicial proceeding; and

 

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(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Note Administrative Agent and, in the event that the Note Administrative Agent shall consent to the making of such payments directly to any Holder, to pay to the Note Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Note Administrative Agent and its agents and counsel, and any other amounts due the Note Administrative Agent under Section 16.

Section 23.7. Resignation and Removal of Note Administrative Agent.

(a) The Note Administrative Agent may at any time give notice of its resignation to the Purchasers and the Company, or the Note Administrative Agent may be removed at any time, with or without cause, by an act of the Required Holders. Upon receipt of any such notice of resignation or removal, the Required Holders shall have the right, in consultation with the Company, to appoint a successor, which shall be a bank with an office in New York, New York, or an Affiliate of any such bank with an office in New York, New York. If no such successor shall have been so appointed by the Required Holders and shall have accepted such appointment within thirty (30) days after the retiring Note Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Holders) (the “Resignation Effective Date”) or receives notice of removal (the “Removal Effective Date”), then the retiring Note Administrative Agent may (but shall not be obligated to), on behalf of the Purchasers, appoint a successor Note Administrative Agent meeting the qualifications set forth above. Whether or not a successor Note Administrative Agent has been appointed, such resignation or removal of such retiring Note Administrative Agent shall become effective in accordance with such notice on the Resignation Effective Date or Removal Effective Date, as applicable.

(b) With effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (i) the retiring or removed Note Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Financing Documents and (ii) except for any indemnity payments owed to the retiring or removed Note Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Note Administrative Agent shall instead be made by or to each Purchaser directly, until such time, if any, as the Required Holders appoint a successor Note Administrative Agent as provided for above. Upon the Purchasers’ acceptance of a successor’s appointment as Note Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring or removed Note Administrative Agent (other than any rights to indemnity payments owed to the retiring or removed Note Administrative Agent), and the retiring or removed Note Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Financing Documents. The fees payable by the Company to a successor Note Administrative Agent shall be the same as those payable to its

 

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predecessor unless otherwise agreed between the Company and such successor. After the retiring or removed Note Administrative Agent’s resignation or removal hereunder and under the other Financing Documents, the provisions of this Section 23, Section 12.4 and Section 16 shall continue in effect for the benefit of such retiring or removed Note Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Note Administrative Agent was acting as Note Administrative Agent.

Section 23.8. Intercreditor Agreement. Each Purchaser hereby appoints the Note Administrative Agent as its Additional Debt Representative and its Secured Lien Representative for the benefit of the Holders and instructs the Note Administrative Agent to execute and deliver the Intercreditor Joinder and to become a party to the Intercreditor Agreement as an Additional Debt Representative and agrees, for the enforceable benefit of all holders of all existing and future Secured Obligations and each existing and future Secured Lien Representative, to each of the matters set out in paragraphs (1), (2) and (3) of the definition of “Lien Sharing and Priority Confirmation” in the Intercreditor Agreement.

Section 23.9. Non-Reliance. Each Purchaser acknowledges that it has, independently and without reliance upon the Note Administrative Agent or any of its Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Purchaser also acknowledges that it will, independently and without reliance upon the Note Administrative Agent or any of its Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Financing Document or any related agreement or any document furnished hereunder or thereunder.

Section 23.10. No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Financing Document), the Company acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (a) (i) no fiduciary, advisory or agency relationship between the Company and its Subsidiaries and the Note Administrative Agent is intended to be or has been created in respect of the transactions contemplated hereby or by the other Financing Documents, irrespective of whether the Note Administrative Agent has advised or is advising the Company or any Subsidiary on other matters or is acting as Paying Agent or Registrar, and (ii) the arranging and other services regarding this Agreement provided by the Note Administrative Agent are arm’s-length commercial transactions between the Company and its Affiliates, on the one hand, and the Note Administrative Agent, on the other hand; and (b) (i) the Note Administrative Agent is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Company or any of its Affiliates, or any other Person; (ii) the Note Administrative Agent does not have any obligation to the Company or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein, in the other Financing Documents and in the engagement letter between the Note Administrative Agent and the Company with respect to the Note Administrative Agent’s engagement hereunder; and (iii) the Note Administrative Agent and its Affiliates may be engaged, for their own accounts or the accounts of customers, in a broad range

 

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of transactions that involve interests that differ from those of the Company and its Affiliates, and the Note Administrative Agent does not have any obligation to disclose any of such interests to the Company or its Affiliates. To the fullest extent permitted by law, the Company hereby waives and releases any claims that it may have against the Note Administrative Agent with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

Section 23.11. Security Trustee Appointment. Each Purchaser hereby irrevocably (i) appoints UMB Bank, National Association to act on its behalf as Security Trustee under the Intercreditor Agreement in connection with this Agreement, the Notes and the other Financing Documents and (ii) authorizes the Security Trustee to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Security Trustee under or in connection with the Intercreditor Agreement and the other Secured Debt Documents together with any other rights, powers, authorities and discretions as are necessarily incidental thereto.

SECTION 24. MISCELLANEOUS.

Section 24.1. Successors and Assigns. All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including any subsequent holder of a Note) whether so expressed or not, except that, subject to Section 10.2, the Company may not assign or otherwise transfer any of its rights or obligations hereunder or under the Notes without the prior written consent of each holder. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto and their respective successors and assigns permitted hereby) any legal or equitable right, remedy or claim under or by reason of this Agreement.

Section 24.2. Accounting Terms. All accounting terms used herein which are not expressly defined in this Agreement have the meanings respectively given to them in accordance with GAAP. Except as otherwise specifically provided herein, (i) all computations made pursuant to this Agreement shall be made in accordance with GAAP, and (ii) all financial statements shall be prepared in accordance with GAAP. For purposes of determining compliance with this Agreement (including Section 9, Section 10 and the definition of “Indebtedness”), any election by the Company to measure any financial liability using fair value (as permitted by Financial Accounting Standards Board Accounting Standards Codification Topic No. 825-10-25Fair Value Option, International Accounting Standard 39 – Financial Instruments: Recognition and Measurement or any similar accounting standard) shall be disregarded and such determination shall be made as if such election had not been made.

Section 24.3. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.

 

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Section 24.4. Construction, Etc. Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.

Defined terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein) and, for purposes of the Notes, shall also include any such notes issued in substitution therefor pursuant to Section 14, (b) subject to Section 23.1, any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Sections and Schedules shall be construed to refer to Sections of, and Schedules to, this Agreement, and (e) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time.

Section 24.5. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.

Section 24.6. Governing Law. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

Section 24.7. Jurisdiction and Process; Waiver of Jury Trial. (a) The Company irrevocably submits to the non-exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to this Agreement or the Notes. To the fullest extent permitted by Applicable Law, the Company irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

 

73


(a) The Company agrees, to the fullest extent permitted by Applicable Law, that a final judgment in any suit, action or proceeding of the nature referred to in Section 24.7(a) brought in any such court shall be conclusive and binding upon it subject to rights of appeal, as the case may be, and may be enforced in the courts of the United States of America or the State of New York (or any other courts to the jurisdiction of which it or any of its assets is or may be subject) by a suit upon such judgment.

(b) The Company consents to process being served by or on behalf of any Holder in any suit, action or proceeding of the nature referred to in Section 24.7(a) by mailing a copy thereof by registered, certified, priority or express mail, postage prepaid, return receipt or delivery confirmation requested, or delivering a copy thereof in the manner for delivery of notices specified in Section 19, to Puglisi & Associates, at 850 Library Avenue, Suite 204, Newark, Delaware 19711, as its agent for the purpose of accepting service of any process in the United States. The Company agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by Applicable Law, be taken and held to be valid personal service upon and personal delivery to it. Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.

(c) Nothing in this Section 24.7 shall affect the right of any holder of a Note to serve process in any manner permitted by law, or limit any right that the holders of any of the Notes may have to bring proceedings against the Company in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

(d) The Company hereby irrevocably appoints Puglisi & Associates, at 850 Library Avenue, Suite 204, Newark, Delaware 19711. to receive for it, and on its behalf, service of process in the United States.

(E) THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THEREWITH.

Section 24.8. Obligation to Make Payment in Dollars. Any payment on account of an amount that is payable hereunder or under the Notes in Dollars which is made to or for the account of any holder in any other currency, whether as a result of any judgment or order or the enforcement thereof or the realization of any security or the liquidation of the Company, shall constitute a discharge of the obligation of the Company under this Agreement or the Notes only to the extent of the amount of Dollars which such holder could purchase in the foreign exchange markets in London, England, with the amount of such other currency in accordance with normal banking procedures at the rate of exchange prevailing on the London Banking Day following receipt of the payment first referred to above. If the amount of Dollars that could be so purchased is less than the amount of Dollars originally due to such holder, the Company agrees to the fullest extent permitted by law, to indemnify and save harmless such holder from and against all loss or damage arising out of or as a result of such deficiency. This indemnity shall, to the fullest extent permitted by law, constitute an obligation separate and independent from the

 

74


other obligations contained in this Agreement and the Notes, shall give rise to a separate and independent cause of action, shall apply irrespective of any indulgence granted by such holder from time to time and shall continue in full force and effect notwithstanding any judgment or order for a liquidated sum in respect of an amount due hereunder or under the Notes or under any judgment or order. As used herein the term “London Banking Day” shall mean any day other than Saturday or Sunday or a day on which commercial banks are required or authorized by law to be closed in London, England.

Section 24.9. Requisite Program Debt Consents. In respect of any provision of this Agreement which permits the Obligors to act or refrain from acting based upon an approval, consent or similar action under any Requisite Program Debt, if such approval, consent or similar action under one or more of such Program Debt facilities requires approval, consent or similar action to be obtained from the lenders under such facility (and not solely from an agent in respect of such facility), the Company shall deliver written notice of such approval, consent or similar action by the Requisite Program Debt (other than the Notes) to the Note Administrative Agent for further delivery to each Holder. Such notice shall state that the matter to which such notice relates shall be considered approved under this Agreement unless Holders constituting at least the Required Holders object thereto in writing within the period set forth in the immediately following sentence. If, within ten (10) Business Days following delivery of such notice to the Note Administrative Agent (for further delivery to each Holder) the Required Holders deliver to the Company written notice of their objection to such approval, consent or similar action, such specific approval, consent or similar action based upon the Requisite Program Debt shall cease to be effective for purposes of this Agreement (and such specific approval, consent or similar action shall only be effective if ratified by the Required Holders). For the avoidance of doubt, no such notice to or consent from the Holders shall be required in connection with any approval, consent or similar action by the Requisite Program Debt which is based solely upon, and has received, the approval, consent or similar action from the agent or agents under the Program Debt facilities constituting the Requisite Program Debt.

24.10 Electronic Contracting. The parties agree to electronic contracting and signatures with respect to this Agreement, the Guaranty and any Financing Documents, other than the Notes or any documents that are required to be filed or recorded in a jurisdiction or with a registry that does not recognize electronic contracting (“Required Original Documents”). Delivery of an electronic signature to, or a signed copy of, this Agreement and such other documents (other than the Notes or Required Original Documents) by facsimile, email or other electronic transmission shall be fully binding on the parties to the same extent as the delivery of the signed originals and shall be admissible into evidence for all purposes. The words “execution,” “execute”, “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Agreement and such other documents (other than the Notes or Required Original Documents) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Obligors and the Required Holders, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act. Notwithstanding the foregoing, if any

 

75


Purchaser shall request manually signed counterpart signatures to this Agreement or any such document, each Obligor and Financing Party hereby agrees to use its reasonable endeavors to provide such manually signed signature pages as soon as reasonably practicable (but in any event within 30 days after such request or such longer period as the requesting Purchaser, the other Financing Parties and the Obligors may mutually agree).

* * * * *

 

 

76


If you are in agreement with the foregoing, please sign the form of agreement on a counterpart of this Agreement and return it to the Company, whereupon this Agreement shall become a binding agreement between you and the Company.

