Exhibit 10.12

 

 

 

FIRST AMENDMENT TO LOAN AGREEMENT

THIS FIRST AMENDMENT TO LOAN AGREEMENT (this "First Amendment"), dated as of the
14th day of December, 2012, is made between LCI SHIPHOLDINGS, INC., a Marshall
Islands corporation ("Borrower"), WATERMAN STEAMSHIP CORPORATION, a New York
corporation ("Seller"), INTERNATIONAL SHIPHOLDING CORPORATION, a Delaware
corporation ("Guarantor") and CAPITAL ONE, NATIONAL ASSOCIATION ("Lender"), who
agree as follows:

Recitals.

a.

Seller, Guarantor and Lender are parties to that certain Loan Agreement dated as
of December 28, 2011 (the "Original Loan Agreement," as amended by this First
Amendment and any future amendments, the "Agreement").

b.

Seller wishes to sell, and Borrower wishes to purchase, the Vessel, and in
connection therewith, to reflag the Vessel under a Marshall Islands flag.

c.

In connection with such sale, Borrower will fully assume all obligations of
Seller under the Loan Agreement and Prior Note, and will execute a new
promissory note and a new security documents to provide Lender with a continuing
first priority mortgage and security interest in the Collateral.

d.

Lender is willing to grant its consent to such transactions, on the terms and
conditions set forth herein.

NOW THEREFORE, the parties agree as follows.

ARTICLE 1

GENERAL TERMS

Section 1.01 Terms Defined Above. As used in this First Amendment, the terms
"Agreement", "Borrower," "First Amendment," "Guarantor," "Original Loan
Agreement," "Seller" and "Lender" shall have the meanings indicated above.

Section 1.02 Certain Definitions. The definitions of the following terms defined
in the Original Loan Agreement are amended and restated as follows:

"Environmental Laws" shall mean any and all applicable federal, state, local,
national or international laws, regulations, and requirements pertaining to
health, safety, or the environment, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. §9601 et seq., the Resource Conservation and Recovery Act of 1976, 42
U.S.C. § 6901 et seq., the Occupational Safety and Health Act, 29 U.S.C. §651 et
seq., the Clean Air Act, 42 U.S.C. §7401 et seq., the Federal Water Pollution
Control Act, 33 U.S.C. §1251 et seq., the Oil Pollution Act of 1990, 33 U.S.C.
§2701 et seq., the 

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Hazardous Materials Transportation Safety and Security Reauthorization Act of
2005, 49 U.S.C. §5101 et seq., the Toxic Substances Control Act, 15 U.S.C. §2601
et seq., the U.S. Maritime Transportation Security Act of 2002, 46 U.S.C. §2101
et seq., and all similar laws, regulations, and requirements of any governmental
authority or agency having jurisdiction over Borrower or any of its properties
or assets, as such laws, regulations, and requirements may be amended or
supplemented from time to time.

"Mortgage" means Borrower's Preferred Ship Mortgage in favor of Lender of even
date herewith, to be recorded in the Marshall Islands maritime registry,
together with any amendments and supplements thereto.

"Note" shall mean Borrower's Promissory Note of even date herewith payable to
the order of Lender in the principal amount of $13,622,321.46, together with any
amendments thereto and renewals, replacements and refinancings thereof.

"Vessel" means the vessel 114/V "Green Wave", Marshall Islands official number
4991, Call Sign V7A66, together with all engines, boilers, machinery, masts,
boats, anchors, cables, chains, rigging, tackle, apparel, furniture, winches,
capstans, outfit, tools, pumps, gears, furnishings, appliances, fittings,
navigation and communications equipment, computers, stores, spares and other
appurtenances thereto appertaining or belonging to any such vessel, whether now
owned or hereafter acquired.

The following terms shall have the following meanings when used in this
First Amendment:

"Applicable Foreign Jurisdictions" means the Marshall Islands or any foreign
jurisdiction having jurisdiction over either the Borrower or the Vessel.

