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Exhibit 10.3
 
 
SECOND AMENDMENT TO LOAN AGREEMENT
 
THIS SECOND AMENDMENT TO LOAN AGREEMENT, dated as of August 1, 2012 (this
“Amendment”), to the Existing Loan Agreement (as defined below) is among GENCO
SHIPPING & TRADING LIMITED, a company organized and existing under the laws of
the Republic of the Marshall Islands (the “Borrower”), the companies listed in
Schedule 2 to the Existing Loan Agreement (the “Guarantors”), the Lenders (as
such term is defined in the Existing Loan Agreement) signatory hereto (which
Lenders constitute all of the Lenders (the “Consenting Lenders”)), CRÉDIT
AGRICOLE CORPORATE AND INVESTMENT BANK, in its capacity as Agent (the “Agent”),
and CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, in its capacity as Security
Trustee (the “Security Trustee”).
 
W I T N E S S E T H:
 
WHEREAS, pursuant to the Loan Agreement, dated August 12, 2010, as amended by
the First Amendment to Loan Agreement (the “First Amendment”), dated December
21, 2011 (as further amended, supplemented, amended and restated or otherwise
modified prior to the date hereof, the “Existing Loan Agreement”), among the
Borrower, the Guarantors, the Lenders, the Agent and the Security Trustee, the
Lenders have agreed to make, and have made, Loans to the Borrower;
 
WHEREAS, the Borrower intends to prepay (i) eleven million five hundred and
thirty-eight thousand four hundred and fifty Dollars ($11,538,450) of the Loan,
(ii) fifty seven million eight hundred and ninety-three thousand four hundred
and seventy-five Dollars ($57,893,475) under the DnB Credit Facility, and (iii)
thirty million four hundred and fifty thousand Dollars ($30,450,000) under the
DB Credit Facility;
 
WHEREAS, the Borrower has requested and the Consenting Lenders have agreed,
subject to the terms and conditions of this Amendment, that (i) the temporary
suspension of the undertakings contained in Clauses 12.2(d) and 12.2(e) of the
Existing Loan Agreement be extended through the period ending on (and including)
December 31, 2013, (ii) a guarantee by each Guarantor, a second priority
Liberian ship mortgage over each Vessel and an assignment of the insurances of
each Vessel be granted in favor of the Second Mortgagee (as defined below) to
secure the obligations of the Borrower under the DnB Credit Facility, and (iii)
a cash sweep mechanism be implemented in connection with the intended prepayment
under the DnB Credit Facility; and
 
WHEREAS, the Borrower, the Guarantors and the Consenting Lenders have agreed to
certain other amendments to the Existing Loan Agreement.
 
NOW, THEREFORE, in consideration of the premises and such other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged by the parties, it is hereby agreed as follows:
 
 
 
 

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1.           Definitions.  Unless otherwise defined herein, words and
expressions defined in the Existing Loan Agreement have the same meanings when
used herein, including in the recitals hereto.
 
2.           Representations and Warranties.  To induce the Consenting Lenders
to enter into this Amendment, each Obligor jointly and severally represents and
warrants to each Credit Party that as of the date hereof:
 
(a)           The Borrower and each Guarantor have the power and authority to
execute and deliver this Amendment and to perform its obligations hereunder and
has taken all necessary action to authorize the execution, delivery and
performance by it of this Amendment.
 
(b)           The Borrower and each Guarantor have duly executed and delivered
this Amendment, and this Amendment constitutes the legal, valid and binding
obligation of the Borrower and of such Guarantor, enforceable against each such
Obligor in accordance with its terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency or other similar laws affecting the rights
of creditors generally or by general principles of equity.
 
(c)           There have been no changes to the Certificate of Incorporation or
By-Laws of any Obligor from the most recently delivered copies of such documents
delivered to the Agent in connection with the Existing Loan Agreement.
 