Very truly yours,

 

SEASPAN HOLDCO III LTD.,

as Issuer

By  

/s/ Graham Talbot

Name: Graham Talbot
Title: Chief Financial Officer

 

[Seaspan - Signature Page to Note Purchase Agreement]


SEASPAN CORPORATION,

as Guarantor

By:  

/s/ Graham Talbot

Name: Graham Talbot
Title: Chief Financial Officer

 

[Seaspan - Signature Page to Note Purchase Agreement]


CITIBANK, N.A.,

as Note Administrative Agent

By:  

/s/ Marion O’Connor

Name: Marion O’Connor
Title: Senior Trust Officer

 

[Seaspan - Signature Page to Note Purchase Agreement]


CITIBANK, N.A.,

as Registrar and Paying Agent

By:  

/s/ Marion O’Connor

Name: Marion O’Connor
Title: Senior Trust Officer

 

[Seaspan - Signature Page to Note Purchase Agreement]


SOCIÉTÉ GÉNÉRALE, HONG

KONG BRANCH,

as Lead Sustainability Coordinator

By:  

/s/ Gwenael Delattre

Name: Gwenael Delattre
Title: Diector, Head of Shipping & Offshore Finance Asia Pacific
By:  

/s/ Ting Zhang

Name: Ting Zhang
Title: Director, Shipping & Offshore Finance

 

[Seaspan - Signature Page to Note Purchase Agreement]


ATHENE ANNUITY AND LIFE

COMPANY

By: Apollo Insurance Solutions Group LP, its investment adviser
By: Apollo Capital Management, L.P., its sub adviser
By: Apollo Capital Management GP, LLC, its General Partner

 

By:  

/s/ Joseph D. Glatt

Name: Joseph D. Glatt
Title: Vice President

 

[Seaspan - Signature Page to Note Purchase Agreement]


VENERABLE INSURANCE AND

ANNUITY COMPANY

By: Apollo Insurance Solutions Group LP, its investment adviser
By: Apollo Capital Management, L.P., its sub adviser
By: Apollo Capital Management GP, LLC, its General Partner

 

By:  

/s/ Joseph D. Glatt

Name: Joseph D. Glatt
Title: Vice President

 

[Seaspan - Signature Page to Note Purchase Agreement]


ATHENE ANNUITY & LIFE ASSURANCE COMPANY
By: Apollo Insurance Solutions Group LP, its investment adviser
By: Apollo Capital Management, L.P., its sub adviser
By: Apollo Capital Management GP, LLC, its General Partner
By:  

/s/ Joseph D. Glatt

Name:   Joseph D. Glatt
Title:   Vice President

 

[Seaspan - Signature Page to Note Purchase Agreement]


AMERICAN EQUITY INVESTMENT LIFE INSURANCE COMPANY
By: Apollo Insurance Solutions Group LP, its investment adviser
By: Apollo Capital Management, L.P., its sub adviser
By: Apollo Capital Management GP, LLC, its General Partner
By:  

/s/ Joseph D. Glatt

Name:   Joseph D. Glatt
Title:   Vice President

 

[Seaspan - Signature Page to Note Purchase Agreement]


MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By: Barings LLC as Investment Adviser
By:  

/s/ James Moore

Name:   James Moore
Title:   Managing Director

 

[Seaspan - Signature Page to Note Purchase Agreement]


C.M. LIFE INSURANCE COMPANY
By: Barings LLC as Investment Adviser
By:  

/s/ James Moore

Name:   James Moore
Title:   Managing Director

 

[Seaspan - Signature Page to Note Purchase Agreement]


MUFG FUND SERVICES (CAYMAN) LIMITED, acting solely in its capacity as trustee of Bright – III Fund, a sub-fund of Global Private Credit Umbrella Unit Trust*
By: Barings LLC as Investment Adviser
By:  

/s/ James Moore

Name:   James Moore
Title:   Managing Director

 

*

Trustee’s obligations in such capacity will be solely the obligations of the Trustee acting on behalf of Bright – III Fund, and that no creditor will have any recourse against any of the Trustee, (or any of its directors, officers or employees) for any claims, losses, damages, liabilities, indemnities or other obligations whatsoever in connection with actions taken by the Trustee, with any recourse to the Trustee limited to the assets of Bright – III Fund.

 

[Seaspan - Signature Page to Note Purchase Agreement]


THE CANADA LIFE ASSURANCE COMPANY
By: /s/ Jason Ward                                                         
Name: Jason Ward
Title: Authorized Signatory
By:  

/s/ Gaurav Mittal

Name:   Gaurav Mittal
Title:   Authorized Signatory

 

[Seaspan - Signature Page to Note Purchase Agreement]


CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By: Cigna Investments, Inc. (authorized agent)
By:  

/s/ Jason Smith

Name:   Jason Smith
Title:   Managing Director

 

[Seaspan - Signature Page to Note Purchase Agreement]


CIGNA HEALTH AND LIFE INSURANCE COMPANY
By: Cigna Investments, Inc. (authorized agent)
By:  

/s/ Jason Smith

Name:   Jason Smith
Title:   Managing Director

 

[Seaspan - Signature Page to Note Purchase Agreement]


EQUITRUST LIFE INSURANCE COMPANY
By:  

/s/ Kenyatta Matheny

Name:   Kenyatta Matheny
Title:   Chief Investment Officer

 

[Seaspan - Signature Page to Note Purchase Agreement]


FARM BUREAU LIFE INSURANCE COMPANY
By:  

/s/ Michael Warmuth

Name:   Michael Warmuth
Title:   Securities Vice President

 

[Seaspan - Signature Page to Note Purchase Agreement]


THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA
By:  

/s/ John W. Kunkle

Name:   John W. Kunkle
Title:   Managing Director

 

[Seaspan - Signature Page to Note Purchase Agreement]


BERKSHIRE LIFE INSURANCE COMPANY OF AMERICA
By:  

/s/ John W. Kunkle

Name:   John W. Kunkle
Title:   Managing Director

 

[Seaspan - Signature Page to Note Purchase Agreement]


INDUSTRIAL ALLIANCE INSURANCE AND FINANCIAL SERVICES INC.
By:  

/s/ Maxime Durivage

Name:   Maxime Durivage
Title:   Director, Private Placement
By:  

/s/ Martin Gauthier

Name:   Martin Gauthier
Title:   Vice-President, General Funds and Fixed Income

 

[Seaspan - Signature Page to Note Purchase Agreement]


INDUSTRIAL ALLIANCE INVESTMENT MANAGEMENT INC.,

in its capacity as administrator of, and on behalf of, FC143 Private Debt Fund

By:  

/s/ Maxime Durivage

Name:   Maxime Durivage
Title:   Principal Vice-President and Chief of Private Placement
By:  

/s/ Martin Gauthier

Name:   Martin Gauthier
Title:   First Vice-President and Chief of General Funds Investment and Fixed Income

 

[Seaspan - Signature Page to Note Purchase Agreement]


THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
By: Macquarie Investment Management Advisers, a series of Macquarie Investment Management Business Trust, Attorney-in-Fact
By:  

/s/ Jamie Chiarieri

Name:   Jamie Chiarieri
Title:   Vice President

 

[Seaspan - Signature Page to Note Purchase Agreement]


LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
By: Macquarie Investment Management Advisers, a series of Macquarie Investment Management Business Trust, Attorney-in-Fact
By:  

/s/ Jamie Chiarieri

Name:   Jamie Chiarieri
Title:   Vice President

 

[Seaspan - Signature Page to Note Purchase Agreement]


USAA PENSION TRUST
By: Macquarie Investment Management Advisers, a series of Macquarie Investment Management Business Trust, Attorney in Fact
By:  

/s/ Jamie Chiarieri

Name:   Jamie Chiarieri
Title:   Vice President

 

[Seaspan - Signature Page to Note Purchase Agreement]


METROPOLITAN LIFE INSURANCE COMPANY
By: MetLife Investment Management, LLC, its Investment Manager
By:  

/s/ Jennifer Potenta

Name:   Jennifer Potenta
Title:   Authorized Signatory

 

[Seaspan - Signature Page to Note Purchase Agreement]


METROPOLITAN TOWER LIFE INSURANCE COMPANY
By: MetLife Investment Management, LLC, its Investment Manager
By:  

/s/ Jennifer Potenta

Name:   Jennifer Potenta
Title:   Authorized Signatory

 

[Seaspan - Signature Page to Note Purchase Agreement]


BRIGHTHOUSE LIFE INSURANCE COMPANY
By: MetLife Investment Management, LLC, its Investment Manager
By:  

/s/ Jennifer Potenta

Name:   Jennifer Potenta
Title:   Authorized Signatory

 

[Seaspan - Signature Page to Note Purchase Agreement]


BALTIMORE LIFE INSURANCE COMPANY
By: MetLife Investment Management, LLC, its Investment Manager
By:  

/s/ Jennifer Potenta

Name:   Jennifer Potenta
Title:   Authorized Signatory

 

[Seaspan - Signature Page to Note Purchase Agreement]


THE SAVINGS BANK MUTUAL LIFE INSURANCE COMPANY OF MASSACHUSETTS
By: MetLife Investment Management, LLC, its Investment Manager
By:  

/s/ Jennifer Potenta

Name:   Jennifer Potenta
Title:   Authorized Signatory

 

[Seaspan - Signature Page to Note Purchase Agreement]


NASSAU LIFE AND ANNUITY COMPANY
By: Nassau Asset Management LLC, its Investment Manager
By:  

/s/ David E. Czerniecki

Name:   David E. Czerniecki
Title:   Chief Investment Officer

 

[Seaspan - Signature Page to Note Purchase Agreement]


NATIONWIDE MUTUAL INSURANCE COMPANY
NATIONWIDE LIFE INSURANCE COMPANY
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
By:  

/s/ Thomas A. Gleason

Name:   Thomas A. Gleason
Title:   Authorized Signatory

 

[Seaspan - Signature Page to Note Purchase Agreement]


THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
By: Northwestern Mutual Investment Management Company, LLC, its investment advisor
By:  

/s/ Howard Stern

Name:   Howard Stern
Title:   Managing Director

 

[Seaspan - Signature Page to Note Purchase Agreement]


THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY FOR ITS GROUP ANNUITY SEPARATE ACCOUNT
By:  

/s/ Howard Stern

Name:   Howard Stern
Title:   Its Authorized Representative

 

[Seaspan - Signature Page to Note Purchase Agreement]


AMERICAN UNITED LIFE INSURANCE COMPANY
By:  

/s/ David M. Weisenburger

Name:   David M. Weisenburger
Title:   VP, Fixed Income Securities

 

[Seaspan - Signature Page to Note Purchase Agreement]


THE STATE LIFE INSURANCE COMPANY
BY: AMERICAN UNITED LIFE INSURANCE COMPANY,
ITS: AGENT
By:  

/s/ David M. Weisenburger

Name:   David M. Weisenburger
Title:   VP, Fixed Income Securities

 

[Seaspan - Signature Page to Note Purchase Agreement]


PACIFIC LIFE INSURANCE COMPANY
By:  

/s/ Cathy L. Schwartz

Name:   Cathy L. Schwartz
Title:   Assistant Vice President

 

[Seaspan - Signature Page to Note Purchase Agreement]


PACIFIC LIFE & ANNUITY COMPANY
By:  

/s/ Matthew A. Levene

Name:   Matthew A. Levene
Title:   Assistant Vice President

 

[Seaspan - Signature Page to Note Purchase Agreement]


PAN-AMERICAN LIFE INSURANCE COMPANY
By:  

/s/ Steven Friedman

Name:   Steve Friedman
Title:   Executive Vice-President
By:  

/s/ Lisa Baudot

Name:   Lisa Baudot
Title:   Sr. Vice-President, Investments

 

[Seaspan - Signature Page to Note Purchase Agreement]


MUTUAL TRUST LIFE INSURANCE COMPANY, A PAN-AMERICAN LIFE INSURANCE GROUP STOCK COMPANY
By:  

/s/ Steven Friedman

Name:   Steve Friedman
Title:   Executive Vice-President
By:  

/s/ Lisa Baudot

Name:   Lisa Baudot
Title:   Sr. Vice-President, Investments

 

[Seaspan - Signature Page to Note Purchase Agreement]


NATIONAL LIFE INSURANCE COMPANY
By:  

/s/ Paul Koenig

Name:   Paul Koenig
Title:   Head of Portfolio Management National Life Group

 

[Seaspan - Signature Page to Note Purchase Agreement]


LIFE INSURANCE COMPANY OF THE SOUTHWEST
By:  

/s/ Paul Koenig

Name:   Paul Koenig
Title:   Head of Portfolio Management National Life Group

 