"Prior Note" shall mean Waterman Steamship Corporation's Promissory Note dated
December 28, 2011 payable to the order of Lender in the principal amount of
$15,675,000.00, together with any amendments thereto and renewals, replacements
and refinancings thereof.

Section 1.03 Accounting Terms. Unless otherwise specified herein, all accounting
terms used herein shall be interpreted, all accounting determinations hereunder
shall be made, and all financial statements and certificates and reports as to
financial matters required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles for the United States
("GAAP") as amended from time to time, including amendments to GAAP made as a
result of the conforming of GAAP to International Financial Reporting Standards,
provided, however, that for purposes of determining Guarantor's ratios and
covenants set forth in Section 7.01, GAAP shall be GAAP in effect as of
September 30, 2011.

 

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ARTICLE 2

Section 2.01A  Assumption of Obligations of Seller under Related
Documents. Borrower hereby presently and unconditionally assumes all present and
fixture obligations of Seller under the Related Documents, whether now existing
or hereafter arising, including all present and future Indebtedness of Seller
under the Original Loan Agreement, the Prior Note and all other Related
Documents executed in connection therewith. Guarantor is and shall remain fully
and solidary bound as guarantor in connection with all such Indebtedness, and
Lender shall retain all of its rights and remedies against Guarantor in
connection therewith.

Seller shall be released from its obligations under the Related Documents, upon
the fulfillment of all of the conditions set forth in Section 2.02A and this
First Amendment. Nothing herein shall be deemed in any way to limit Lender's
first priority security and mortgage interest in the Collateral, or its rights
and remedies with respect to such Collateral, which shall remain in full force
and effect. Once the conditions to this First Amendment have been satisfied, all
references to "Borrower" in the Related Documents shall be to Borrower, unless
the context otherwise expressly requires, and to the "Collateral Documents"
shall be the Guaranty, as well as the Mortgage and the Assignment and Security
Agreement executed in connection herewith.

Borrower's obligation under the Prior Note shall be evidenced by the Note, which
shall be dated of even date herewith, in the current principal balance of the
Indebtedness. All references in the Related Documents to the "Note" shall be to
such replacement note, together with any amendments thereto and renewals,
replacements and refinancings thereof.

In connection with the reflagging of the Vessel, Lender has been requested to
consent, and subject to the terms and conditions of this First Amendment does
consent, to the sale of the Vessel to Borrower and the discharge of record of
Lender's existing Mortgage on the Vessel filed with the National Vessel
Documentation Center, on the condition that Borrower execute the replacement
Mortgage on the Vessel for filing with the Marshall Islands maritime registry
authorities, and execute a new security agreement (the "Assignment and Security
Agreement") in which Borrower grants to Lender a first priority security
interest in the Vessel Related Collateral, and the other terms and conditions
set forth herein.

Section 2.02A Conditions Precedent to Lender's Consent. Lender's consent to the
sale of the Vessel to Borrower, the discharge of record of its existing mortgage
on the Vessel with the National Vessel Documentation Center, and the
consummation of the agreements contained herein, is conditioned on the
following:

(a) Lender shall have received evidence that this First Amendment and all other
Related Documents, including theMortgage, the Note and the Assignment and
Security Agreement and other documents reasonably required under this First
Amendment by Lender or its counsel, have been duly authorized, executed, and
delivered by Borrower to Lender.

 

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(b) Lender, if requested, shall have received such opinions of counsel,
supplemental opinions, and documents as Lender may request.

(c) Lender's security interests in the Collateral shall have been duly
authorized, created, and perfected with first lien priority and shall be in full
force and effect and Lender shall have received evidence, acceptable to Lender,
of the priority of Lender's security interests in the Collateral as contemplated
by the Agreement.

(d) Lender shall have received confirmation of Guarantor's continuing guaranty
of the Indebtedness.

