be
modified to reflect the nature of such entity.
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SECTION 6.19
RELATING TO THE VESSELS.
(A)
BORROWER SHALL MAINTAIN AND CAUSE EACH OF ITS SUBSIDIARIES TO
MAINTAIN, A CERTIFIED COPY OF EACH MORTGAGE, TOGETHER WITH A NOTICE THEREOF,
ABOARD EACH OF THE POOL VESSELS OWNED BY IT.
(B)
BORROWER SHALL MAINTAIN AND CAUSE EACH OF ITS SUBSIDIARIES TO
MAINTAIN THE POOL VESSELS (WHICH ARE REQUIRED TO BE CLASSED IN ORDER TO OPERATE
IN THE SERVICE IN WHICH THEY ARE OPERATING) IN THE HIGHEST CLASSIFICATION
REQUIRED TO BE MAINTAINED IN ORDER TO OPERATE IN SUCH SERVICE FOR VESSELS OF
LIKE AGE AND TYPE BY THE AMERICAN BUREAU OF SHIPPING OR ANY OTHER CLASSIFICATION
SOCIETY REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT.
(C)
BORROWER SHALL, AND SHALL CAUSE EACH SUBSIDIARY GUARANTOR TO,
PERMIT THE ADMINISTRATIVE AGENT TO HAVE THE POOL VESSELS SURVEYED BY MARINE
ENGINEERS OR OTHER SURVEYORS SELECTED BY THE ADMINISTRATIVE AGENT, IN ITS SOLE
DISCRETION, AT SUCH TIMES AND WITH SUCH FREQUENCY AS THE ADMINISTRATIVE AGENT
MAY REASONABLY REQUEST.
THE COSTS OF SUCH SURVEYS AND INSPECTIONS SHALL BE
ALLOCATED AS FOLLOWS: (I) SO LONG AS NO EVENT OF DEFAULT HAS OCCURRED AND IS
THEN CONTINUING, THE COST OF ONE SUCH SURVEY AND INSPECTION EVERY THREE YEARS
SHALL BE BORNE BY BORROWER, AND (II) WHENEVER AN EVENT OF DEFAULT EXISTS
HEREUNDER, THE COSTS OF ALL SURVEYS (INCLUDING, WITHOUT LIMITATION, VISUAL
SURVEYS) AND INSPECTIONS SHALL BE BORNE BY BORROWER.
SECTION 6.20
WORKING CAPITAL CLEAN-DOWN.
Borrower will cause Loans the proceeds of which were used for working capital
purposes (as identified in accordance with clause (vi) of Section 2.04 hereof)
and not for vessel acquisitions or expansion capacity, to be reduced to zero for
fifteen (15) consecutive days during each twelve (12) month period beginning
with the Effective Date.
SECTION 6.21
QUALIFIED EQUITY ISSUANCE.
K-Sea shall commence, within 15 days after the Effective Date, the Qualified
Equity Issuance.
SECTION 6.22
PHASE TWO TRANSACTION.
(A)
BORROWER SHALL CAUSE THE PHASE TWO TRANSACTIONS TO BE CONSUMMATED
ON OR BEFORE THE TENTH (10TH) DAY FOLLOWING THE EFFECTIVE DATE AND UPON SUCH
CONSUMMATION, THE ADMINISTRATIVE AGENT SHALL RECEIVE:
(I)
PROMPTLY AFTER BECOMING AVAILABLE FROM THE UNITED STATES COAST
GUARD NATIONAL VESSEL DOCUMENTATION CENTER IN FALLING WATERS, WEST VIRGINIA AND
IN ANY EVENT WITHIN TWO (2) BUSINESS DAYS THEREAFTER, WITH RESPECT TO EACH PHASE
TWO POOL VESSEL, IN FORM AND SUBSTANCE SATISFACTORY TO THE ADMINISTRATIVE AGENT,
AND IN SUFFICIENT COPIES, A TRUE AND COMPLETE COPY OF EITHER (1) A CERTIFICATE
OF OWNERSHIP AND ENCUMBRANCE ISSUED BY THE UNITED STATES COAST GUARD OR (2) AN
ABSTRACT OF TITLE ISSUED BY THE UNITED STATES COAST GUARD, IN EITHER CASE,
SHOWING (A) K-SEA LLC TO BE THE OWNER OF THE K-SEA LLC PHASE TWO POOL VESSELS,
(B) SMITH MARITIME TO BE THE OWNER OF THE SMITH MARITIME
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POOL VESSELS AND (C) K-SEA HAWAII TO BE THE OWNER OF THE K-SEA HAWAII PHASE TWO
POOL VESSELS, IN EACH CASE FREE AND CLEAR OF ALL LIENS OF RECORD EXCEPT (X)