[Seaspan - Signature Page to Note Purchase Agreement]


SUN LIFE ASSURANCE

COMPANY OF CANADA,

acting through its Bermuda Branch

By:  

/s/ Russell Goldenberg

Name:   Russell Goldenberg
Title:   Senior Director, Private Fixed Income
By:  

/s/ David Fletcher

Name:   David Fletcher
Title:   Managing Director, Private Fixed Income

 

[Seaspan - Signature Page to Note Purchase Agreement]


SUN LIFE ASSURANCE (CANADA) LIMITED
By:  

/s/ Russell Goldenberg

Name:   Russell Goldenberg
Title:   Senior Director, Private Fixed Income
By:  

/s/ David Fletcher

Name:   David Fletcher
Title:   Managing Director, Private Fixed Income

 

[Seaspan - Signature Page to Note Purchase Agreement]


SUN LIFE ASSURANCE COMPANY OF CANADA, acting through its U.S. Branch
By:  

/s/ Jeff Krunnfusz

Name:   Jeff Krunnfusz
Title:   Senior Director
By:  

/s/ Andrew Kleeman

Name:   Andrew Kleeman
Title:   Senior Managing Director

 

[Seaspan - Signature Page to Note Purchase Agreement]


SUN LIFE AND HEALTH INSURANCE COMPANY (U.S.)
By:  

/s/ Jeff Krunnfusz

Name:   Jeff Krunnfusz
Title:   Senior Director
By:  

/s/ Andrew Kleeman

Name:   Andrew Kleeman
Title:   Senior Managing Director

 

[Seaspan - Signature Page to Note Purchase Agreement]


NDG I, LLC,
By: Sun Life Capital Management (U.S.) LLC, its Investment Adviser
By:  

/s/ Jeff Krunnfusz

Name:   Jeff Krunnfusz
Title:   Authorized Signer
By:  

/s/ Andrew Kleeman

Name:   Andrew Kleeman
Title:   Authorized Signer

 

[Seaspan - Signature Page to Note Purchase Agreement]


CSAA INSURANCE EXCHANGE,
By: Sun Life Capital Management (U.S.) LLC, its Investment Adviser
By:  

/s/ Jeff Krunnfusz

Name:   Jeff Krunnfusz
Title:   Authorized Signer
By:  

/s/ Andrew Kleeman

Name:   Andrew Kleeman
Title:   Authorized Signer

 

[Seaspan - Signature Page to Note Purchase Agreement]


SOUTHERN FARM BUREAU LIFE INSURANCE COMPANY
By:  

/s/ David Divine

Name:   David Divine
Title:   Director – Securities Management

 

[Seaspan - Signature Page to Note Purchase Agreement]


THRIVENT FINANCIAL FOR LUTHERAN
By:  

/s/ Christopher Patton

Name: Christopher Patton
Title: Managing Director

 

[Seaspan - Signature Page to Note Purchase Agreement]


CHUBB BERMUDA

INSURANCE LTD.

ANTHEM BLUE CROSS LIFE

AND HEALTH INSURANCE

COMPANY

LOUISIANA HEALTH SERVICE

& INDEMNITY COMPANY

CHUBB EUROPEAN GROUP SE

TEXAS MUTUAL INSURANCE

COMPANY

EMPIRE HEALTHCHOICE

ASSURANCE INC.

CHUBB EUROPEAN

INVESTMENT HOLDINGS SLP

SIMPLY HEALTHCARE

PLANS, INC.

HMO COLORADO, INC.

CONVERGE ASSET

MANAGEMENT LLC

By: Western Asset Management

Company, LLC as Investment

Manager and Agent

By:  

/s/ Adam C. Wright

Name: Adam C. Wright
Title: Manager, U.S. Legal Affairs

 

[Seaspan - Signature Page to Note Purchase Agreement]


CHUBB BERMUDA

INSURANCE LTD.

CHUBB EUROPEAN GROUP SE

TEXAS MUTUAL INSURANCE

COMPANY

EMPIRE HEALTHCHOICE

ASSURANCE INC.

BLUE CROSS OF CALIFORNIA

THE TOA REINSURANCE

COMPANY OF AMERICA

SIMPLY HEALTHCARE

PLANS, INC.

By: Western Asset Management Company, LLC as Investment Manager and Agent
By:  

/s/ Adam C. Wright

Name: Adam C. Wright
Title: Manager, U.S. Legal Affairs

 

[Seaspan - Signature Page to Note Purchase Agreement]


SCHEDULE A

DEFINED TERMS

Capitalized terms used in this Agreement which are not otherwise defined have the meanings assigned to them in the Intercreditor Agreement. As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:

Account Bank” means, in relation to the HK Collection Account, Citibank, N.A., Hong Kong Branch, in relation to any Vessel Owner Account, such bank as may be approved either in accordance with the Requisite Program Debt, subject to Section 24.9, or by the Required Holders, and, in relation to all other Charged Accounts, Bank of Montreal.

Account Charge” means, in relation to each of the Charged Accounts, the first priority fixed charge or pledge over all such accounts given or to be given by the relevant account holder thereof in favor of and in form and substance satisfactory to the Security Trustee.

Additional Secured Debt” has the meaning specified in the Intercreditor Agreement.

Additional Secured Debt Designation” has the meaning specified in the Intercreditor Agreement.

Additional Security” means any Security Interest created pursuant to Section 10.10.

Additional Vessel” means any vessel (other than the Identified Vessels) that meets the Eligibility Criteria.

Advance Rate” shall mean the amount calculated as a percentage of the Asset Value of such Collateral Vessel as follows: (a) in respect of a Collateral Vessel which is subject to an Eligible Charter, (i) where such Collateral Vessel is less than 5 years old, 75%, (ii) where such Collateral Vessel is equal to or more than 5 years old but less than 10 years old, 70%, and (iii) where such Collateral Vessel is equal to or greater than 10 years old, 60%; and (b) in respect of a Collateral Vessel which is not subject to an Eligible Charter, (i) where such Collateral Vessel is less than 10 years old, 60%, and (ii) where such Collateral Vessel is equal to or greater than 10 years old, 50%.

Affected Noteholder is defined within the definition of “Noteholder Sanctions Event.”

Affiliate means, with respect to a specified Person, another Person that directly or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

Agreement means this Note Purchase Agreement, including all Schedules attached to this Agreement.


Annex VI” means Annex VI of the Protocol of 1997 (as subsequently amended from time to time) to amend the International Convention for the Prevention of Pollution from Ships 1973 (Marpol), as modified by the Protocol of 1978 relating thereto.

Anti-Corruption Laws” means all laws, rules, and regulations, as amended, concerning or relating to bribery or corruption, including, without limitation, the U.S. Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 (as amended), and all other applicable anti-bribery and corruption laws, regulations or ordinances in Canada and any other jurisdiction where the Obligors are located or doing business.

Anti-Money Laundering Laws” has the meaning specified in Section 5.21.

Applicable Charter Rate Adjustment” means, for the relevant Interest Rate Period:

(a)    less 0.0125% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Interest Rate Period is equal to or greater than 25% and less than 30%;

(b)    less 0.0150% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Interest Rate Period is equal to or greater than 30% and less than 35%;

(c)    less 0.0175% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Interest Rate Period is equal to or greater than 35% and less than 40%;

(d)    less 0.0200% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Interest Rate Period is equal to or greater than 40% and less than 45%;

(e)    less 0.0225% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Interest Rate Period is equal to or greater than 45% and less than 50%; and

(f)    less 0.0250% per annum where the QCC Target Ratio determined on the QCC Test Date immediately prior to the relevant Interest Rate Period is equal to or greater than 50%.

Applicable Law” means, as to any Person, all applicable Laws binding upon such Person or to which such a Person is subject.

“Applicable Performance Rate Adjustment” means for the relevant Interest Rate Period:

(a)    plus 0.0125% per annum where the Average Collateral Vessel Delta determined on the Delta Test Date immediately prior to the relevant Interest Rate Period is greater than +2.5%; and

 

A-2


(b)    less 0.0125% per annum where the Average Collateral Vessel Delta determined on the Delta Test Date immediately prior to the relevant Interest Rate Period is less than -2.5%.

Approved Flag State” means the Republic of the Marshall Islands, the Commonwealth of the Bahamas, the Republic of Liberia, the Republic of Panama, the Commonwealth of Bermuda, the Cayman Islands, the Isle of Man, Malta, Hong Kong, the United Kingdom, the Commonwealth of Australia, Barbados, Belgium, the Republic of Cyprus, Danish International Ship Register (DIS), Germany, Gibraltar, Greece, Norwegian International Ship Register (NIS), Norway, The Netherlands, Singapore, United States of America and any other flag state approved either in accordance with the Requisite Program Debt, subject to Section 24.9, or by the Required Holders in writing; provided that the total number of Collateral Vessels that may be registered under the United States of America flag at any one time shall be limited to two and such Collateral Vessels shall not be qualified Jones Act vessels.

Approved Valuers” means H. Clarkson & Co. Ltd. and Howe Robinson Partners (or, in either case, such other appraiser as shall have been approved either in accordance with the Requisite Program Debt, subject to Section 24.9, or by the Required Holders).

Asset Value” means, in respect of any Collateral Vessel or Substitute Vessel, the greater of the DCF Value and the Market Value of such Collateral Vessel.

Average Collateral Vessel Delta” means the weighted average Collateral Vessel Delta for all Collateral Vessels when calculated on each Delta Test Date, with the weighting of each Collateral Vessel Delta to be determined by the proportion the Asset Value of the relevant Collateral Vessel multiplied by the Advance Rate for such Collateral Vessel, bears to the Borrowing Base on 31 December of the year immediately prior to the relevant Delta Test Date, calculated by the Lead Sustainability Coordinator with reference to the Decarbonization Certificate and the Compliance Data.

Average Efficiency Ratio” and/or “AER” means, in respect of a single Collateral Vessel, such Collateral Vessel’s average efficiency ratio expressed in unit grams of CO2 per tonne-mile i.e. gCO2/dwt-nm calculated by the Lead Sustainability Coordinator with reference to the Decarbonization Certificate and the Compliance Data, as per the below formula:

 

LOGO

where ci is the carbon emissions for voyage i computed using the fuel consumption with reference to the Decarbonization Certificate and the Compliance Data and carbon factor of each type of fuel set out in MEPC 63/23 Annex 8 – 2012 Guidelines on the Method of Calculation of the Attained Energy Efficient Design Index (EEDI) for New Ships as updated from time to time, is the design deadweight of the Collateral Vessel, and Di is the distance travelled on voyage Di. The AER is computed for all voyages performed by the relevant Collateral Vessel over the applicable 12 calendar months.

BB Event” means, as of any BB Test Date, a BB Ratio in excess of 1.0:1.0x.

 

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BB Ratio” means, at any Test Date, the ratio of (a) the aggregate of (x) the outstanding Program Debt plus (y) the then mark-to-market value of any amounts payable to (but, for the avoidance of any doubt, ignoring amounts payable by) the Hedge Counterparties under any Hedging Agreements and the other Hedge Counterparties under any other Hedging Agreements, to (b) the Borrowing Base.

BB Test Date” means (a) the date of each Closing; (b) each Vessel Substitution Date; (c) each Vessel Disposition Date; and (d) each Determination Date.

Beneficial Ownership Certification” means a certification regarding beneficial ownership or control as required by the Beneficial Ownership Regulation.

Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

Borrowing Base” means, at any Test Date, the aggregate of (a) the latest Asset Value of each Collateral Vessel (other than Excluded Collateral Vessels) multiplied by the Advance Rate applicable to each such Collateral Vessel (provided that, where a Concentration Limit Event has occurred and is continuing, there shall be excluded from the Borrowing Base an amount equal to the Asset Values of Collateral Vessels solely to the extent such Asset Value exceeds the specified percentage thresholds set forth on Schedule A-1); (b) any Additional Security multiplied by such percentage as shall be agreed between the Company and either in accordance with the Requisite Program Debt, subject to Section 24.9, or the Required Holders acting in their reasonable judgment; and (c) the then current balance of any amounts on deposit in the Collateral Account.

Business Day” means any day that is not a Saturday, Sunday or other day that is a legal holiday under the laws of the State of New York, the Province of British Columbia, the Province of Ontario or Hong Kong, or is a day on which banking institutions in such jurisdictions are authorized or required by Law to close.

