Document:

Exhibit 10.12

 

F21.228

 

First Supplemental Agreement to Secured Loan Facility Agreement dated 30 August 2013

 

Dated:                    13 July 2015

 

(1)                                          BALTIC HARE LIMITED

BALTIC FOX LIMITED

(as Borrowers)

 

(2)                                          BALTIC TRADING LIMITED

(as Guarantor and Pledgor)

 

(3)                                          DVB BANK SE and others

(as Lenders)

 

(4)                                          DVB BANK SE

(as Agent)

 

(5)                                          DVB BANK SE

(as Security Agent)

 

 

 

Contents

 

	
 
    	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
1
    	
 
    	
Interpretation
    	
 
    	
3
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
2
    	
 
    	
Conditions
    	
 
    	
4
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
3
    	
 
    	
Representations and Warranties
    	
 
    	
7
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
4
    	
 
    	
Amendments to Loan Agreement and Release of the Guarantor
    	
 
    	
7
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
5
    	
 
    	
Confirmation and Undertaking
    	
 
    	
11
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
6
    	
 
    	
Counterparts
    	
 
    	
12
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
7
    	
 
    	
Notices, Law and Jurisdiction
    	
 
    	
12
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Schedule 1
    	
 
    	
The Lenders The Commitments
    	
 
    	
13
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Schedule 2
    	
 
    	
[First] [Second] Effective Date Confirmation
    	
 
    	
14
    

 

 

Supplemental Agreement

 

Dated:  13 July 2015

 

Between:

 

(1)                                          BALTIC HARE LIMITED (“Baltic Hare”) and BALTIC FOX LIMITED (“Baltic FOX”), each a company incorporated according to the law of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH 96960 (together the “Borrowers” and each a “Borrower”) jointly and severally; and

 

(2)                                          BALTIC TRADING LIMITED, a company incorporated according to the law of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH 96960 (the “Guarantor”); and

 

(3)                                          the banks listed in Schedule 1, each acting through its office at the address indicated against its name in Schedule 1 (together the “Lenders” and each a “Lender”); and

 

(4)                                          DVB BANK SE, acting as agent and arranger through its office at Platz der Republik 6, D-60325 Frankfurt am Main, Federal Republic of Germany (in that capacity the “Agent”); and

 

(5)                                          DVB BANK SE, acting as security agent through its office at Platz der Republik 6, D-60325 Frankfurt am Main, Federal Republic of Germany (in that capacity the “Security Agent”).

 

Supplemental to a secured loan agreement dated 30 August 2013 (the “Loan Agreement”) made between the Borrowers, the Lenders, the Agent and the Security Agent on the terms and subject to the conditions of which each of the Lenders agreed to advance to the Borrowers its respective Commitment of an aggregate amount not exceeding twenty two million Dollars ($22,000,000).

 

Whereas:

 

(A)                               The Guarantor and the Borrowers request the Finance parties to consent to an amendment to clauses 10.13 (Additional Security) and 12.2.2 (b) and (c) (Financial Covenants) of the Loan Agreement.

 

(B)                               Pursuant to a letter addressed to DVB Bank SE by the Guarantor and dated 23 June 2015 and in light of the proposed merger (the “Merger”) between the New Guarantor and the Guarantor (as a consequence of which the Guarantor will no longer be listed on the New York Stock Exchange (or any other exchange)), the Guarantor and the Borrowers further request the Finance parties to consent to:

 

(1)                                the Merger pursuant to clause 12.3.6 of the Loan Agreement;

 

(2)                                  the replacement of the Guarantor by the New Guarantor;

 

(3)                                   the release and discharge of the Guarantor from its obligations under the Guarantee; and

 

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(4)                                   the Change of Control of the Guarantor (as required pursuant to clause 12.3.21 (a) and (b) (No change in ownership) and clause 13.1.8 (Event of Default) of the Loan Agreement).