(d)           Each of the representations and warranties made by the Borrower
and each Guarantor in or pursuant to the Existing Loan Agreement or other
Finance Documents to which it is a party, including those representations and
warranties contained in Clause 11 of the Existing Loan Agreement, is true and
correct in all material respects on and as of the date hereof, as though made on
and as of the date hereof (except for those representations and warranties which
by their terms expressly related to an earlier date, in which case such
representations and warranties were true and correct in all material respects as
of such earlier date).
 
(e)           The Borrower and each Guarantor are in compliance with all of the
terms and provisions set forth in the Existing Loan Agreement and each other
Finance Document on its part to be observed or performed and no Event of Default
or Potential Event of Default has occurred and is continuing as of the date
hereof after giving effect to this Amendment.
 
3.           Amendments to the Existing Loan Agreement and other Finance
Documents.  Subject to the terms and conditions of this Amendment, the Existing
Loan Agreement and other Finance Documents are hereby amended as follows:
 
(a)           All references to “this Agreement” set forth in the Existing Loan
Agreement shall be deemed to refer to the Existing Loan Agreement, as amended
and supplemented hereby, and all references in the other Finance Documents to
“Loan Agreement” shall be deemed to refer to the Existing Loan Agreement as
amended and supplemented hereby.
 
 
 
 
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(b)           For the duration of the Ratio Suspension Period only, the
definition of “Consolidated Net Worth” set forth in Clause 1.1 of the Existing
Loan Agreement shall be amended to read in its entirety as follows:
 
“Consolidated Net Worth” shall mean the Net Worth of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with GAAP without
deductions for losses up to an aggregate amount of $200,000,000 during such
period that are attributable to the sale or other disposition of the capital
stock of Baltic Trading Limited, any assets owned by Baltic Trading Limited, any
vessel, or any vessel impairment or other asset write downs that in each case
are recognised under GAAP as a reduction of shareholders' equity.”
 
(c)           The definition of “Permitted Security Interest” set forth in
Clause 1.1 of the Existing Loan Agreement shall be amended by (i) deleting the
word “and” after paragraph (f) thereof, (ii) inserting the word “and” after
paragraph (g) thereof, and (iii) adding a new paragraph (h) to read in its
entirety as follows:
 
 
“(h)
each Second Mortgage and each Second Insurance Assignment;”

(d)           Clause 1.1 of the Existing Loan Agreement shall be amended to add
definitions of “Deed of Coordination,” “Second Insurance Assignment,” “Second
Mortgage.” “Second Mortgagee” and “Second Security Documents” to read in their
entirety as follows:
 
““Deed of Coordination” means the deed of coordination among the Borrower, each
Guarantor, the Second Mortgagee and the Security Trustee, dated August 1, 2012.

“Second Insurance Assignment” means, with respect to each Mortgaged Vessel, a
second priority assignment of the Insurances in respect of such Mortgaged Vessel
executed by the relevant Guarantor in favor of the Second Mortgagee, as security
for repayment of amounts due under the DnB Credit Facility.

“Second Mortgage” means, with respect to each Mortgaged Vessel, a second
preferred Liberian ship mortgage on that Vessel executed by the relevant
Guarantor in favor of the Second Mortgagee, as security for repayment of amounts
due under the DnB Credit Facility.

“Second Mortgagee” means DNB Bank ASA, New York Branch (formerly known as DnB
NOR Bank ASA, New York Branch), as security trustee and collateral agent for the
lenders under the DnB Credit Facility.

“Second Security Documents” means the Second Insurance Assignments and the
Second Mortgages, collectively.”
 
 
 
 
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(e)           Clause 5.8 of the Existing Loan Agreement shall be amended by
adding the following proviso as a new paragraph following clause (c) to read in
its entirety as follows:
 
“provided, however, that in the case of either clause (a) or clause (b) of this
Clause 5.8 and subject to Clause 5.12, until the later of (i) the end of the
Ratio Suspension Period and (ii) the release and discharge of all of the Second
Mortgages, if the sale proceeds (in the case of clause (a)) or the proceeds of
insurance (in the case of clause (b)) exceed the amount necessary to prepay the
Loan related to the Vessel which was sold or lost, the Borrower shall be obliged
to prepay the remaining Loans in an amount equal to such excess.”