Capital Lease” means, at any time, a lease with respect to which the lessee is required concurrently to recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP.

Cash Sweep Event” means a BB Event or a DSCR Cash Sweep Event.

Change of Control” means the acquisition, directly or indirectly, by any Person or group of Persons other than a UBO of beneficial ownership of more than 50% of the aggregate outstanding voting power of the equity interests of the Guarantor.

Charged Accounts” means each of: (a) the Collection Account; (b) the Collateral Account; (c) the HK Collection Account; and (d) any Vessel Owner Account, and each such account shall be held with the Account Bank in the name of (in the case of any Vessel Owner Account) the relevant Vessel Owner and (in all other cases) the Company.

Charter” means any charter or contract for the use, employment or operation of a vessel or the carriage of people and/or cargo or the provision of services by or from such vessel.

 

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Charter Guarantees” means in relation to each of the Collateral Vessels, any guarantee provided or to be provided by a Charter Guarantor in relation to a Charterer’s obligations under a Charter and “Charter Guarantee” means any of them.

Charter Guarantor” means any guarantor of a Charterer’s obligations under a Charter.

Charter Termination Fee” means any amount due to the Company or Vessel Owner from a Charterer or Charter Guarantor as a result of or in connection with the termination of a Charter.

Charterer” means any charterer of a Collateral Vessel, and “Charterer” shall mean any of them.

Charterer’s Undertaking” means, in respect of any Collateral Vessel which is subject to a Charter which is a demise or bareboat charter, an undertaking from the Charterer in favor of the Security Trustee in substantially the form set out in Schedule A-3 (or in such other form as the Security Trustee and the Company may agree).

Citi” means Citigroup Global Markets Inc., Citibank, N.A., Citicorp North America, Inc., and/or any of their affiliates as may be appropriate to consummate the transactions contemplated hereby.

Classification Society” means Lloyds Register of Shipping, DNV GL, or any other member of the International Association of Classification Societies.

Closing” is defined in Section 3.

CoC Prepayment Date” is defined in Section 8.4(b).

CoC Prepayment Offer” is defined in Section 8.4(b).

Code means the Internal Revenue Code of 1986 and the rules and regulations promulgated thereunder from time to time.

Collateral Account” means the account of the Company maintained with Bank of Montreal with account number 0004-4624-922.

Collateral Vessel” means each or any, as the context may require, of the Identified Vessels and Additional Vessels which are from time to time Security for the Notes or which are otherwise mortgaged or over which security is granted to secure Program Debt, and any Substitute Vessel that has satisfied the requirements of Section 10.5, but excluding any Collateral Vessel which has been sold and which no longer constitutes part of the Security, in each case in accordance with this Agreement.

Collateral Vessel Delta” means for each Collateral Vessel, the percentage difference between (i) that Collateral Vessel’s Average Efficiency Ratio for the relevant Delta Test Period, and (ii) the then current and applicable IMO Decarbonization Trajectory (for a vessel’s average efficiency ratio) expressed as a positive or negative percentage (+/-)% as calculated by the Lead Sustainability Coordinator with reference to the Decarbonization Certificate and the Compliance Data, on each Delta Test Date per the formula below:

 

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LOGO

where LOGO is the required average efficiency ratio for the ship type and size class for the relevant calendar year period as determined by the related IMO Decarbonization Trajectory. For the sake of clarity, a positive Collateral Vessel Delta means that a Collateral Vessel is misaligned and above the then current and applicable IMO Decarbonization Trajectory (for a vessel’s average efficiency ratio). A zero or negative Collateral Vessel Delta means that a Collateral Vessel is aligned and on or below the then current and applicable IMO Decarbonization Trajectory (for a vessel’s average efficiency ratio).

Collection Account” means the account of the Company maintained with Bank of Montreal with account number 0004-4624-914.

Company” is defined in the first paragraph of this Agreement.

Compliance Certificate” means the form of certificate attached at Schedule 7.2.

Compliance Data” means all information necessary for and/or reasonably requested by the Lead Sustainability Coordinator, in order for the Lead Sustainability Coordinator (i) to calculate the AER and/or the Collateral Vessel Delta, including, without limitation, all ship fuel oil consumption data required to be collected and reported in accordance with Regulation 22A of Annex VI and any Statement of Compliance provided by a Recognized Organization, in each case relating to any relevant Collateral Vessel for the relevant Delta Test Period, and (ii) to verify the existence and suitability of a Sustainability Linked Charter Mechanism in a Qualifying Charter Contract, including, without limitation, the relevant extracts (certified by a Responsible Officer of the Company) of the provisions of the corresponding Qualifying Charter Contracts, in each case relating to any relevant vessel owned by the Guarantor Group for the relevant Delta Test Period.

Concentration Limit Event” has the meaning specified in Schedule A-1.

Concentration Limit Requirements” has the meaning specified in Schedule A-1.

Concentration Test Date” means each of the following dates: (a) each Closing; (b) each Vessel Substitution Date; (c) each Vessel Disposition Date; (d) any date on which a Vessel Owner proposes entering into a new Eligible Charter in respect of a Collateral Vessel; and (e) each other Test Date.

Confidential Information is defined in Section 21.

Consolidated Tangible Net Worth” means, as of any date of determination, for the Guarantor on a consolidated basis, total shareholders’ equity as reported in the most recently delivered balance sheet of the Guarantor and its consolidated Subsidiaries adjusted by:

 

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(a)    adding any subordinated debentures (being convertible debentures and other equity linked instruments which are subordinate to the rights of its unsecured creditors generally and which are akin to equity), mezzanine equity and redeemable shares;

(b)    adding the amount referred to in Schedule 10.9 for the date of such balance sheet (as the same may be adjusted from time to time to reflect the sale of any of the vessels referred to in Schedule 10.9 whether or not they are Collateral Vessels or Collateral Vessels at the date of their sale, following the date of this Agreement);

(c)    deducting any amount attributable to goodwill or any other intangible asset; and

(d)    reflecting any variation in the amount of the issued share capital of the Guarantor since the date of such balance sheet

Contracted Net Cash Flow” means, in respect of any Collateral Vessel and Eligible Charter, the contracted cash flow payable to the applicable Vessel Owner under such Eligible Charter, reduced by US$6,800 per day (which amount shall be escalated on an annual basis at the LTM Rate); provided that such reduction shall not apply to the calculation of the Contracted Net Cash Flow for any Collateral Vessel which is subject to a bareboat or demise charter; and provided further that Contracted Net Cash Flow in respect of any Collateral Vessel and Eligible Charter and any extension period shall be deemed to be zero to the extent that, as of the relevant date, the applicable contracted cash flow payable during such extension period (or part thereof) is uncertain or is not capable of being conclusively calculated. With respect to bareboat charters (in which operating costs are covered by the charterer), the Contracted Net Cash Flow calculation shall not include the daily operating expense reduction.

Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “Controlled” and “Controlling” shall have meanings correlative to the foregoing.

Controlled Entity” means (i) any of the Subsidiaries of the Company and any of their or the Company’s respective Controlled Affiliates and (ii) if the Company has a parent company, such parent company and its Controlled Affiliates.

DCF Value” means the sum of (i) the Present Value of Contracted Net Cash Flow in respect of the relevant Collateral Vessel, plus (ii) the Terminal Value of such Collateral Vessel.

Debtor Relief Laws” means the Bankruptcy Code of the United States of America, 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.

Decarbonization Certificate” means the form of certificate attached as Schedule A-4.

Deeds of Covenants” means, in respect of a Collateral Vessel, the deed of covenants entered into or to be entered into by the relevant Vessel Owner and the Security Trustee collateral to the Mortgage over that Collateral Vessel.

 

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“Default” means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.

Default Rate” means, with respect to any Note, the Interest Rate on such Note plus 2.00% per annum.

Delta Test Date” means June 30, 2022 and thereafter each anniversary of such date in each subsequent calendar year provided that if any such date shall not be a Business Day, the relevant Delta Test Date shall be the immediately succeeding Business Day.

Delta Test Period” means the twelve (12) calendar month period commencing on January 1 ending on December 31 immediately prior to the relevant Delta Test Date.

Determination Date” means the last day of each of February, May, August and November in each year.

Disclosure Documents is defined in Section 5.8.

Dollars” or “$” means lawful currency of the United States of America.

DSCR Cash Sweep Event” means, as of any date of determination, the failure of the DSCR Ratio as of such date to be at least equal to 1.25:1.0x.

DSCR Ratio” means, with respect to the last two fiscal quarters for the Company, the ratio of: (a) EBITDA of the Company for such period, to (b) the aggregate amount of scheduled principal and interest payable (excluding any final payments due at maturity) in respect of Program Debt during the applicable period (whether or not actually paid during such period and disregarding any voluntary prepayments made at the Company’s election in accordance with Section 8.2) payable during such period, plus any amounts paid by the Company during such period under any Hedging Agreements.

Earnings” means, in respect of a Collateral Vessel, all present and future moneys and claims which are earned by or become payable to or for the account of the Company or Vessel Owner in connection with the operation or ownership of that Collateral Vessel and including but not limited to: (a) freights, passage and hire moneys (howsoever earned); (b) remuneration for salvage and towage services; (c) demurrage and detention moneys; (d) all moneys and claims in respect of the requisition for hire of that Collateral Vessel; (e) payments received in respect of any off-hire insurance; (f) payments received pursuant to any Charter Guarantee relating to that Collateral Vessel; and (g) Charter Termination Fees or other payments in respect of the termination of any Charter, including without limitation, pursuant to legal proceedings, arbitration or other settlement arrangements.

EBITDA” means the net income of the Guarantor (on a consolidated basis) or the Company, as applicable, for a Measurement Period as adjusted by:

(a)    adding back taxation;

(b)    adding back Interest Expenses;

 

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(c)    taking no account of any extraordinary item;

(d)    excluding any amount attributable to minority interests;

(e)    adding back depreciation and amortization, including amounts relating to operating leases but with the exception of amortization of dry-docking costs;

(f)    adding back non-cash expenses and deducting non-cash gains, including mark to market on Hedging Agreements and any other financial instruments and stock based compensation;

(g)    adding bareboat charter fees and deducting bareboat related interest income from leasing;

(h)    taking no account of any revaluation of an asset or any loss or gain over book value, whether or not arising on the disposal of an asset (otherwise than in the ordinary course of trading) by the Guarantor or the Company, as applicable, during that Measurement Period; and

(i)    adding proportionate distributions from unconsolidated entities to the Guarantor or the Company, as applicable.

EEOI” means the Energy Efficiency Operational Indicator, developed by the International Maritime Organization in order to allow shipowners to measure the fuel efficiency of a ship in operation.

Eligibility Criteria” means: (a) such vessel shall be a container vessel that satisfies the requirements in respect of a Collateral Vessel set out in this Agreement; (b) such vessel shall be owned by (and not leased or chartered to) a Vessel Owner on the date of the Initial Closing; (c) its inclusion as a Collateral Vessel shall not give rise to a Default, a Concentration Limit Event, a BB Event or a DSCR Cash Sweep Event; and (d) it and any contract of employment or charter for such vessel shall comply with all requirements set out in the Financing Documents as if it was a Collateral Vessel and its owner was a Vessel Owner.

Eligible Charter” shall mean any firm contract for the employment of a Collateral Vessel with a Person other than a member of the Guarantor Group which has a remaining fixed term of not less than 3 months (which shall include any extension options which (i) if at the option of the Charterer, have been exercised, (ii) if at the option of the Vessel Owner, have or have not yet been exercised and (iii) are automatically exercised (without any condition, requirement or other arrangement whereby such extension will not occur other than a determination from the Vessel Owner otherwise)), and shall include any charter providing the applicable Vessel Owner with a termination right.

Environmental Approvals” means any permit, license, approval, ruling, variance, exemption or other authorization required under applicable Environmental Laws.