 

(C)                             The Finance Parties are willing to agree to such requests contained in Recital (A) and (B) and the Finance Parties and the Borrowers have agreed to amend the Loan Agreement and the Security Documents (as applicable) on the terms and subject to the conditions contained in this Supplemental Agreement pursuant to which the Borrowers would agree to procure the execution of and delivery to the Security Agent of the Additional Security Documents.

 

(D)                               At the date of this Supplemental Agreement, the outstanding amount of the Loan is nineteen million three hundred and seventy five thousand Dollars ($19,375,000).

 

It is agreed that:

 

1                                                  Interpretation

 

1.1                                        In this Supplemental Agreement:

 

“Additional Security Documents” means this Supplemental Agreement, the New Guarantee and any other agreement or document which may at any time be executed by any person as additional security for the payment of all or any part of the Indebtedness.

 

“Finance Parties” means the Agent, the Security Agent and the Lenders.

 

“First Effective Date” means the date on which the Agent confirms to the Borrowers in writing substantially in the form set out in Schedule 2 that all of the conditions referred to in Clause 2.1 have been satisfied, which confirmation the Agent shall be under no obligation to give if an Event of Default shall have occurred.

 

“New Guarantee” means the guarantee and indemnity to be granted by the New Guarantor in favour of the Security Agent, in such form and containing such terms and conditions as the Security Agent shall require.

 

“New Guarantor” means Genco Shipping & Trading Limited a corporation incorporated under the laws of the Republic of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 and whose principal place of business is at 299 Park Avenue, 12th Floor, New York NY 10171 and/or (where the context permits) any other person who shall at any time during the Facility Period give to the Lenders or to the Security Agent on their behalf a guarantee and/or indemnity for the repayment of all or part of the Indebtedness.

 

“Second Effective Date” means the date on which the Agent confirms to the Borrowers in writing substantially in the form set out in Schedule 2 that all of the conditions referred to in Clause 2.2 have been satisfied, which confirmation the Agent shall be under no obligation to give if an Event of Default shall have occurred.

 

“Security Parties” means all parties to this Supplemental Agreement other than the Finance Parties and “Security Party” means any one of them.

 

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“Supplemental Agreement” means the agreement herein contained.

 

1.2                                        All words and expressions defined in the Loan Agreement shall have the same meaning when used in this Supplemental Agreement unless the context otherwise requires, and clause 1.2 of the Loan Agreement shall apply to the interpretation of this Supplemental Agreement as if it were set out in full.

 

1.3                                        The Agent and the Borrowers hereby designate this Supplemental Agreement as a Finance Document.

 

1.4                                        All obligations, representations, warranties, covenants and undertakings of the Borrowers under or pursuant to this Supplemental Agreement shall, unless otherwise expressly provided, be entered into, made or given by them jointly and severally.

 

2                                                  Conditions

 

2.1                                        The Agent, on behalf of the Finance Parties, confirms its consent to the requests specified in Recital A above provided that as conditions for the agreement of the Finance Parties to such requests and for the effectiveness of Clauses 4.1 and 4.2, the Borrowers shall deliver or cause to be delivered to or to the order of the Agent the following documents and evidence:

 

2.1.1                              a certificate from a duly authorised officer of each Borrower (a) (i) confirming that none of the documents delivered to the Agent pursuant to (as applicable) schedule 2, part I, paragraphs 1(a), 1(c), 1 (e)(f) and 1(h) of the Loan Agreement have been amended or modified in any way since the date of their delivery to the Agent, or (ii) attaching copies, certified by a duly authorised officer of the relevant Borrower as true, complete, accurate and neither amended nor revoked, of any documents delivered to the Agent pursuant to schedule 1, paragraph 1(a) of the Loan Agreement which have been amended or modified and (b) setting out the names of the directors, officers and, in relation to each Borrower, shareholders (after giving effect to the Transfer) and the proportion of shares held by each shareholder;

 