(f)           Clause 12.2(h) of the Existing Loan Agreement shall be amended by
deleting “and” after clause (iii) thereof, inserting “and” after clause (iv)
thereof and inserting a new clause (v) to read in its entirety as follows:
 
 
“(v)
Indebtedness of the Guarantors evidenced by the Second Security Documents;”

(g)           Clause 12.2(i)(iii) of the Existing Loan Agreement shall be
amended to read in its entirety as follows:
 
 
“(iii)
the Guarantors may make intercompany loans and advances to the Borrower and
between or among one another, and Subsidiaries of the Borrower other than the
Guarantors may make intercompany loans and advances to the Borrower or any other
Subsidiary of the Borrower, provided that any loans or advances to the Borrower
or any Guarantors pursuant to this Clause 12.2(i) shall be subordinated to the
obligations of the respective Obligor under this Agreement on the following
terms:

 
(A)
Prohibited Payments.  Except when an Event of Default has occurred and is
continuing, the Guarantor or Subsidiary (the “Subordinated Lender”) which made
such loan or advance (the “Subordinated Obligations”) may receive payments on
account of the Subordinated Obligations.  After the occurrence and during the
continuation of an Event of Default, except with the prior written consent of
the Security Trustee, the Subordinated Lender shall not demand, accept or take
any action to collect any payment on account of the Subordinated Obligations.

 
(B)
Prior Payment of Loan Indebtedness.  In the event of the occurrence of any event
described in Clause 19.1(f) (Insolvency Proceedings) relating to any Obligor (an
“Insolvency Proceeding”), the Subordinated Lender agrees that the Security
Trustee and the other Credit Parties shall be

 
 
 
 
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entitled to receive payment in full of the Secured Liabilities (including all
interest and expenses accruing after the commencement of any Insolvency
Proceeding, whether or not constituting an allowed claim in such proceeding (the
“Post Claim Interest”)) before the Subordinated Lender receives payment of any
Subordinated Obligations.
 
 
(C)
Turn-Over.  Upon the occurrence and during the continuation of an Event of
Default, the Subordinated Lender shall, if the Security Trustee so requests,
collect, enforce and receive payment on account of the Subordinated Obligations
as trustee for the Security Trustee and the other Credit Parties and deliver
such payments to the Security Trustee on account of the Secured Liabilities
(including all Post Claim Interest), together with any necessary endorsements or
other instruments of transfer, but without reducing or affecting in any manner
the liability of the Subordinated Lender under the other provisions of this
Agreement.

 
(D)
Security Trustee’s Authorization.  Upon the occurrence and during the
continuation of an Event of Default, the Security Trustee is authorized and
empowered (but without any obligation to so do), in its discretion, (i) in the
name and on behalf of the Subordinated Lender, to collect and enforce, and to
submit claims in respect of, Subordinated Obligations and to apply any amounts
received thereon to the Secured Liabilities (including any and all Post Claim
Interest), and (ii) to require the Subordinated Lender (a) to collect and
enforce, and to submit claims in respect of, Subordinated Liabilities and (b) to
pay any amounts received on such obligations to the Security Trustee for
application to the Secured Liabilities (including any and all Post Claim
Interest).

 
(E)
Confirmation of Subordination.  The Borrower and the Guarantors hereby agree
that all existing and future Subordinated Obligations (i) of the Borrower to any
Guarantor, and (ii) of one Guarantor to another Guarantor, are hereby
subordinated to the obligations of the respective Obligor under this Agreement
on the foregoing terms.

(h)           Clause 12.2 of the Existing Loan Agreement shall be amended by
adding a new sub-clause (l) to read in its entirety as follows:
 
“(l)           Vessel Acquisition Indebtedness. not, and will not permit any of
its Subsidiaries (other than Baltic Trading Limited or its Subsidiaries) to,
 
 
 
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contract, create, incur, assume or suffer to exist any Indebtedness in
connection with the acquisition of a vessel in excess of 60% of the acquisition
cost of such vessel, except for any indebtedness incurred prior to August 1,
2012.”