 

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Environmental Claim” means any and all obligations, liabilities, losses, administrative, regulatory or judicial actions, suits, demands, decrees, claims, liens, judgments, warning notices, notices of noncompliance or violation, investigations, proceedings, removal or remedial actions or orders, or damages (foreseeable and unforeseeable, including consequential and punitive damages), penalties, fees, out-of-pocket costs, expenses, disbursements, attorneys’ or consultants’ fees, arising under or relating in any way to any Environmental Liability, Environmental Laws or any Environmental Approval issued under any such Environmental Laws (hereafter as used in this definition, “Claims”), including (a) any and all Claims by any Governmental Authority for enforcement, clean-up, removal, response, remedial or other actions or damages arising under or pursuant to any applicable Environmental Laws, and (b) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from or relating to Hazardous Materials or arising from alleged injury or threat of injury to health, safety or the environment.

Environmental Laws” means any and all federal, state, local, and foreign statutes, Laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions, including all common law, relating to pollution or the protection of health, safety or the environment or the release of any materials into the environment, including those related to Hazardous Materials, air emissions, discharges to waste or public systems and health and safety matters.

Environmental Liability” means any liability or obligation, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), directly or indirectly, resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment, disposal or permitting or arranging for the disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

Environmental Representative” means each Vessel Owner and the Manager together with their respective employees and all of those persons for whom such Vessel Owner or the Manager is responsible under any Applicable Law in respect of any activities undertaken in relation to any of the Collateral Vessels.

ERISA” means the Employee Retirement Income Security Act of 1974 and the rules and regulations promulgated thereunder from time to time in effect.

ERISA Affiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with the Company under section 414 of the Code.

Event of Default” is defined in Section 11.

Excess Risks” means, in respect of a Collateral Vessel: (a) the proportion of claims for general average, salvage and salvage charges which are not recoverable as a result of the value at which that Collateral Vessel is assessed for the purpose of such claims exceeding her hull and machinery insured value; and (b) collision liabilities not recoverable in full under the hull and machinery insurance by reason of those liabilities exceeding such proportion of the insured value of that Collateral Vessel as is covered by the hull and machinery insurance.

Excluded Collateral Vessels” means each of:

 

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(a)    any Collateral Vessel with respect to which (i) any Security Document to which such Collateral Vessel or the applicable Vessel Owner is subject ceases to be valid in any material respect or (ii) any Security Document creating a Security Interest in such Collateral Vessel or the applicable Vessel Owner in favor of the Security Trustee ceases to provide a perfected first priority security interest in favor of the Security Trustee in such Collateral Vessel or the applicable Vessel Owner as a result of the act or inaction of an Obligor; and

(b)    any Collateral Vessel with respect to which the registration at the registry of any Approved Flag State is cancelled or any Collateral Vessel that is arrested or otherwise detained and not released within thirty (30) days.

FATCA” means (a) sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), together with any current or future regulations or official interpretations thereof, (b) any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the United States of America and any other jurisdiction, which (in either case) facilitates the implementation of the foregoing clause (a), and (c) any agreements entered into pursuant to section 1471(b)(1) of the Code.

Federal Reserve Board” means the Board of Governors of the Federal Reserve System of the United States.

Finance Parties” means, collectively, the Sole Structuring Agent, the Note Administrative Agent, the Paying Agent, the Registrar, the Purchasers, the Lead Sustainability Coordinator and the Security Trustee.

Financing Documents” means, collectively (a) this Agreement, (b) the Notes, (c) the Intercreditor Agreement, (d) the Intercreditor Joinder in respect of the Notes and (e) the Security Documents.

GAAP” means, subject to Section 24.2, United States generally accepted accounting principles as in effect as of the date of determination thereof.

General Assignment” means in respect of a Collateral Vessel, the assignment of its Eligible Charter, any Charter Guarantee, any Requisition Compensation and the Earnings granted or to be granted by the relevant Vessel Owner in favor of the Security Trustee, together with any and all notices and acknowledgements entered into in connection therewith.

Governmental Authority means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state 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 (including any supra-national bodies such as the European Union or the European Central Bank).

 

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Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part) or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien); provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

Guarantor” is defined in the first paragraph of this Agreement.

Guarantor Financial Covenants” means the requirements set forth in Section 10.9(c) to (f).

Guarantor Group” means the Guarantor and each of its Subsidiaries.

Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes, and other substances or wastes of any nature regulated under or with respect to which liability or standards of conduct are imposed pursuant to any Environmental Law.

Hedge Counterparty” is defined in the Intercreditor Agreement.

Hedging Agreement” is defined in the Intercreditor Agreement.

HK Collection Account” means the account of the Company maintained with Citibank, N.A., Hong Kong Branch with account number 1004151018.

Holder” means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company pursuant to Section 14.1, provided, however, that if such Person is a nominee, then for the purposes of Sections 7, 12, 18.2 and 19 and any related definitions in this Schedule A, “Holder” shall mean the beneficial owner of such Note whose name and address appears in such register.

Identified Vessels” means the vessels referred to in Schedule A-2.

 

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IMO Decarbonization Trajectory” means the standard decarbonization trajectories produced or to be produced (as the case may be) from time to time by the Secretariat of the Poseidon Principles for each ship type and size class, being a representation of how many grams of CO2 a single vessel can emit to move one tonne of goods one nautical mile (gCO2/tnm) over the relevant time horizon, and on any Delta Test Date the IMO Decarbonization Trajectory shall be the most recent standard decarbonization trajectory which is applicable to the relevant Delta Test Period. The IMO Decarbonization Trajectory for the period 2020 to 2026, measured with reference to average efficiency ratio for containerships as of the date hereof (and as may be updated from time to time) is as set forth on Schedule A-5.

Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a)    all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(b)    all direct or contingent obligations of such Person arising under (i) letters of credit (including standby and commercial), bankers’ acceptances and bank guaranties and (ii) surety bonds, performance bonds and similar instruments issued or created by or for the account of such Person;

(c)    net obligations of such Person under any Hedging Agreement;

(d)    all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business);

(e)    indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(f)    any agreement treated as a finance or capital lease in accordance with GAAP; and

(g)    all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Hedging Agreement on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any Indebtedness of any Person for purposes of clause (e) that is expressly made non-recourse or limited-recourse (limited solely to the assets securing such Indebtedness) to such Person shall be deemed to be equal to the lesser of (i) the aggregate principal amount of such Indebtedness and (ii) the fair market value of the property encumbered thereby as determined by such Person in good faith.

 

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INHAM Exemption” is defined in Section 6.3(e).

Institutional Investor” means (a) any Purchaser of a Note, (b) any holder of a Note holding (together with one or more of its affiliates) more than 5% of the aggregate principal amount of any Series of Notes then outstanding, (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form, and (d) any Related Fund of any holder of any Note.

Insurances Assignment” means, in respect of a Collateral Vessel, the assignment of the Obligatory Insurances granted or to be granted in favor of the Security Trustee by the relevant Vessel Owner together with any and all notices and acknowledgments entered into in connection therewith.

Insurers” means the underwriters or insurance companies with whom any Obligatory Insurances are effected and the managers of any protection and indemnity or war risks association in which any or the Collateral Vessels may at any time be entered.

Intercreditor Agreement” means the amended and restated intercreditor and proceeds agreement dated as of May 19, 2021, among, inter alios, the Company, the Guarantor, the Administrative Agent (as defined therein) and the Security Trustee (as further amended and/or restated from time to time).

Intercreditor Joinder” means, with respect to the provisions of this Agreement relating to any Additional Secured Debt, an agreement substantially in the form of Exhibit B of the Intercreditor Agreement.

Interest and Principal Coverage Ratio” means, as at any date of determination and with respect to any period, the ratio of EBITDA for such period to Interest and Principal Expense for such period.

Interest and Principal Expense” means all Interest Expense incurred and all scheduled payments of principal (excluding any final payment thereof due on the maturity date thereof) made by the Guarantor and its consolidated Subsidiaries during a Measurement Period.

Interest Expense” means all cash interest and cash commitment fees incurred by the Guarantor or the Company, as applicable, and its consolidated Subsidiaries during a Measurement Period.

Interest Rate” means (a) with respect to each Series A Note, the Series A Note Interest Rate, (b) with respect to each Series B Note, the Series B Note Interest Rate, (c) with respect to each Series C Notes, the Series C Note Interest Rate and (d) with respect to each Series D Note, the Series D Note Interest Rate.

Interest Rate Period” means (i) for the first Interest Rate Period, the period commencing on the date of the Initial Closing and ending on June 4, 2022, and (ii) for any subsequent period, each 12 month period commencing on the June 5 Payment Date which follows a Delta Test Date and ending on June 4, the following year (or if earlier, the latest Maturity Date of any Series of Notes).

 

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Intra Group Loan” means:

(a)     any loan or other Indebtedness advanced by an Obligor, as lender, to any other Obligor (other than the Guarantor), as borrower; and

(b)     any loan or other Indebtedness owing by the Company to a member of the Guarantor Group which is, as at the Initial Closing, the shareholder of the owner of m.v. “Seaspan Thames”, “CMA CGM Tuticorin”, “MOL Brilliance”, “MOL Belief”, “YM World”, “YM Wondrous”, “MOL Beauty” or “YM Wreath” or any other vessel owned, as at the Closing, directly or indirectly by Greater China Intermodal Investments LLC for purposes of adding a Collateral Vessel to the Security Interests created by Security Documents.

Intra Group Loan Agreement” means any agreement in respect of an Intra Group Loan.

ISM Code” means the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organization Assembly as Resolutions A.741(18) and A.788(19), as the same may have been or may be amended or supplemented from time to time. The terms “safety management system”, “Safety Management Certificate”, “Document of Compliance” and “major non-conformity” shall have the same meanings as are given to them in the ISM Code.

ISPS Code” means the International Ship and Port Facility Security Code adopted by the International Maritime Organization Assembly as the same may have been or may be amended or supplemented from time to time.

Laws” means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

Lead Sustainability Coordinator” is defined in the first paragraph of this Agreement.

Lien” means, with respect to any Person, any mortgage, lien, pledge, charge, security interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title retention agreement or Capital Lease, upon or with respect to any property or asset of such Person (including in the case of stock, stockholder agreements, voting trust agreements and all similar arrangements).

LTM Rate” means the most recent US CPI rate as published by the U.S. Bureau of Labor Statistics, provided that the applicable indexation will have a floor of 0% p.a. and a cap of 3% p.a..

 

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Made Available” means, with respect to documents or other information to be provided by the Company under this Agreement, having posted such documents or information to an electronic dataroom from which such documents or information may be accessed by each Purchaser and its counsel.

Make-Whole Amount” is defined in Section 8.8.

Management Agreement” means each management agreement between a Vessel Owner and the Manager in respect of a Collateral Vessel, as the same may be amended from time to time in accordance with this Agreement.

Management Agreement Assignment” means each assignment of a Management Agreement granted or to be granted in favor of the Security Trustee by a Vessel Owner with any and all notices and acknowledgements entered into in connection therewith, one to be entered into between the Manager and the relevant Vessel Owner.

Manager” means Seaspan Management Services Ltd., V.Group, Anglo-Eastern and Bernhard Schulte Ship management, or such other professional manager or managers as may be approved either in accordance with the Requisite Program Debt, subject to Section 24.9, or by the Required Holders from time to time.

Manager’s Undertaking” means, in respect of each Collateral Vessel, a letter of undertaking to be issued by the Manager to the Security Trustee confirming it shall not make a claim to security ranking ahead of the Purchasers’ security in respect of that Collateral Vessel, in form and substance satisfactory to the Purchasers.

Market Value” means, in respect of any Collateral Vessel, the average of the two values of such Collateral Vessel provided by the Approved Valuers.

Material” means material in relation to the business, operations, affairs, financial condition, assets, properties, or prospects of the Company and its Subsidiaries taken as a whole.

Material Adverse Effect” means a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Obligors taken as a whole, (b) the ability of the Company to perform its obligations under any Financing Document to which it is a party, (c) the legality, validity, binding effect or enforceability against the Company of any Financing Document to which it is a party, (c) the rights, remedies and benefits available to, or conferred upon the Note Administrative Agent or any Purchaser under any Financing Document, (d) the ability of any Guarantor (as defined in the Intercreditor Agreement) to perform its obligations under its Program Debt Guarantee, or (e) the validity or enforceability of this Agreement, the Notes or any Program Debt Guarantee.

Maturity Date” means, with respect to any Note or Series of Notes, the “Maturity Date” as defined in the first paragraph of such Note or the Notes of such Series.

Measurement Period” means, at any time, the last four fiscal quarters for the Guarantor or the Company, as applicable.