(e) Borrower shall have paid to Lender all other fees, costs, and expenses
(including reasonable attorney's fees) specified in this First Amendment and the
other Related Documents as are then due and payable.

(f) Lender shall have received a certified copy of resolutions properly adopted
by Borrower's directors, and certified by Borrower's secretary or assistant
secretary under which one or more designated representatives, on behalf of
Borrower, either directly or through power of attorney to third person agents,
are authorized to execute this First Amendment and all other Related Documents
executed and to be executed by Borrower, to consummate the borrowings,
assumptions and other transactions as contemplated hereunder, and to consent to
the remedies following such Borrower's default as provided herein and under the
other Related Documents executed and to be executed by Borrower. Lender shall
have received a copy of Borrower's articles of incorporation, certified by
Borrower's secretary or assistant secretary and a current certificate of good
standing from the Marshall Islands with respect to Borrower.

(g) Lender shall have received all applicable documents required to reflag the
Vessel with the Marshall Islands.

(j) Lender shall have received a certificate of insurance or cover note
evidencing the placement of all insurance policies required under the Agreement,
together with loss payable and other required endorsements in favor of the
Lender.

(l) The representations and warranties set forth in this First Amendment and the
other Related Documents, and in any document or certificate delivered to Lender
under this First Amendment are and remain true and correct with respect to
Borrower and Guarantor.

(m) There shall not exist a condition which would constitute an Event of Default
under the Agreement.

 

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ARTICLE 3

THE COLLATERAL

Section 3.01A Collateral. The Indebtedness will be fully secured by a first
priority

preferred mortgage on the Vessel under the laws of the Republic of the Marshall
Islands, as well as a first priority security interest in all Vessel Related
Collateral.

Section 3.02A Perfection of Security Interests. Borrower agrees to take whatever
actions are reasonably requested by Lender to perfect and continue Lender's
mortgage security interests in the Collateral. Lender is authorized to file one
or more UCC financing statements with respect to the Collateral, without
Borrower's signature, in written or electronic format. Borrower hereby appoints
Lender as its irrevocable attorney-in-fact for the purpose of executing any
documents necessary to perfect or to continue any security interest in the
Collateral. Borrower promptly will notify Lender of any change in Borrower's
name or employer identification number including any change to the assumed
business names of Borrower. Borrower further agrees to notify Lender in writing
prior to any change in address or location of Borrower's chief executive office
or should Borrower merge or consolidate with any other entity or change its
state of incorporation.

Section 3.03A Mortgage. Borrower will observe and perform all of its obligations
with

respect to the Collateral, including the maintenance, preservation, and insuring
thereof, set forth in the Mortgage.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

In order to induce the Lender to enter into this First Amendment, Borrower
represents and warrants to the Lender (which representations and warranties will
survive the extensions of credit under the Agreement) as follows. The following
representations shall govern in place of any inconsistent representations and
warranties contained in the Original Loan Agreement:

Section 4.01A Borrower's Existence. Borrower is a corporation duly organized,
legally existing under the laws of the Marshall Islands and is duly qualified as
a corporation in all jurisdictions wherein the property it owns or the business
it transacts make such qualification necessary.

Section 4.02A Names of Borrower. Borrower has not done business under any name
other than the name of the Borrower set forth above.

Section 4.03A Borrower's Power and Authorization. Borrower is duly authorized
and

empowered to execute, deliver and perform this First Amendment, the Note and the
Collateral Documents executed by it. All corporate action on the part of
Borrower requisite for the due

 

 

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execution and delivery of this First Amendment, the Note and Collateral
Documents has been duly and effectively taken.

Section 4.04A Review of Documents; Binding Obligations. Borrower has reviewed
this First Amendment, the Note and the Collateral Documents with counsel for
Borrower and has had the opportunity to discuss the provisions hereof and
thereof with the Lender prior to execution. This First Amendment, the Original
Loan Agreement as amended hereby, the Note and the Collateral Documents
constitute valid and binding obligations of Borrower or the Guarantor, as the
case may be, that are parties thereto, enforceable in accordance with their
terms (except that enforcement may be subject to any applicable bankruptcy,
insolvency or similar laws generally affecting the enforcement of creditors'
rights).