2.1.2                              a certificate from a duly authorised officer of the Guarantor (a) (i) confirming that none of its constitutional documents delivered to the Agent pursuant to the Guarantor’s officer’s certificate dated 26 February 2014 duly executed by the Guarantor’s President, Chief Financial Officer, Principal Accounting Officer, Secretary and Treasurer have been amended or modified in any way since the date of their delivery to the Agent, or (ii) attaching copies, certified by a duly authorised officer of the Guarantor as true, complete, accurate and neither amended nor revoked, of any documents delivered to the Agent as per above, which have been amended or modified (b) certifying that each copy document relating to it specified in Clauses 2.1.3 and 2.1.4 (if applicable) is correct and (c) setting out the names of the directors and officers;

 

2.1.3                              a copy, certified by the secretary of the Guarantor as true, complete and accurate and neither amended nor revoked, of a resolution of its directors (together, where appropriate, with signed waivers of notice of any directors’ meetings) approving, and authorising or ratifying the execution of, this 

 

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Supplemental Agreement and any document to be executed by the Guarantor pursuant to this Supplemental Agreement;

 

2.1.4                              if necessary a notarially attested and legalised power of attorney of the Guarantor under which this Supplemental Agreement and any documents required pursuant to this Supplemental Agreement are to be executed by the Guarantor;

 

2.1.5                              a certificate of good standing in respect of each Borrower and the Guarantor;

 

2.1.6                              a specimen of the signature and a copy of the passport of each person who executes this Supplemental Agreement and any other documents required by it;

 

2.1.7                              this Supplemental Agreement, together with all other documents required by it;

 

2.1.8                              a legal opinion of the legal advisers to the Agent in each relevant jurisdiction, substantially in the form or forms provided to the Agent prior to signing of this Supplemental Agreement or confirmation satisfactory to the Agent that such an opinion will be given;

 

2.1.9                              evidence that WFW Legal Services Limited present of 15 Appold Street, London EC2A 2HB, England have accepted their appointment as agent for service of process in relation to any proceedings before the English courts in connection with this Supplemental Agreement and any other documents required by it; and

 

2.1.10                       a copy of any other consent, licence, approval, authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable in connection with the entry into and performance of the transactions contemplated by this Supplemental Agreement or for the validity and enforceability of this Supplemental Agreement.

 

2.2                                        The Agent, on behalf of the Finance Parties, confirms its consent to the requests specified in Recital B above provided that as conditions for the agreement of the Finance Parties to such requests and for the effectiveness of Clause 4.3, the Borrowers shall deliver or cause to be delivered to or to the order of the Agent, in addition to all documents required pursuant to clause 2.1, the following documents and evidence:

 

2.2.1                              a certificate from a duly authorised officer of the New Guarantor (a) attaching copies of the constitutional documents of the New Guarantor together with such other evidence as the Agent may reasonably require that the New Guarantor is duly incorporated in its country of incorporation and remains in existence with power to enter into, and perform its obligations under, the Additional Security Documents to which it is to become a party, (b) certifying that each copy document relating to it specified in Clauses 2.2.2 and 2.2.3 (if applicable) is correct, complete and in full force and (c) setting out the names of the directors and officers of the New Guarantor;

 

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2.2.2                              a copy, certified by the secretary or a director of the New Guarantor as true, complete and accurate and neither amended nor revoked, of a resolution of its directors (together, where appropriate, with signed waivers of notice of any directors’ meetings) approving, and authorising or ratifying the execution of, the Additional Security Documents and any document to be executed by the New Guarantor pursuant to the Additional Security Documents;

 

2.2.3                              if necessary a notarially attested and legalised power of attorney of the New Guarantor under which the Additional Security Documents and any documents required pursuant to the Additional Security Documents are to be executed by the New Guarantor;

 

2.2.4                              a certificate of good standing in respect of the New Guarantor;

 

2.2.5                              a specimen of the signature and a copy of the passport of each person who executes the remaining Additional Security Documents;

 

2.2.6                              the remaining Additional Security Documents, together with all other documents required by any of them;

 