(i)           Clause 18.1(c) of the Existing Loan Agreement shall be amended by
inserting the phrase “including, without limitation, pursuant to the Deed of
Coordination” at the end thereof.
 
(j)           The definition of “Ratio Suspension Period” set forth in the First
Amendment shall be amended to mean the period commencing on October 1, 2011 and
ending on (and including) December 31, 2013.
 
(k)           The definition of “Additional Covenant Period” set forth in
Section 4(c)(ii) of the First Amendment shall be amended to mean the period from
December 21,  2011 through (and including) December 31, 2013.
 
(l)           Section 4(b) of the First Amendment shall be amended by (i)
deleting the parenthetical “(as defined in the following sentence)” in the first
sentence thereof and (ii) deleting the second sentence thereof in its entirety.
 
(m)           Section 4(c) of the First Amendment shall not apply to any
Additional Covenant included in the DnB Credit Agreement or the DB Credit
Facility by any amendment executed on or before the date of this Amendment,
provided that the Agent has been provided with a copy of any such amendment and
the Borrower shall not agree to any amendment or other modification of any such
Additional Covenant during the Additional Covenant Period without the prior
written consent of the Agent.
 
(n)           For the duration of the Additional Covenant Period, the Borrower
shall not change or agree to change the final maturity date under either the DnB
Credit Facility or the DB Credit Facility from that in effect on the Effective
Date.
 
4.           Fees and Expenses.  On or prior to the Effective Date, provided
this Amendment is effective, the Borrower shall pay each Consenting Lender an
amendment fee equal to 0.25% of the outstanding principal amount of such
Lender’s Loans (after giving effect to the prepayment of the Loan under Section
7(a)).  The Borrower shall pay promptly to the Agent all reasonable legal fees
incurred by the Agent in connection with the preparation and execution of this
Amendment.
 
5.           No Other Amendment, etc.  This Amendment shall not constitute an
amendment or waiver of or consent to any provision of the Existing Loan
Agreement or any other Finance Document not expressly referred to herein and
shall not be construed as an amendment, waiver or consent to any action on the
part of the Borrower or any other Obligor that would require an amendment,
waiver or consent of the Agent, the Security Trustee or the Lenders under any of
the Finance Documents except as expressly stated herein.  Except as expressly
amended hereby, the provisions of the Existing Loan Agreement and the other
Finance Documents shall remain unchanged and shall continue to be, and shall
remain, in full force and effect in accordance with their respective terms.
 
 
 
 
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6.           Other Documents.  By the execution and delivery of this Amendment,
the Borrower and each Guarantor hereby consents and agrees that the Finance
Documents and any other documents that have been or may be executed as security
for any of its obligations under the Existing Loan Agreement and the other
Finance Documents shall remain in full force and effect notwithstanding the
amendments and supplements contemplated hereby
 
7.           Conditions Precedent.  This Amendment shall be effective on the
date (the “Effective Date”) upon which the Agent has confirmed in writing to the
Borrower and each of the Consenting Lenders that each of the following
conditions precedent have been met or waived by the Agent:
 
(a)           Prepayment.  The Borrower shall have prepaid eleven million five
hundred and thirty-eight thousand four hundred and fifty Dollars ($11,538,450)
of the outstanding principal amount of the Loan.
 
(b)           Corporate Documents; Proceedings; etc.
 
(i)           The Agent shall have received a certificate, dated the date
hereof, signed by an authorized officer of each Obligor, and attested to by the
secretary or any assistant secretary of such Obligor, certifying copies of
resolutions of such Obligor approving and authorizing such Obligor to execute
this Amendment and each additional Finance Document to which it is a party, and
each of the foregoing shall be reasonably acceptable to the Agent.
 