Section 4.05A No Legal Bar or Resultant Lien. This First Amendment, the Original
Loan Agreement as modified hereby, the Note and the Collateral Documents do not
and will not violate any provisions of Borrower's articles of incorporation or
bylaws, will not violate any contract, agreement, law, regulation, order,
injunction, judgment, decree or writ to which Borrower is subject, and will not
result in the creation or imposition of any Lien upon any property of Borrower
other than as contemplated by this Agreement.

Section 4.06A No Consent. The execution, delivery and performance of this First
Amendment, the Note and the Collateral Documents by Borrower and Guarantor that
to the extent they are party thereto, do not require the consent or approval of
any other Person, including without limitation any regulatory authority or
governmental body of the United States or any state thereof or any political
subdivision of the United States or any state thereof, or the Republic of the
Marshall Islands, except for such consents that have been duly and validly
obtained on or prior to the date hereof and remain in full force and effect.

Section 4.07A Financial Condition. All financial statements of Borrower, the
Guarantor and any consolidated subsidiaries delivered to Lender fairly and
accurately present the financial condition of the parties for whom such
statements are submitted and the financial statements of Borrower and the
Guarantor and any consolidated subsidiaries have been prepared in accordance
with the standards specified in Section 1.03 throughout the periods involved,
and there are no contingent liabilities not disclosed thereby which would
adversely and materially affect the financial condition of such Person. Since
the close of the period covered by the latest financial statements delivered to
Lender with respect to Borrower, the Guarantor and any consolidated
subsidiaries, there has been no material adverse change in the assets,
liabilities, or financial condition of Borrower or the Guarantor. No event has
occurred (including, without limitation, any litigation or administrative
proceedings) and no condition exists or, to the knowledge of Borrower or the
Guarantor, is threatened, which (i) might render Borrower or the Guarantor
unable to perform their obligations under this First Amendment, the Original
Loan Agreement as modified hereby, the Note or the Collateral Documents, or (ii)
would constitute a Default hereunder, or (iii) might adversely and materially
affect the financial condition of Borrower or the Guarantor or the validity or
priority of the lien established under the Collateral Documents.

 

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Section 4.08A Taxes and Governmental Charges. Borrower and the Guarantor have
filed all tax returns and reports required to be filed and have paid all taxes,
assessments, fees and other governmental charges levied upon them or upon their
respective property or income which are due and payable, including interest and
penalties, or have provided adequate reserves for the payment thereof.

Section 4.09A Defaults. Borrower is not in default under any indenture,
mortgage, deed of trust, agreement or other instrument to which Borrower is a
party or by which it is bound.

Section 4.10A Margin Stock. None of the proceeds of the Loan will be used for
the purpose of, and Borrower is not engaged in the business of, extending credit
for the purpose of purchasing or carrying any "margin stock" as defined in
Regulation U of the Board of Governors of the Federal Reserve System (12 C.F.R.
Part 221), or for the purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry a margin stock or for any other purpose
which might constitute this transaction a "purpose credit" within the meaning of
said Regulation U. Borrower is not engaged principally, or as one of Borrower's
important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stocks. Neither Borrower nor any Person acting on
behalf of Borrower has taken or will take any action which might cause the
Agreement to violate Regulation U or any other regulation of the Board of
Governors of the Federal Reserve System or to violate the Securities Exchange
Act of 1934 or any rule or regulation thereunder, in each case as now in effect
or as the same may hereinafter be in effect.