2.2.7                              a legal opinion of the legal advisers to the Agent in each relevant jurisdiction, substantially in the form or forms provided to the Agent prior to signing of this Supplemental Agreement or confirmation satisfactory to the Agent that such an opinion will be given;

 

2.2.8                              evidence that WFW Legal Services Limited present of 15 Appold Street, London EC2A 2HB, England have accepted their appointment as agent for service of process in relation to any proceedings before the English courts in connection with the remaining Additional Security Documents;

 

2.2.9                              such documentation and other evidence as is reasonably requested by the Agent in order for the Lenders to comply with all necessary “know your customer” or similar identification procedures in relation to the transactions contemplated in the Finance Documents;

 

2.2.10                       a certified true copy of the Registration Rights Agreement (as defined in the New Guarantee); and

 

2.2.11                       a copy of any other consent, licence, approval, authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable in connection with the entry into and performance of the transactions contemplated by any of the remaining Additional Security Documents or for the validity and enforceability of the remaining Additional Security Documents.

 

2.3                                        The Borrowers undertake to deliver or to cause to be delivered to the Agent on, or as soon as practicable after, the First Effective Date or the Second Effective date (as applicable), the following additional documents and evidence:-

 

2.2.1                             the legal opinions referred to in Clauses 2.1.8 and 2.2.7, duly executed; and

 

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2.2.2                             the process agent acceptance letter referred to in Clauses 2.1.9 and 2.2.8 duly executed.

 

2.4                                        If any of the documents and evidence required by Clauses 2.1 and 2.2 have not been delivered to or to the order of the Agent in accordance therewith, the Borrowers undertake to deliver all outstanding documents and evidence to or to the order of the  Agent no later than the date specified by the Agent, and delivery on such later date shall not be taken as a waiver of the Agent’s right to require production of all the documents and evidence required by Clauses 2.1 and 2.2.

 

2.5                                        All documents and evidence delivered to the Agent pursuant to this Clause shall:

 

2.5.1                              be in form and substance acceptable to the Agent;

 

2.5.2                              be accompanied, if required by the Agent, by translations into the English language, certified in a manner acceptable to the Agent; and

 

2.5.3                              if required by the Agent, be certified, notarised, legalised or attested in a manner acceptable to the Agent.

 

3                                                  Representations and Warranties

 

Each of the representations and warranties contained in clause 11 of the Loan Agreement shall be deemed repeated by each Borrower at the date of this Supplemental Agreement and at the Effective Date, by reference to the facts and circumstances then pertaining, as if references to the Finance Documents included this Supplemental Agreement.

 

4                                                  Amendments to Loan Agreement and Release of the Guarantor

 

4.1                                        With effect from the First Effective Date:

 

4.1.1                              the definition of “Supplemental Agreement” contained in Clause 1.1 of this Supplemental Agreement shall be added to clause 1.1 of the Loan Agreement in alphabetical order;

 

4.1.2                              the definition of “Leverage” set forth in clause 1.1 of the Loan Agreement shall be deleted and be replaced as follows:

 

““Leverage” means the aggregate Financial Indebtedness (excluding committed but undrawn working capital lines) of the Group divided by the Value Adjusted Total Assets.”;

 

4.1.3                              the definition of “Minimum Consolidated Net Worth” set forth in clause 1.1 of the Loan Agreement shall be deleted and be replaced as follows:

 

““Minimum Consolidated Net Worth” means an amount of not less than (a) $270,150,000 plus (b) fifty per cent (50%) of the value of any subsequent primary equity offerings of the Guarantor after the Supplemental Agreement.”

 

4.1.4                              the definition of “Security Documents” set forth in clause 1.1 and clause 10.1 of the Loan Agreement shall be construed to include this Supplemental Agreement; and

 

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4.1.5                              clause 10.13.2 of the Loan Agreement shall be amended by adding at the end “it being agreed that security over Fleet Vessels shall, in the Security Agent’s discretion acting reasonably, be acceptable additional security”.