(ii)           The Agent shall have received for each Obligor a certificate from
the Republic of the Marshall Islands as to the good standing of such Obligor.
 
(iii)           The Agent shall have received for each Guarantor a certificate
from the Republic of Liberia as to the good standing of such Obligor as a
foreign maritime entity in the Republic of Liberia.
 
(c)           Amendment and Finance Documents.
 
(i)           The Borrower and each Guarantor shall have executed and delivered
to the Agent this Amendment.
 
(ii)           The Agent, Security Trustee and each Consenting Lender shall have
executed and delivered to the Agent this Amendment.
 
(iii)           The Borrower, each Guarantor, the Second Mortgagee and the
Security Trustee shall have each executed and delivered to the Agent the Deed of
Coordination in the form attached as Exhibit A hereto, the execution and
delivery of which by the Security Trustee is hereby consented to by each of the
Consenting Lenders.
 
(iv)           Each Obligor shall have executed each additional Finance Document
as may be reasonably required by the Agent in connection with this Amendment.
 
 
 
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(d)           DnB Credit Facility and DB Credit Facility.  The Agent shall have
received true, correct, complete and accurate copies of each of the DnB Credit
Facility and the DB Credit Facility, each as in effect on the Effective Date,
including without limitation, any addendum, amendment or supplement executed on
or before the Effective Date.
 
(e)           Payment of Fees.  The Agents and the Lenders shall have received
from the Borrower payment of all fees in connection with this Amendment,
including such fees as are set forth in Section 4 hereof.
 
(f)           No Material Adverse Effect. As of the date hereof, no Material
Adverse Effect, nor anything that could reasonably be expected to have a
Material Adverse Effect, shall have occurred since December 21, 2011.
 
(g)           Financial Information.  The Agent shall have received such
financial and other information concerning the Borrower as it may reasonably
request.
 
(h)           Opinions of Counsel.  The Agent shall have received from Orrick,
Herrington & Sutcliffe LLP, an opinion addressed to the Agent and each of the
Lenders and dated the date hereof which shall be in form and substance
reasonably acceptable to the Agent and cover such matters incidental to the
transactions contemplated herein as the Agent may reasonably request.
 
8.           Application of Prepayment.
 
(a)           Notwithstanding Clause 5.10 of the Existing Loan Agreement, the
prepayment of the Loan referred to in Section 7(a) above shall be applied
against repayment installments specified in Clause 5.1 of the Existing Credit
Agreement in order of maturity.  For the avoidance of doubt, no further
repayment installments shall be required from the Effective Date through and
including December 31, 2013, with the next repayment installment to be due on
March 31, 2014.
 
(b)           Clause 5.5 (except Clause 5.5(c)) of the Existing Loan Agreement
shall not apply to the prepayment referred to in Sections 7(a) and 8(a) above.
 
9.           Governing Law, Etc.
 
(a)           English Law.  This Amendment shall be governed by, and construed
in accordance with, English law.
 
(b)           Exclusive English Jurisdiction.  Subject to Section 8(c), the
courts of England shall have exclusive jurisdiction to settle any disputes which
may arise out of or in connection with this Amendment.
 
(c)           Choice of Forum for Exclusive Benefit of Creditor
Parties.  Section 8(b) is for the exclusive benefit of the Creditor Parties,
each of which reserves the rights:
 
 
 
 
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(i)           to commence proceedings in relation to any matter which arises out
of or in connection with this Amendment in the courts of any country other than
England and which have or claim jurisdiction to that matter; and
 
(ii)           to commence such proceedings in the courts of any such country or
countries concurrently with or in addition to proceedings in England or without
commencing proceedings in England.
 
10.           Further Assurances.  The Borrower and each Guarantor hereby
consents and agrees that if this Amendment or any of the other Finance Documents
shall at any time be deemed, in the exercise of their good faith judgment, by
the Lenders for any reason insufficient in whole or in part to carry out the
true intent and spirit hereof or thereof, it will execute or cause to be
executed such other and further assurances and documents as in the reasonable
opinion of the Lenders may be reasonably required in order more effectively to
accomplish the purposes of this Amendment.
 