Section 4.11A Compliance with the Law. Borrower, to the best of its knowledge
(i) is not in material violation of any law, judgment, decree, order, ordinance,
or governmental rule or regulation to which Borrower or any of its property are
subject; and (ii) has not failed to obtain any license, permit, franchise or
other governmental authorization necessary to the ownership of any of its
property or the conduct of its business; in each case, which violation or
failure could reasonably be anticipated to materially and adversely affect the
business, profits, property or condition (financial or otherwise) of Borrower.

Section 4.12A Other Information. All information, reports, papers and data given
to the Lender by Borrower or the Guarantor pursuant to this First Amendment, the
Agreement and in connection with Borrower's application for the Loan are
accurate and correct in all material respects. All financial projections given
to the Lender were prepared in good faith based on facts and circumstances
existing at the time of preparation and were believed by Borrower to be accurate
in all material respects. No information, exhibit or report furnished by
Borrower or the Guarantor to the Lender in connection with the negotiation of
this First Amendment or the Original Loan Agreement contains any material
misstatement of fact or fails to state a material fact or any fact necessary to
make the statement contained therein not materially misleading.

Section 4.13A Title to Collateral. Borrower has good and merchantable title to
the Collateral encumbered by it under the Collateral Documents, free of all
liens and encumbrances except those created in favor of the Lender and Permitted
Liens, and all security interests of any other Person other than Lender have
been or will be terminated in their entirety simultaneously

 

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with the Agreement. Furthermore, Borrower has not heretofore conveyed or agreed
to convey or encumber any Collateral in any way, except in favor of the Lender
or in connection with Permitted Liens, or in connection with security interests
that have been terminated or will be terminated simultaneously herewith.

Section 4.14A Environmental Matters.

(a) Borrower and its subsidiaries, and all of their respective properties,
assets, and operations, are in material compliance with all Environmental Laws.
Borrower is not aware of, nor has Borrower received notice of, any past,
present, or fixture conditions, events, activities, practices, or incidents
which may interfere with or prevent the material compliance or continued
material compliance of Borrower or its subsidiaries with any Environmental Laws.

(b) Borrower has obtained all material permits, licenses, and authorizations
which are required in connection with its operations under applicable
Environmental Laws, including all certificates of inspection required with
respect to the Vessel under applicable federal law. Borrower has filed, and
maintained in current force and effect, all certificates of financial
responsibility required in connection with its operations under applicable
Environmental Laws. Bon-ower maintains all material record and documents
required under applicable Environmental Laws, including voyage manifests and
lists of cargo containing Environmentally Sensitive Materials. Any certificate
of inspection required with respect to any Vessel will be obtained prior to the
Vessel undertaking operations, and there are no material deficiencies with
respect to inspection, repair or condition noted in any governmental inspection
report with respect to the Vessel.

(c) There is no material action, suit, proceeding, investigation, or inquiry
before any court, administrative agency, or other governmental authority pending
or, to the knowledge of Borrower, threatened against Borrower or its
subsidiaries relating in any way to any Environmental Law. Borrower (i) has no
liability for any material remedial action under any Environmental Law, (ii) has
received no request for information by any governmental authority with respect
to the condition, use, or operation of any of its properties or assets (other
than routine requests for information in the ordinary course of business and not
related to a violation or potential violation of the Environmental Laws or the
release of Environmentally Sensitive Materials), and (iii) has received no
notice from any governmental authority or other Person with respect to any
material violation of or liability under any Environmental Law.

(d) No Lien arising under any Environmental Law has attached to any of the
properties or assets of Borrower.

(e) No circumstances exist that are reasonably likely to (i) form the basis of
an Environmental Action against the Borrower or any of its respective properties
or (ii) cause any such property to be subject to any restrictions on ownership,
occupancy, use or transferability under any Environmental Law that would, in the
case of either (i) or (ii) above, be reasonably likely to have a material
adverse effect on the Borrower, and no Environmental Incident has occurred that
is likely to give rise to any material Environmental Action.