 

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Memorandum” is defined in Section 5.8.

Mortgage” means, in respect of a Collateral Vessel, the first priority or first preferred ship mortgage, each given or to be given by the relevant Vessel Owner in favor of the Security Trustee and registered with the Approved Flag State registry of such Collateral Vessel.

NAIC” means the National Association of Insurance Commissioners.

Nationally Recognized Statistical Rating Organization means S&P Global Ratings, Moody’s Investors Service, Inc., Fitch Ratings, Inc., Kroll Bond Rating Agency, Inc. or DBRS, Inc., or their successors.

Non-U.S. Plan” means any plan, fund or other similar program that (a) is established or maintained outside the United States of America by the Company or any Subsidiary primarily for the benefit of employees of the Company or one or more Subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and (b) is not subject to ERISA or the Code.

Noteholder Sanctions Event” means, with respect to any holder of a Note (an “Affected Noteholder”), such holder or any of its affiliates being in violation of or subject to Sanctions (a) as a result of the Company or any Controlled Entity becoming a Sanctioned Person or, directly or indirectly, having any investment in or engaging in any dealing or transaction (including any investment, dealing or transaction involving the proceeds of the Notes) with any Sanctioned Person or (b) under any similar laws, regulations or orders adopted by any State within the United States as a result of the name of the Company or any Controlled Entity appearing on a State Sanctions List.

Notes” is defined in Section 1.

Obligatory Insurances” means, in respect of each Collateral Vessel: (a) all contracts and policies of insurance and all entries in clubs and/or associations which are from time to time required to be effected and maintained in accordance with this Agreement in respect of each of the Collateral Vessels; and (b) all benefits under the contracts, policies and entries under subsection (a) above and all claims in respect of them and the return of premiums.

Obligor” means the Company, the Guarantor and the Vessel Owners.

OFAC means the Office of Foreign Assets Control of the United States Department of the Treasury.

OFAC Sanctions Program” means any economic or trade sanction that OFAC is responsible for administering and enforcing. A list of OFAC Sanctions Programs may be found at http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx.

Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other officer of the Company whose responsibilities extend to the subject matter of such certificate.

 

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Original Financial Statements” means the consolidated financial statements of the Guarantor for the financial year ended 31 December 2020.

Payment Date” means each March 5, June 5, September 5, December 5 commencing on September 5, 2021, provided that if any such date is not a Business Day, the relevant Payment Date shall be the immediately succeeding Business Day.

Paying Agent” is defined in Section 15.2.

Permitted Liens” means, in respect of a Collateral Vessel: (a) Security Interests created by the Security Documents; (b) liens for unpaid crew’s wages including wages of the master and stevedores employed by the Collateral Vessel, outstanding in the ordinary course of trading for not more than one calendar month after the due date for payment; (c) liens for salvage; (d) liens for classification or scheduled dry docking or for necessary repairs to that Collateral Vessel that in each case are outstanding for not more than one month; (e) liens for collision; (f) liens for master’s disbursements incurred in the ordinary course of trading; (g) statutory and common law liens of carriers, warehousemen, mechanics, suppliers, materials men, repairers or other similar liens, including maritime liens, in each case arising in the ordinary course of business, outstanding for not more than one month and (h) liens for damages arising from maritime torts which are unclaimed, or are covered by insurance and any deductible applicable thereto, or in respect of which a bond or other security has been posted on behalf of the relevant Vessel Owner with the appropriate court or other tribunal to prevent the arrest or secure the release of such Collateral Vessel from arrest; provided that in the case of subsections (b) to (g) inclusive the amounts which give rise to such liens are paid when due (or, in the case of subsections (b) or (g) above, within one month of such amount being outstanding) or, if not paid when due are being disputed in good faith by appropriate proceedings (and for the payment of which adequate reserves or security are at the relevant time maintained or provided), provided further that such proceedings, whether by payment of adequate security into court or otherwise, do not give rise to a material risk of the relevant Collateral Vessel or any interest therein being seized, sold, forfeited or otherwise lost or of criminal liability on any Purchaser, any Finance Party or any of their respective Related Parties.

Person” means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, business entity or Governmental Authority.

Poseidon Principles” means the financial industry framework for assessing and disclosing the climate alignment of ship finance portfolios published in June 2019 as the same may be amended or replaced to reflect changes in Applicable Law or regulation or the introduction of or changes to mandatory requirements of the International Maritime Organization from time to time.

Present Value of Contracted Net Cash Flow” means, in respect of any Collateral Vessel and Eligible Charter, the Contracted Net Cash Flow in respect thereof discounted using a discount rate of 10% per annum (or, where the Terminal Value provider is VesselsValue, 8% per annum).

Program Debt” has the meaning specified in the Intercreditor Agreement.

 

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Program Debt Documents” means (a) the credit agreement dated as of May 15, 2019, as amended and restated on May 19, 2021 between, among others, the Company, the Guarantor, the Administrative Agent (as defined therein) and the Lenders (as defined therein) party thereto from time to time, as further amended or amended and restated from time to time; (b) the credit agreement dated as of December 30, 2020, as amended and restated on May 19, 2021 between, among others, the Company, the Guarantor, the Administrative Agent (as defined therein) and the Lenders (as defined therein) party thereto from time to time, as further amended or amended and restated from time to time; (c) the credit agreement dated as of October 14, 2020, as amended and restated on May 19, 2021 between, among others, the Company, the Guarantor, the Administrative Agent (as defined therein) and the Lenders (as defined therein) party thereto from time to time, as further amended or amended and restated from time to time; and (d) any other Additional Debt Document.

Program Debt Guarantee” is defined in Section 4.9(a).

property” or “properties” means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate.

PTE” is defined in Section 6.3(a).

Purchase Agreement” means, in respect of a Collateral Vessel, the memorandum of agreement or purchase agreement entered into or to be entered into between the relevant seller of such Collateral Vessel and the Vessel Owner, as buyer.

Purchaser” or “Purchasers” means each of the purchasers that has executed and delivered this Agreement to the Company and such Purchaser’s successors and assigns (so long as any such assignment complies with Section 14.2), provided, however, that any Purchaser of a Note that ceases to be the registered holder or a beneficial owner (through a nominee) of such Note as the result of a transfer thereof pursuant to Section 14.2 shall cease to be included within the meaning of “Purchaser” of such Note for the purposes of this Agreement upon such transfer.

Purchaser Schedule” means the Purchaser Schedule to this Agreement listing the Purchasers of the Notes and including their notice and payment information.

QCC Target Ratio” means in respect of any QCC Test Period, the proportion expressed as a percentage (Q) of (i) the number of Qualifying Charter Contracts which are executed and dated during that QCC Test Period (and, if elected by the Company, any Qualifying Charter Contracts which are extended or renewed during such period (such Qualifying Charter Contracts being referred to herein as “Renewals”)) and which contain a Sustainability Linked Charter Mechanism, to (ii) the total number of Qualifying Charter Contracts which are executed and dated during such QCC Test Period (and any Renewals) and calculated per the formula below:

 

LOGO

 

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where LOGO is the number Qualifying Charter Contracts which are executed and dated during that QCC Test Period (and any Renewals) and which contain a Sustainability Linked Charter Mechanism and LOGO is the total number Qualifying Charter Contracts which are executed and dated during the same QCC Test Period (and any Renewals).

QCC Test Date” means, at the election of the Lead Sustainability Coordinator, a Business Day falling on or before June 30, 2022 and thereafter each anniversary of such date in each subsequent calendar year provided that if any such date shall not be a Business Day, the relevant QCC Test Date shall be the immediately succeeding Business Day.

QCC Test Period” means the twelve (12) calendar month period commencing on January 1 and ending on December 31 immediately prior to the relevant QCC Test Date.

QPAM Exemption” is defined in Section 6.3(d).

Qualified Institutional Buyer” means any Person who is a “qualified institutional buyer” within the meaning of such term as set forth in Rule 144A(a)(1) under the Securities Act.

Qualifying Charter Contracts” means any firm contract for the employment of a vessel owned by a member of the Guarantor Group with a Person other than a member of the Guarantor Group, which has a remaining fixed term of not less than 12 months (which shall include any extension options which (i) if at the option of the Charterer, have been exercised, (ii) if at the option of the relevant vessel owner, have or have not yet been exercised and (iii) are automatically exercised (without any condition, requirement or other arrangement whereby such extension will not occur other than a determination from the relevant vessel owner otherwise)), and shall include any charter providing the applicable vessel owner with a termination right.

Recognized Organization” means, in respect of a Collateral Vessel, an organization approved by the maritime administration of the Collateral Vessel’s flag state to verify that the ship energy efficiency management plans of vessels registered in such flag state are in compliance with Regulation 22A of Annex Vl and to issue “statements of compliance for fuel consumption reporting” confirming that vessels registered in such flag state are in compliance with that regulation, including any Classification Society.

Registrar” is defined in Section 14.4.

Registration Duty” means any registration duty or similar amount payable pursuant to any Applicable Law in connection with the use in a judicial proceeding of this Agreement, the Notes or any other agreement or document related hereto or thereto or the transactions contemplated herein or therein.

Related Contracts” means any or all of the following (as the context requires): (a) the Obligatory Insurances; (b) the Eligible Charters; (c) the Management Agreements; and (d) the Charter Guarantees.

 

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Related Fund” means, with respect to any holder of any Note, any fund or entity that (i) invests in Securities or bank loans, and (ii) is advised or managed by such holder, the same investment advisor as such holder or by an affiliate of such holder or such investment advisor.

Related Parties” means, with respect to any Person, such Person’s Affiliates, head office, other branches and regional offices, and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates, head office, other branches and regional offices.

Required Deductible Amount” means, in respect of the Obligatory Insurances for a Collateral Vessel, an amount to be commercially reasonable and consistent with other similarly situated operators.

Required Holders” means at any time on or after the Initial Closing, the holders of more than fifty percent (50%) in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates).

Required Information” is defined in Section 7.5.

Required Insurance Amount” means, in respect of a Collateral Vessel, the higher of (a) the amount which is 120% of the product of (i) the proportion of the Market Value of such Collateral Vessel to the total Market Value of all Collateral Vessels, multiplied by (ii) the total outstanding amount of the Secured Obligations, and (b) the Market Value of such Collateral Vessel calculated as of the date on which such Collateral Vessel is added to the Security Assets and thereafter as of the date of the annual renewal of the relevant Obligatory Insurances.

Required Original Documents” is defined in Section 24.10.

Requisite Program Debt” means, with respect to any applicable approval, consent or similar action hereunder, each credit facility constituting Program Debt which contains a corresponding and substantially similar approval, consent or similar action provision.

Requisition Compensation” means, in respect of a Collateral Vessel, all moneys or other compensation payable by reason of requisition for title to, or other compulsory acquisition of, that Collateral Vessel including requisition for hire.

Responsible Officer” means any Senior Financial Officer and any other officer of the Company with responsibility for the administration of the relevant portion of this Agreement.

Sanctioned Jurisdiction” means, at any time, a country or territory that is the subject of comprehensive Sanctions.

Sanctioned Person” means, at any time, (a) any Person listed in, or acting on behalf of a Person listed in, any Sanctions related list maintained by any Sanctions Authority, (b) any Person located, organized, or resident in a Sanctioned Jurisdiction, or (c) any other subject of Sanctions, including, without limitation, any Person controlled or fifty percent (50%) or more owned in the aggregate, directly or indirectly, by any subject or subjects of Sanctions.

 

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Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by any Sanctions Authority.

Sanctions Authority” means the United States (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, the U.S. Department of Commerce or through any existing or future statute or Executive Order), the United Kingdom (including, without limitation, Her Majesty’s Treasury), the European Union and any EU member state, the French Republic, the United Nations Security Council, Canada and Hong Kong Monetary Authority and any other Governmental Authority with jurisdiction over the Obligors or, to the extent this term is used in Section 8.4(a), the Finance Parties.

SEC” means the Securities and Exchange Commission of the United States.

Securities” or “Security” shall have the meaning specified in section 2(1) of the Securities Act.

Securities Act” means the Securities Act of 1933 and the rules and regulations promulgated thereunder from time to time in effect.

Security Assets” means any asset which is the subject of a Security Interest created by a Security Document.