 

4.2                                        With effect from the First Effective Date and until and including 30 June 2016:

 

reference to “one hundred and thirty per cent (130%)” in Clause 10.13 (Additional Security) of the Loan Agreement shall be construed to refer to “one hundred and ten per cent (110%)”.

 

4.3                                        With effect from the Second Effective Date:

 

4.3.1                              The remaining definitions contained in Clause 1.1 (other than the definition of “Finance Parties”, “First Effective Date”, “Second Effective Date”  and “Security Parties”) of this Supplemental Agreement shall be added to clause 1.1 of the Loan Agreement in alphabetical order;

 

4.3.2                              the definition of “Change of Control” set forth in clause 1.1 of the Loan Agreement shall be deleted and be replaced as follows:

 

““Change of Control” means:

 

(A)                                        in respect of the New Guarantor, any time during which and for any reason:

 

(a)                                          there is a sale, lease or transfer of all or substantially all of the New Guarantor’s assets to any Person or group (as such term is used in Section 13(d)(3) of the Exchange Act); or

 

(b)                                           there is a liquidation or dissolution of the New Guarantor; or

 

(c)                                           there is a replacement of a majority of the directors on the board of directors of the New Guarantor over a two-year period from the directors who constituted the board of directors of the New Guarantor at the beginning of such period and such replacement has not been approved by a vote of at least a majority of the board of directors of the New Guarantor then still in office who either were members of such board of directors at the beginning of such period or whose election as a member of such board of directors was previously so approved; or

 

(d)                                          there is a “change of control” or similar event (however described) in any documentation related to any Financial Indebtedness of the New Guarantor or the Group or any member of the Group; or

 

(e)                                           any person or group other than one or more of the Permitted Holders that at any time becomes the owner, directly or indirectly, beneficially or of record, of shares representing more than thirty per cent of the outstanding 

 

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voting or economic equity interests of the New Guarantor; and

 

(B)                                        in respect of a Borrower, any time during which and for any reason, the New Guarantor fails to own, directly or indirectly, one hundred per cent of the capital stock or other equity interests of that Borrower.”;

 

4.3.3                              the definition of “Guarantor” set forth in clause 1.1 of the Loan Agreement shall be deleted and be replaced by the definition of “New Guarantor”  contained in Clause 1.1 of this Supplemental Agreement in alphabetical order and any references to the Guarantor in the Loan Agreement shall no longer be a reference to Baltic Trading Limited, of the Republic of the Marshall Islands,  but shall be construed to refer to the New Guarantor;

 

4.3.4                              the definition of “Minimum Consolidated Net Worth” set forth in clause 1.1 of the Loan Agreement (as amended pursuant to Clause 4.1.3 of this Supplemental Agreement) shall be deleted and be replaced as follows:

 

““Minimum Consolidated Net Worth” means an amount of not less than (a) $786,360,204 plus (b) fifty per cent (50%) of the value of any subsequent primary equity offerings of the Guarantor including the offering completed on 31 March 2015.”

 

4.3.5                              the definition of “Nordea Loan Agreement” set forth in clause 1.1 of the Loan Agreement shall be deleted;

 

4.3.6                              the definition of “Permitted Holders” set forth in clause 1.1 of the Loan Agreement shall be deleted and be replaced as follows:

 

““Permitted Holders” means (a) Mr. Peter Georgiopoulos (including his immediate family members and trusts to which he or such family members hold a beneficial interest, (b) any corporation or any other entity directly or indirectly controlled by Mr. Peter Georgiopoulos and (c) any person or group (as defined in Section 13(a)(3) of the Exchange Act) who may at the time of the signing of the Supplemental Agreement own, directly or indirectly, beneficially or of record, shares representing more than thirty per cent of the voting or economic equity interests of the New Guarantor, any affiliate of any such person, and any member of such group or affiliate of such member.”;

 