 

 

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Section 4.15A Litigation. There are no suits or proceedings pending, or to the
knowledge of Borrower, threatened against or affecting Borrower, Guarantor, or
the assets of Borrower or Guarantor, before any court or by any governmental
agency, which, if adversely determined, may have a material adverse effect on
the financial condition or business of Borrower or Guarantor.

Section 4.16A Taxes. To the best of Borrower's knowledge, all tax returns and
reports of Borrower that are or were required to be filed, have been filed, and
all taxes, assessments and other governmental charges have been paid in full,
except those presently being or to be contested by Borrower in good faith in the
ordinary course of business and for which adequate reserves have been provided.

Section 4.21A Debt. Guarantor's consolidating financial statement accurately
reflects all of Borrower's Debt.

Section 4.22A Citizenship. Borrower is and will remain domiciled in the Marshall
Islands. Borrower is not a "national" of any "enemy country" as defined in any
statute or executive order of the United States, or of any regulations, rules,
interpretations or rulings issued thereunder, and Borrower is not acting on
behalf of, or for the benefit of, any foreign country which, or for which,
actions on behalf of such country are prohibited by any statute of the United
States or any regulations or rulings issued thereunder.

All information heretofore or contemporaneously herewith furnished by Borrower
to Lender for the purposes of or in connection with this First Amendment or any
transaction contemplated hereby is, and all information hereafter furnished by
or on behalf of Borrower to Lender will be, true and accurate in every material
respect on the date as of which such information is dated or certified; and none
of such information is or will be incomplete by omitting to state any material
fact necessary to make such information not misleading. Borrower understands and
agrees that Lender is relying upon the above representations and warranties in
making the Loan and extending Advances to Borrower. Borrower further agrees that
the foregoing representations and warranties shall be continuing in nature and
shall remain in full force and effect until such time as the Indebtedness shall
be paid in full.

ARTICLE 5

AFFIRMATIVE COVENANTS

Borrower covenants and agrees with Lender that, so long as the Agreement remains
in effect, Borrower (if such covenant applies to such Borrower) will perform all
obligations of the "Borrower" contained in Article 5 of the Original Loan
Agreement; provided, that the covenants contained in Section 5.06A below shall
replace the provisions of Section 5.06 contained in the Original Loan Agreement.
Sections 5.07, 5.16 and other provisions of the Agreement pertaining to the MSC
Charter, are deleted:

 

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Section 5.06A. Certificates of Documentation; Society Documentation. If
requested by Lender, within a reasonable period following receipt, copies of the
Vessel's annual certificate of documentation with respect to the Vessel issued
by the Marshall Islands. If available and if requested by Lender, within a
reasonable period following receipt, copies of any periodic renewal of any
classification society certificate, confirming the continuing satisfaction of
all classification society requirements.

Section 5.22A Stamp, Duty, Documentary and Withholding Taxes. No stamp, duty or
documentary taxes or charges imposed by any government or any taxing authority
are payable on or in connection with the Agreement, the Note, the Related
Documents to which Borrower is a party or any related documents. Borrower has
paid or shall pay when due all applicable deductions or withholdings for or on
account of any Taxes, levies, duties, fees, deductions or withholding,
restrictions or conditions of any nature imposed by or on behalf of the Marshall
Islands or any Applicable Foreign Jurisdictions or any taxing authority
whatsoever on the payments by Borrower to Lender.

Section 5.23A No Exchange Approvals. There are no exchange approvals required
for the execution of the Agreement, the Note, or the other Related Documents to
which Borrower is a party and the Borrower will be permitted to purchase
sufficient freely transferable United States dollars for the payment of all
amounts due under such agreements and documents.