Security Documents” means: (a) the Mortgages; (b) the Deeds of Covenant; (c) the Insurances Assignments; (d) the Management Agreement Assignments; (e) the General Assignments; (f) the Account Charges; (g) the Manager’s Undertakings; (h) the Share Pledges; (i) any Charterer’s Undertakings, (j) any Additional Security; (k) any other Collateral Documents and (k) any other document designated as such in writing by the Company or any Vessel Owner and the Purchasers; in each case together with any and all notices and acknowledgements entered into and in connection therewith.

Security Interest” means any mortgage, pledge, lien, charge, assignment, hypothecation or security interest or any other agreement or arrangement having a similar effect.

Security Trustee” means UMB Bank, National Association.

Senior Financial Officer” means the chief financial officer, principal accounting officer, treasurer or comptroller of the Company.

Series” means the Series A Notes, Series B Notes, Series C Notes or Series D Notes.

Series A Note Interest Rate” means, with respect to each Series A Note, the aggregate of:

(a)    3.91% per annum; and

 

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(b)     (i) any Applicable Performance Rate Adjustment for the relevant Interest Rate Period, minus (ii) any Applicable Charter Rate Adjustment in the immediately preceding Interest Rate Period, plus (iii) any Applicable Charter Rate Adjustment for the relevant Interest Rate Period, save that the collective aggregate of the foregoing (b)(i), (b)(ii) and (b)(iii) may not (A) exceed 0.025% per annum or (B) be less than -0.025% per annum, in each case for any single Interest Rate Period (relative to the prior Interest Rate Period);

provided that, the collective aggregate of the foregoing paragraphs (a) and (b) shall not (X) exceed 3.96% per annum for any single Interest Rate Period, or (Y) be less than 3.91% per annum for any single Interest Rate Period;

and provided further that, where the Company fails to deliver any of the Compliance Data, other items contemplated by Section 9.35(a) hereof and/or any Decarbonization Certificate required by this Agreement, in order to determine any Applicable Charter Rate Adjustment for the relevant Interest Rate Period, the foregoing paragraph (b) (excluding the provisos following such paragraph (b)) shall be replaced with and applied as follows:

“(b)     (i) 3.91% per annum, minus (ii) any Applicable Charter Rate Adjustment in the immediately preceding Interest Rate Period, save that the collective aggregate of the foregoing (b)(i) and (b)(ii) may not (A) exceed 0.025% per annum or (B) be less than -0.025% per annum, in each case for any single Interest Rate Period (relative to the prior Interest Rate Period)”.

Series A Notes” is defined in Section 1.

Series B Note Interest Rate” means, with respect to each Series B Note, the aggregate of:

(a)    3.91% per annum; and

(b)     (i) any Applicable Performance Rate Adjustment for the relevant Interest Rate Period, minus (ii) any Applicable Charter Rate Adjustment in the immediately preceding Interest Rate Period, plus (iii) any Applicable Charter Rate Adjustment for the relevant Interest Rate Period, save that the collective aggregate of the foregoing (b)(i), (b)(ii) and (b)(iii) may not (A) exceed 0.025% per annum or (B) be less than -0.025% per annum, in each case for any single Interest Rate Period (relative to the prior Interest Rate Period);

provided that, the collective aggregate of the foregoing paragraphs (a) and (b) shall not (X) exceed 3.96% per annum for any single Interest Rate Period, or (Y) be less than 3.91% per annum for any single Interest Rate Period;

and provided further that, where the Company fails to deliver any of the Compliance Data, other items contemplated by Section 9.35(a) hereof and/or any Decarbonization Certificate required by this Agreement, in order to determine any Applicable Charter Rate Adjustment for the relevant Interest Rate Period, the foregoing paragraph (b) (excluding the provisos following such paragraph (b)) shall be replaced with and applied as follows:

“(b)     (i) 3.91% per annum, minus (ii) any Applicable Charter Rate Adjustment in the immediately preceding Interest Rate Period, save that the collective aggregate of the foregoing (b)(i) and (b)(ii) may not (A) exceed 0.025% per annum or (B) be less than -0.025% per annum, in each case for any single Interest Rate Period (relative to the prior Interest Rate Period)”.

 

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Series B Notes” is defined in Section 1.

Series C Note Interest Rate” means, with respect to each Series C Note, the aggregate of:

(a)    4.06% per annum; and

(b)     (i) any Applicable Performance Rate Adjustment for the relevant Interest Rate Period, minus (ii) any Applicable Charter Rate Adjustment in the immediately preceding Interest Rate Period, plus (iii) any Applicable Charter Rate Adjustment for the relevant Interest Rate Period, save that the collective aggregate of the foregoing (b)(i), (b)(ii) and (b)(iii) may not (A) exceed 0.025% per annum or (B) be less than -0.025% per annum, in each case for any single Interest Rate Period (relative to the prior Interest Rate Period);

provided that, the collective aggregate of the foregoing paragraphs (a) and (b) shall not (X) exceed 4.11% per annum for any single Interest Rate Period, or (Y) be less than 4.06% per annum for any single Interest Rate Period;

and provided further that, where the Company fails to deliver any of the Compliance Data, other items contemplated by Section 9.35(a) hereof and/or any Decarbonization Certificate required by this Agreement, in order to determine any Applicable Charter Rate Adjustment for the relevant Interest Rate Period, the foregoing paragraph (b) (excluding the provisos following such paragraph (b)) shall be replaced with and applied as follows:

“(b)     (i) 4.06% per annum, minus (ii) any Applicable Charter Rate Adjustment in the immediately preceding Interest Rate Period, save that the collective aggregate of the foregoing (b)(i) and (b)(ii) may not (A) exceed 0.025% per annum or (B) be less than -0.025% per annum, in each case for any single Interest Rate Period (relative to the prior Interest Rate Period)”.

Series C Notes” is defined in Section 1.

Series D Note Interest Rate” means, with respect to each Series D Note, the aggregate of:

(a)    4.26% per annum; and

(b)     (i) any Applicable Performance Rate Adjustment for the relevant Interest Rate Period, minus (ii) any Applicable Charter Rate Adjustment in the immediately preceding Interest Rate Period, plus (iii) any Applicable Charter Rate Adjustment for the relevant Interest Rate Period, save that the collective aggregate of the foregoing (b)(i), (b)(ii) and (b)(iii) may not (A) exceed 0.025% per annum or (B) be less than -0.025% per annum, in each case for any single Interest Rate Period (relative to the prior Interest Rate Period);

provided that, the collective aggregate of the foregoing paragraphs (a) and (b) shall not (X) exceed 4.31% per annum for any single Interest Rate Period, or (Y) be less than 4.26% per annum for any single Interest Rate Period;

 

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and provided further that, where the Company fails to deliver any of the Compliance Data, other items contemplated by Section 9.35(a) hereof and/or any Decarbonization Certificate required by this Agreement, in order to determine any Applicable Charter Rate Adjustment for the relevant Interest Rate Period, the foregoing paragraph (b) (excluding the provisos following such paragraph (b)) shall be replaced with and applied as follows:

“(b)     (i) 4.26% per annum, minus (ii) any Applicable Charter Rate Adjustment in the immediately preceding Interest Rate Period, save that the collective aggregate of the foregoing (b)(i) and (b)(ii) may not (A) exceed 0.025% per annum or (B) be less than -0.025% per annum, in each case for any single Interest Rate Period (relative to the prior Interest Rate Period)”.

Series D Notes” is defined in Section 1.

Share Pledge” means, in relation to the Company and each Vessel Owner, each first priority charge, pledge or mortgage or equivalent over the shares in the Company or Vessel Owner (as the case may be) to be given by: (a) in the case of the Company, the Guarantor; and (b) in the case of each Vessel Owner, the Company, in each case in favor of and in form and substance satisfactory to the Security Trustee and “Share Pledges” means all such share pledges.

Sole Structuring Agent” means Citi.

Source” is defined in Section 6.3.

State Sanctions List” means a list that is adopted by any state Governmental Authority within the United States of America pertaining to Persons that engage in investment or other commercial activities in Iran or any other country that is a target of economic sanctions imposed under U.S. Economic Sanctions Laws.

Subsidiary” of a Person means a corporation, partnership, limited liability company, association or joint venture or other business entity of which a majority of the equity interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time owned or the management of which is controlled, directly, or indirectly through one or more intermediaries, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Company.

Substitute Purchaser is defined in Section 22.

Substitute Vessel” has the meaning set forth in Section 10.5.

Super-Majority Holders” means at any time on or after the Closing, the holders of at least 66-2/3% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates).

Sustainability Linked Charter Mechanism” means, in the sole opinion of the Lead Sustainability Coordinator, acting reasonably, a qualifying contractual provision of a Qualifying Charter Contract providing for the relevant charter rate to be increased and/or reduced, by an amount which is not less than 0.5% of the relevant initial charter rate, and where any such increase and reduction in the charter rate is subject to and dependent on the alignment of the relevant vessel’s carbon intensity, measured by that vessel’s AER, EEOI, or some other broadly accepted emissions metric for which the International Maritime Organization produces a related trajectory, with such trajectory.

 

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SVO” means the Securities Valuation Office of the NAIC.

Swap” means any trade or transaction entered into by the Company and a Hedge Counterparty under or pursuant to a Hedging Agreement.

Swap Termination Value” means, in respect of any one or more Swaps, after taking into account the effect of any legally enforceable netting agreement relating to such Swaps, (a) for any date on or after the date such Swaps have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swaps, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swaps.

Tax” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

Taxing Jurisdiction” is defined in Section 13(a).

Terminal Value” means, in respect of any Collateral Vessel: (a) the present value (using a discount rate of 10% per annum) of the forward projected value for such Collateral Vessel as at the maturity of the relevant Eligible Charter (which shall, for these purposes, take account of any extension option which is included for the purposes of the definition of Eligible Charter for such Collateral Vessel) as provided by Maritime Strategies International Ltd; or (b) if the Company has elected that VesselsValue valuations shall be used for all Collateral Vessels on the applicable calculation date, the fixed age valuation for such Collateral Vessel as at the maturity of the relevant Eligible Charter (which shall, for these purposes, take account of any extension option which is included for the purposes of the definition of Eligible Charter for such Collateral Vessel) as provided by VesselsValue (with no discount rate applicable). Where the Eligible Charter of any Collateral Vessel has been extended and the Terminal Value on any Test Date would otherwise be calculated on the basis of valuations which pre-date such extension, the Company shall be permitted to obtain an updated valuation for such Collateral Vessel which shall be used for the purposes of calculating the Terminal Value of such Collateral Vessel.

Test Date” means: (a) any BB Test Date; and (b) any Determination Date.

Total Assets” means, in respect of the Guarantor on a consolidated basis, the following, in each case as indicated on the most recently delivered financial statement of the Guarantor and its consolidated Subsidiaries:

(a)    all of the assets of the types presented on its consolidated balance sheet; less

 

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(b)    assets under any vessel construction or ship purchase agreement (including novation and assignment and assumption agreements) that the Guarantor or any of its Subsidiaries is required to record on its books under GAAP even though such entity is no longer the legal owner of the vessel or legally obligated to take delivery of the vessel.

Total Borrowings” means, in respect of the Guarantor on a consolidated basis and without duplication, in each case as indicated on the most recently delivered financial statement of the Guarantor and its Subsidiaries, the aggregate of the following:

(a)    the outstanding principal amount of any moneys borrowed; plus

(b)    the outstanding principal amount of any acceptance under any acceptance credit; plus

(c)    the outstanding principal amount of any bond, note, debenture or other similar instrument; plus

(d)    the book values of indebtedness under a lease, charter, hire purchase agreement or other similar arrangement which would, in accordance with GAAP, be treated as a finance or capital lease; plus

(e)    the outstanding principal amount of all moneys owing in connection with the sale or discounting of receivables (otherwise than on a non-recourse basis or which otherwise meet any requirements for de-recognition under GAAP); plus

(f)    the outstanding principal amount of any indebtedness arising from any deferred payment agreements arranged primarily as a method of raising finance or financing the acquisition of an asset (except trade payables); plus

(g)    any fixed or minimum premium payable on the repayment or redemption of any instrument referred to in clause (c) above; and plus

(h)    the outstanding principal amount of any indebtedness of any Person other than a Subsidiary of the Guarantor of a type referred to in the above clauses of this definition which is the subject of a guarantee (or other agreement by which recourse is granted to the Guarantor) given by the Guarantor to the extent that such guaranteed indebtedness is determined and given a value in respect of the Guarantor on a consolidated basis in accordance with GAAP.