11.           Counterparts.  This Amendment may be executed in any number of
counterparts.
 
12.           Headings; Amendment.  In this Amendment, section headings are
inserted for convenience of reference only and shall be ignored in the
interpretation of this Amendment.  This Amendment cannot be amended other than
by written agreement signed by the parties hereto.
 
13.           Marshall Islands Legal Opinion.  The Borrower shall deliver to the
Agent, not later than ten (10) Business Days following the Effective Date and
prior to the recording of any Second Mortgage, an opinion concerning the laws of
the Republic of the Marshall Islands, which opinion shall be addressed to the
Agent and each of the Lenders and shall be in form and substance reasonably
acceptable to the Agent.
 

 
[SIGNATURE PAGES TO FOLLOW]
 

 
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IN WITNESS WHEREOF, each of the parties hereto has executed this Amendment by
its duly authorized representative on the day and year first above written.
 
GENCO SHIPPING & TRADING LIMITED

By: /s/ John C.
Wobensmith                                                                                    
                                                                                     
Name:    John C. Wobensmith
Title:      Chief Financial Officer, Principal Accounting Officer and Secretary
 
 
GENCO BAY LIMITED

By: /s/ John C.
Wobensmith                                                                                                                                                                         
Name:     John C. Wobensmith
Title:       Chief Financial Officer, Chief Accounting Officer, Secretary and
Treasurer
 
 
GENCO OCEAN LIMITED

By: /s/ John C.
Wobensmith                                                                                                                                                                         
Name:     John C. Wobensmith
Title:       Chief Financial Officer, Chief Accounting Officer, Secretary and
Treasurer
 
 
GENCO AVRA LIMITED

By: /s/ John C.
Wobensmith                                                                                                                                                                         
Name:     John C. Wobensmith
Title:       Chief Financial Officer, Chief Accounting Officer, Secretary and
Treasurer
 
 
GENCO MARE LIMITED

By: /s/ John C.
Wobensmith                                                                                                                                                                          
Name:     John C. Wobensmith
Title:       Chief Financial Officer, Chief Accounting Officer, Secretary and
Treasurer
 
 
GENCO SPIRIT LIMITED

By: /s/ John C.
Wobensmith                                                                                                                                                                          
Name:     John C. Wobensmith
Title:       Chief Financial Officer, Chief Accounting Officer, Secretary and
Treasurer
 
 
 
Signature Page to Second Amendment
 
 
 
 

 
 
 

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CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, in its capacity as Agent
 

By: /s/ Craig
Stearns                                                                                    
Name: Craig Stearns
Title: Attorney-in-Fact
 
By: /s/ William
Haft                                                                                    
Name: William Haft
Title: Attorney-in-Fact
 
CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, in its capacity as Security
Trustee

By: /s/ Craig
Stearns                                                                                    
Name: Craig Stearns
Title: Attorney-in-Fact
 
By: /s/ William
Haft                                                                                   
Name: William Haft
Title: Attorney-in-Fact
 
CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as Consenting Lender

By:  /s/ Craig
Stearns                                                                                   
Name: Craig Stearns
Title: Attorney-In-Fact
 
By: /s/ William
Haft                                                                                    
Name: William Haft
Title: Attorney-in-Fact
 
CREDIT INDUSTRIEL ET COMMERCIAL, as Consenting Lender

By: /s/
Andrew McKuin                                                                                   
Name: Andrew McKuin
Title: Vice President
 
By:  /s/ Adrienne
Molloy                                                                                   
Name: Adrienne Molloy
Title: Vice President
 
SKANDINAVISKA ENSKILDA BANKEN AB (publ), as Consenting Lender

By: /s/ Lewis
Millberg                                                                                   
Name: Lewis Millberg 
Title:
 
By: /s/ Magnus
Arve                                                                                    
Name: Magnus Arve
Title:
 
 
Signature Page to Second Amendment