Section 5.24A Civil Acts; No immunity. Borrower is subject to civil and
commercial law with respect to its obligations under the Agreement. Each of
Borrower's Guarantors is subject to civil and commercial law with respect to its
obligations under any guaranty to which it is a party. Each of the execution,
delivery and perfoiniance of the Agreement and the other Related Documents by
Borrower and the execution, delivery and performance of any Collateral Documents
by any of Borrower's guarantors constitutes a commercial act as opposed to a
governmental act. Neither. Borrower nor any of its guarantors (nor the property
of each) enjoy, in the courts or under the laws of any Applicable Foreign
Jurisdictions any right of immunity from suit, setoff or attachment or execution
on a judgment in respect of the obligations of Borrower or any of its Guarantors
under the Agreement or any other Loan Document.

Section 5.25A No Presence or Registration Required of Lender. The Lender will
not be deemed to be a resident of the Applicable Foreign Jurisdictions as a
result of the Loan made to the Borrower hereunder, and the Lender will not be
required to be licensed or in any way qualified to do business in the Applicable
Foreign Jurisdictions in order to enforce its rights under the Agreement or any
Loan Document.

Section 5.26A Legal Effect. Except for (i) any registration requirements
necessary to reflect the transfer and sale of the Vessel to the Borrower, and
(ii) the recordation of the Mortgage over the Vessel, no Loan Document is
required to be filed or recorded with any court or any other authority in any of
the Applicable Foreign Jurisdictions to ensure the validity of the obligations
of the Borrower and the admissibility in evidence of the Loan Documents.

 

 

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ARTICLE 6

NEGATIVE COVENANTS

Borrower covenants and agrees with Lender that as long as the Agreement remains
in effect Borrower shall not, without the prior written consent of Lender:

Section 6.01A Disposition of Collateral. Except for a Permitted Lien or the
charter of the Vessel during the ordinary course of Borrower's business, sell,
transfer, mortgage, assign, pledge, lease, grant a security interest in, or
encumber any of the Collateral.

Section 6.02A Continuity of Operations; Corporate Structure and
Identity;  Change of Control. (a) Engage in any business activities
substantially different than those in which Borrower is presently engaged, (b)
cease operations, liquidate, merge, transfer, acquire or consolidate with any
other entity, where Borrower is not the surviving entity, or (c) change its
taxpayer identification number, operate under another or additional taxpayer
identification number from the one currently employed, or change the nation of
its organization from the Republic of the Marshall Islands to any other state or
jurisdiction,

Section 6.03A Change of Control. Fail to prevent any transfer of any outstanding
equity interests of Borrower to one or more Persons, where Borrower is not the
wholly owned subsidiary of Guarantor (such a transfer, a "Change of Control").

ARTICLE 7

FINANCIAL COVENANTS

Section 7.01. Financial Covenants. Guarantor covenants and agrees with Lender
that Guarantor shall continue to comply with the financial covenants contained
in Article 7 of the Original Loan Agreement.

ARTICLE 8

DEPOSIT ACCCOUNTS

Section 8.02A.  Deposit Accounts. As collateral security for repayment of the

Indebtedness, Borrower hereby grants Lender a continuing security interest in
any and all funds that Borrower may now and in the future have on deposit with
Lender or in certificates of deposit or other deposit accounts as to which
Borrower is an account holder (with the exception of IRA, pension, and other
tax-deferred deposits). Borrower further agrees that Lender may, at any time
following the occurrence and during the continuance of an Event of Default or
when Lender reasonably deems itself to be insecure, apply any funds that
Borrower may have on deposit with Lender or in certificates of deposit or other
deposit accounts as to which Borrower is an account holder (with the exception
of IRA, pension and other tax-deferred deposits) against the unpaid balance of
Borrower's Note(s) and any and all other present and future indebtedness and
obligations that Borrower may then owe to Lender, in principal, interest, fees,
costs, expenses, and reasonable attorneys' fees.