4.3.7                              the definition of “Security Documents” set forth in clause 1.1 and clause 10.1 of the Loan Agreement shall be construed to include the remaining Additional Security Documents and exclude the Guarantee and the Guarantor’s Assignments, in each case executed by Baltic Trading Limited, of the Republic of the Marshall Islands;

 

4.3.8                              the definition of “Security Parties” set forth in clause 1.1 of the Loan Agreement shall be construed to include the New Guarantor and exclude the Guarantor;

 

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4.3.9                              all references in the Loan Agreement (but not in this Supplemental Agreement) to the Guarantee shall be construed to refer to the New Guarantee;

 

4.3.10                       the definition of “Shareholder Rights Agreement” set forth in clause 1.1 of the Loan Agreement shall be deleted and be replaced as follows:

 

““Shareholder Rights Agreement” means a shareholder rights agreement substantially similar to the shareholder rights agreement entered into as of 11 April 2007 and made between the New Guarantor and Mellon Investor Services LLC, a New Jersey Limited Liability Company as rights agent.”;

 

4.3.11                       the definition of “Subsidiary” set forth in clause 1.1 of the Loan Agreement shall be deleted and be replaced as follows:

 

““Subsidiary” means, as to any Person, (i) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person and/or one or more Subsidiaries of such Person and (ii) any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Subsidiaries of such Person has more than a 50% equity interest at the time.”;

 

4.3.12                       clause 10.14 (b) set forth in the Loan Agreement shall be deleted and be replaced as follows:

 

“(b)                                    “Fleet Vessels”.  The fair market value of a Fleet Vessel (other than a Vessel) shall be determined pursuant to any required methodology pursuant to any contractual obligation addressing the manner in which such Fleet Vessel is to be appraised or valued (or if there is no such other required methodology, in a manner mutually acceptable to the Borrowers and the Agent).”; and

 

4.3.13                       without prejudice to the obligations of the Borrowers under the Loan Agreement or to the obligations of the other Security Parties (as defined in the Loan Agreement) under, or to the validity of, any documents (other than the Guarantee and the Guarantor’s Assignments) which the Security Parties (as defined in the Loan Agreement) may have executed in favour of the Security Agent pursuant to the Loan Agreement all of which shall remain in full force and effect, the Finance Parties hereby:

 

i)                                                  release and discharge the Guarantor from all its obligations under the Guarantee and the Guarantor’s Assignments with the exception of any indemnities contained in the Guarantee or the Guarantor’s Assignments which are intended to survive; and

 

ii)                                               release to the Guarantor all its rights, title and interest in and to all the property charged in favour of the Security Agent under the Guarantee and the Guarantor’s Assignments.

 

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The Finance Parties make and give no representation, warranty or covenant in relation to the property released under and pursuant to this Clause 4.1.14 except that it has not itself charged that property.

 

All other terms and conditions of the Loan Agreement shall remain unaltered and in full force and effect.

 

5                                                  Confirmation and Undertaking

 

5.1                                        Each of the Borrowers confirms that all of its respective obligations under or pursuant to each of the Security Documents (as defined giving effect to this Supplemental  Agreement) to which it is a party remain in full force and effect, despite the amendments to the Loan Agreement made in this Supplemental Agreement, as if all references in any of the Security Documents (as defined giving effect to this Supplemental Agreement) to the Loan Agreement were references to the Loan Agreement as amended and supplemented by this Supplemental Agreement.

 

5.2                                        The definition of any term defined in any of the Security Documents shall, to the extent necessary, be modified to reflect the amendments to the Loan Agreement made in or pursuant to this Supplemental Agreement.

 

5.3                                        Provided the Second Effective Date has occurred and there is no Default, the Finance Parties hereby confirm their consent to the cancellation of the global management agreement dated 15 March 2010 and made between the Guarantor and the New Guarantor (as amended from time to time) provided such cancellation does not in any way affect the security granted in favour of the Security Agent under the Loan Agreement (as amended and supplemented from time to time).