Notwithstanding the foregoing, “Total Borrowings” shall not include (a) Indebtedness or obligations arising from derivative transactions, such as protecting against interest rate or currency fluctuations or (b) Indebtedness under any vessel construction or ship purchase agreement (including novation and assignment and assumption agreements) that the Guarantor is required to record on its books under GAAP even though the Guarantor is no longer the legal owner of the vessel or legally obligated to take delivery of the vessel.

Total Loss” means in relation to a Collateral Vessel:

 

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(a)    actual, constructive, compromised, agreed or arranged total loss of that Collateral Vessel;

(b)    requisition for title or other compulsory acquisition of that Collateral Vessel otherwise than by requisition for hire;

(c)    capture, seizure, arrest, detention, or confiscation of that Collateral Vessel by any government or by persons acting or purporting to act on behalf of any government or by any other Person which deprives the Vessel Owner of that Collateral Vessel or as the case may be the Charterer of the use of that Collateral Vessel for more than sixty (60) days after that occurrence; and

(d)    requisition for hire of that Collateral Vessel by any government or by persons acting or purporting to act on behalf of any government which deprives the Vessel Owner or as the case may be the Charterer of the use of that Collateral Vessel for a period of sixty (60) days, other than a Charter of the Collateral Vessel to a government or government agency approved by the Company and either in accordance with the Requisite Program Debt, subject to Section 24.9, or by the Required Holders.

UBO” means (a) any of Kyle Washington, Kevin Washington, Dennis Washington or any of their estate, spouse, and/or descendants; (b) any trust for the benefit of the Persons listed in (a); (c) Fairfax Financial Holdings Limited; (d) an Affiliate of any of the Persons listed in (a), (b) or (c); or (e) a combination of the foregoing.

UCC” means the Uniform Commercial Code as in effect in the State of New York or any other applicable jurisdiction.

United States Person” has the meaning set forth in Section 7701(a)(30) of the Code.

U.S. Economic Sanctions Laws” means those laws, executive orders, enabling legislation or regulations administered and enforced by the United States pursuant to which economic sanctions have been imposed on any Person, entity, organization, country or regime, including the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Iran Sanctions Act, the Sudan Accountability and Divestment Act and any other OFAC Sanctions Program.

Vessel Disposition” has the meaning given to such term in Section 10.6.

Vessel Disposition Date” means the date of any Vessel Disposition in accordance with the requirements set forth in Section 10.6.

Vessel Owner” means any special purpose company that owns a Collateral Vessel and the entire issued share capital of which is acquired or to be acquired by the Company.

Vessel Owner Account” means, in respect of any Vessel Owner, any account in the name of the applicable Vessel Owner opened or to be opened with the Account Bank into which Earnings shall be paid, as more particularly described in the relevant Account Charge relating thereto.

 

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Vessel Substitution Date” means the date of any vessel substitution in accordance with the requirements set forth in Section 10.5.

 

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Exhibit 99.1

 

LOGO   LOGO
 

23 Berkeley Square

Mayfair, London, W1J 6HE

United Kingdom

www.atlascorporation.com

Seaspan Announces Completion of the Largest Reported Sustainability-Linked

US Private Placement of $500 million as part of its

Amended & Upsized $2.5 billion Portfolio Financing Program

Announces Significant Enhancements and Total Capacity Increase to its Industry-Leading

Innovative $2.5 billion Portfolio Financing Program

London, UK, May 24, 2021 – Seaspan Corporation (“Seaspan”), a wholly owned subsidiary of Atlas Corp. (“Atlas”) (NYSE: ATCO), has entered into a note purchase agreement to issue, in a private placement (the “Private Placement”), $500 million principal amount of fixed rate, sustainability-linked senior secured notes (the “Notes”), of which $450 million principal amount was issued and sold on Friday, May 21, 2021 and $50 million is expected to be issued and sold on August 12, 2021, subject to customary closing conditions. The Private Placement, which involved over 20 prominent investors, was completed as part of Seaspan’s amended and upsized $2.5 billion vessel portfolio financing program (the “Program”) and constitutes the largest reported sustainability-linked US private placement. The Program, which was initially established in 2019, is now comprised of $2.0 billion of bank credit facilities and $500 million of the Notes.

Key Highlights

 

   

Largest reported US private placement in shipping – With more than $1 billion in demand, the Private Placement received significant interest from prominent investors, predominately in North America.

 

   

Largest reported sustainability-linked US private placement – Largest reported and first in the transportation sector. Sustainalytics, a Morningstar company and a global leader in ESG research, ratings and data, delivered a Second Party Opinion confirming alignment of the Notes with the Sustainability-Linked Loan Principles which have been jointly developed by the leading loan market associations in Europe, Asia and the United States.

 

   

Expansion of the Program reflective of Seaspan growth – Increase in capacity to $2.5 billion, including the Notes, expansion of syndicate to over 30 banks and over 20 institutional investors, and enhancements to existing Program debt reflective of Seaspan’s quality growth.

 

   

Enhancement of terms of the bank credit facilities under the Program – Reduced pricing approximately 20%, extended maturities, improved advance rates against assets, and increased revolver to $400 million, among other improvements.

 

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US Private Placement

The Private Placement, placed with over 20 institutional investors within the insurance industry, received significant demand from the North American market and was oversubscribed, resulting in longer terms and tight credit spreads. The Notes form part of the Program, which was established in 2019 and has evolved to become one of Seaspan’s key competitive advantages.

The $500 million of Notes comprise four series, each ranking pari passu with existing and future Program debt and with the following term, size and initial interest rate:

 

Term (Years)

   Series Size ($USD)      Initial Interest Rate (%)    

Issue Date

10 years

   $ 150 million        3.91   May 21, 2021

10 years

   $ 50 million        3.91   August 12, 2021

12 years

   $ 170 million        4.06   May 21, 2021

15 years

   $ 130 million        4.26   May 21, 2021

The weighted average maturity of the Notes is approximately 12.0 years and the weighted average initial interest rate is approximately 4.1%. The Notes are non-amortizing.

Amended & Upsized $2.5 Billion Program

On May 19, 2021, Seaspan entered into amendments and restatements of the senior secured loan facilities and intercreditor and proceeds agreement that comprise the Program. In connection with such amendments and restatements, Seaspan achieved significant enhancements to its industry-leading innovative Program, including:

 

   

Increase in capacity to an aggregate of $2.5 billion, including the Notes;

 

   

Increase in size of revolving credit facility from $300 million to $400 million;

 

   

Additional $180 million of commitments under the bank loan facilities (the “Upsize”);

 

   

Extension of maturities of tranches due 2024 and 2025 by approximately two years;

 

   

Reduction of average interest rate margins of existing tranches by approximately 20%;

 

   

Higher advance rates under the Program;

 

   

Broader syndicate of over 30 banks and over 20 institutional investors; and

 

   

BBB- (watch upgrade) rating from Kroll Bond Rating Agency

The incremental Program debt is expected to be drawn over the next six months. The net proceeds of the Private Placement and the Upsize are intended to be used to finance or refinance the acquisition of vessels and for general corporate purposes. Proceeds of the Private Placement may also be used to repay a portion of the bank credit facility debt under the Program.

Bing Chen, President and CEO of Atlas, commented, “I’m proud of our team’s consistent leadership in developing the industry’s innovative financial solutions. This transaction both further solidifies our balance sheet and provides competitive and flexible long-term funding to facilitate our proven quality growth throughout market cycles. The Notes were oversubscribed by a strong group of prominent global investors, which clearly demonstrates the increasing interest and growing sponsorship Atlas is receiving within the global investment community. Atlas’ resilient business model and quality growth continues to generate significant and attractive opportunities to lead industry innovations and strengthen our competitiveness.”

 

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Graham Talbot, CFO of Atlas, commented, “Closing of these transactions marks a major milestone in the evolution of our capital structure. While the road started years ago, in the last six months alone we have diversified our capital sources into multiple new institutional markets through three issuances of senior unsecured notes and have now completed the first sustainability linked US private placement in the Transportation sector. We now have over $1 billion in liquidity to allocate between our capex program and further balance sheet optimization. We continue to execute and proactively fund quality growth opportunities while prudently managing our balance sheet and delivering dependable and consistent returns to both our equity and credit investors.”

Sustainability Feature

Pricing of the Program debt, including the Notes, is subject to adjustment based on Seaspan’s achievements relative to two key performance indicators (KPIs):

 

   

The first indicator aims at measuring the alignment of the carbon intensity of the collateral vessels with the International Maritime Organization (IMO) 2050 decarbonization trajectory. The structure is inspired by the Poseidon Principles, the global framework by which financial institutions can assess the climate alignment of their ship finance portfolios.

 

   

The second aims at fostering cooperation with charterers in order to advance the decarbonization agenda, by seeking to include sustainability-linked provisions in future agreements.

Advisors & Lenders

Citigroup Global Markets Inc. acted as Sole Structuring Agent for the Program. Société Générale acted as Lead Sustainability Coordinator for the Program. The bank portion of the Program includes a syndicate of lenders, led by Citibank, N.A., Société Générale, Hong Kong Branch, Bank of Montreal, National Australia Bank Limited, Wells Fargo Bank, N.A., BNP Paribas, Bank of America, N.A. as Mandated Lead Arrangers & Joint-Bookrunners.

The Notes have not been and will not be registered under the Securities Act of 1933 or the securities laws of any state or other jurisdiction and may not be offered or sold in the United States or any other jurisdiction absent registration or an exemption from the registration requirements of the Securities Act of 1933 and the applicable securities laws of any state or other jurisdiction.

This press release does not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any offer or sale of, the Notes in any jurisdiction in which the offer, solicitation or sale of the Notes would be unlawful prior to the registration or qualification thereof under the securities laws of any such state or jurisdiction.

About Atlas

Atlas is a leading global asset management company, differentiated by its position as a best-in-class owner and operator with a focus on deploying capital to create sustainable shareholder value. Atlas brings together an experienced asset management team with deep operational and capital allocation experience. We target long-term, risk adjusted returns across high-quality infrastructure assets in the maritime sector, energy sector and other infrastructure verticals. Our two portfolio companies, Seaspan Corporation and APR Energy Ltd. are unique, industry-leading operating platforms in the global maritime and energy spaces, respectively.

 

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About Seaspan

Seaspan is a leading independent owner and operator of containerships. We charter our vessels primarily pursuant to long-term, fixed-rate time charters to the world’s largest container shipping liners. As at March 31, 2021, Seaspan’s fleet consisted of 127 containerships representing total capacity of approximately 1,073,200 TEU. On May 19, 2021, we announced the delivery of two second-hand vessels. We also have 37 vessels under construction and expect to take delivery of two additional second-hand vessels in the near term, increasing total capacity to 1,670,200 TEU, on a fully delivered basis. For more information, visit www.seaspancorp.com.

Cautionary Note Regarding Forward-Looking Statements

This release contains certain forward-looking statements (as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events, including forward-looking statements regarding the issue and sale of $50 million of Notes in August 2021 (the “2nd Closing”) and the use of proceeds of the Private Placement and Upsize. Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates”, “projects”, “forecasts”, “will”, “may”, “potential”, “should”, and similar expressions are forward-looking statements. These forward-looking statements reflect management’s current expectations only as of the date of this release. As a result, you are cautioned not to rely on any forward-looking statements. Although these statements are based upon assumptions that we believe to be reasonable based upon available information, they are subject to risks and uncertainties. These risks and uncertainties include, but are not limited to: the risk that the 2nd Closing may not be consummated; the use of the net proceeds of the Private Placement and Upsize; and other factors detailed from time to time in our periodic reports and filings with the SEC, including Atlas’s Annual Report on Form 20-F for the year ended December 31, 2020 filed with the SEC on March 19, 2021. We expressly disclaim any obligation to update or revise any of these forward-looking statements, whether because of future events, new information, a change in our views or expectations, or otherwise. We make no prediction or statement about the performance of any of our securities.

Investor Inquiries:

Robert Weiner

Investor Relations

Atlas Corp.

Tel. +1-904-345-4939

Email: IR@atlascorporation.com

-end-

 

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