 

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ARTICLE 10

GENERAL PROVISIONS

Section 10.01A  Notices. Any notice or demand which, by provision of the
Agreement, is required or permitted to be given or served by the Lender to or on
Borrower or to Guarantor shall be deemed to have been sufficiently given and
served for all purposes (if mailed) three calendar days after being deposited,
postage prepaid, in the United States Mail, registered or certified mail, or (if
delivered by express courier) one Business Day after being delivered to such
courier, or (if delivered in person) the same day as delivery, in each case
addressed (until another address or addresses is given in writing by Borrower to
Lender) as follows:

LCI Shipholdings, Inc.

11 North Water Street

Suite 18290

Mobile, AL 36602

Attention: Chief Financial Officer

Any notice or demand which, by any provision of this Agreement, is required or
permitted to be given or served by Borrower or Guarantor to or on Lender shall
be deemed to have been sufficiently given and served for all purposes (if
mailed) three calendar days after being deposited, postage prepaid, in the
United States Mail, registered or certified mail, or (if delivered by express
courier) one Business Day after being delivered to such courier, or (if
delivered in person) the same day as delivery, in each case addressed (until
another address or addresses are given in writing by Lender to Borrower) as
follows:

Capital One, National Association

201 St. Charles Avenue 29th Floor

New Orleans, LA 70170 Attention: Al Kropag

Section 10.02A Entire Agreement. This First Amendment, the Original Loan
Agreement as amended hereby, the Note and the Collateral Documents now, or
hereafter to be, executed set forth the entire agreement of the Lender and the
Borrower and supersede all prior written or oral understandings with respect
thereto.

Section 10.04A Amendment. Neither this Agreement nor any provisions hereof may
be changed, waived, discharged or terminated orally or in any manner other than
by an instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought.

Section 10.05A Invalidity. In the event that any one or more of the provisions
contained in the Agreement, the Note or the Collateral Documents shall, for any
reason, be held

 

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invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement, the
Note or the Collateral Documents.

Section 10.06A Survival of Agreements. All representations and warranties of
Borrower herein, and all covenants and agreements herein not fully performed
before the date of this First Amendment, shall survive such date.

Section 10.07A Waivers. No course of dealing on the part of the Lender, its
officers, employees, consultants or agents, nor any failure or delay by the
Lender with respect to exercising any of its rights, powers or privileges under
this Agreement, the Note or the Collateral Documents shall operate as a waiver
thereof.

Section 10.08A Cumulative Rights. The rights and remedies of the Lender under
the Agreement, the Note and the Collateral Documents shall be cumulative, and
the exercise or partial exercise of any such right or remedy shall not preclude
the exercise of any other right or remedy.

Section 10.15A GOVERNING LAW. THIS FIRST AMENDMENT IS, AND THE NOTE WILL BE,
CONTRACTS MADE UNDER AND SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE UNITED STATES OF AMERICA AND THE STATE OF LOUISIANA.

Section 10.16A Counterparts. This First Amendment may be executed in two or more
counterparts, and it shall not be necessary that the signatures of all parties
hereto be contained on any one counterpart hereof; each counterpart shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

Section 10.18A Fees and Costs. Borrower agrees to pay, upon demand, all of
Lender's out-of-pocket expenses, including reasonable attorneys' fees, incurred
in connection with the preparation, execution, enforcement and collection of
this First Amendment or in connection with the Loan made pursuant to the
Agreement. If an Event of Default occurs, Lender may pay someone else to help
collect the Loan and to enforce the Agreement, and Borrower will pay that
amount. This includes, subject to any limits under applicable law, Lender's
reasonable attorneys' fees and Lender's legal expenses, whether or not there is
a lawsuit, including reasonable attorneys' fees for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services. Borrower also
will pay any court costs, in addition to all other sums provided by law.

Section 10.19A Guarantor Confirmation. AND INTO THESE PRESENTS INTERVENES the
undersigned Guarantor, who acknowledges and consents to the execution and
delivery of this First Amendment by Borrower, and further acknowledges that such
guarantor's guaranty of the Indebtedness, remains in full force and extent.

 

 

[Signatures to follow on next page]

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