 

5.4                                        The Security Agent shall release each Existing Share Charge upon request by each Borrower provided that:

 

(a)                                         the Guarantor transfers all the Shares to the New Shareholder on terms approved by the Security Agent;

 

(b)                                         the New Shareholder creates security over the Shares in favour of the Security Agent in form and substance satisfactory to the Security Agent;

 

(c)                                          the Security Agent receives such legal advice, opinions and other documents as it may require in relation to the creation of the security by the New Shareholder in form and substance satisfactory to it;

 

(d)                                          there is no Default;

 

(f)                                           such release of the Existing Share Charges and creation of security over the Shares is documented pursuant to a supplemental agreement to the Loan Agreement and subject to other terms and conditions acceptable to the Finance Parties; and

 

(f)                                           the New Guarantor reimburses the Security Agent in respect of all fees, costs and expenses incurred by the Security Agent and the Agent in relation to the matters referred to in the preceding paragraphs.

 

For the purposes of this Clause 5.4:

 

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“New Shareholder” means the New Guarantor and any wholly-owned subsidiary of the New Guarantor incorporated in the Republic of the Marshall Islands or other jurisdiction approved by the Security Agent;

 

“Existing Share Charges” means the deeds of charge over shares in Baltic Hare and Baltic Fox respectively and each dated 5 September 2013 and executed by the Guarantor in favour of the Security Agent and “Existing Share Charge” means either one of them; and

 

“Shares” means all the issued share capital in each of the Borrowers.

 

6                                                  Counterparts

 

This Supplemental Agreement may be executed in any number of counterparts each of which shall be original but which shall together constitute the same instrument.

 

7                                                  Notices, Law and Jurisdiction

 

The provisions of clauses 18 and 23 of the Loan Agreement shall apply to this Supplemental Agreement as if they were set out in full and as if references to the Loan Agreement were references to this Supplemental Agreement and references to the Borrower were references to the Security Parties.

 

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Schedule 1
    	
 
    
	
 
    	
 
    
	
The Lenders
    	
The Commitments
    
	
 
    	
 
    
	
DVB BANK SE
    	
$22,000,000
    

 

Platz der Republik 6

 

D-60325 Frankfurt am Main

 

Federal Republic of Germany

 

fax no: +44 207 256 4352 marked for the attention of Transaction and Loan Services

 

for the purposes of Clause 18 (Notices) of the Loan Agreement with a copy to

 

DVB BANK SE

 

3 Moraitini Street & 1 Palea Leof. Posidonos

 

Delta Paleo Faliro

 

175 61  Athens, Greece

 

Fax: +30 210 455 7420

 

Email: dbg@dvbbank.com

 

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Schedule 2

 

[First] [Second] Effective Date Confirmation

 

To:                                      BALTIC HARE LIMITED & BALTIC FOX LIMITED, each of

Trust Company Complex

Ajeltake Road

Ajeltake Island

Majuro

Marshall Islands

MH 96960

 

We, DVB BANK SE, refer to the supplemental agreement dated [     ] 2015 (the “Supplemental Agreement”) relating to a secured loan agreement dated 30 August 2013 (the “Loan Agreement”) made between you as the Borrowers, the banks listed in it as the Lenders, ourselves as the Agent and ourselves as the Security Agent in respect of a loan to you from the Lenders of up to $22,000,000.

 

We hereby confirm that all conditions precedent referred to in Clause [2.1] [2.2] of the Supplemental Agreement have been satisfied.  In accordance with Clauses 1.1 and 4 of the Supplemental Agreement the [First] [Second] Effective Date is the date of this confirmation and the amendments to the Loan Agreement are now effective.

 

Dated: [              ] 2015

 

 

	
Signed:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
for and on behalf of
    
	
 
    	
DVB BANK SE
    

 

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In witness of which the parties to this Supplemental Agreement have executed this Supplemental Agreement as a deed the day and year first before written.

 

	
Signed and delivered as
    	
 
    	
)
    
	
a Deed by
    	
 
    	
)
    
	
BALTIC HARE LIMITED
    	
 
    	
) 
    	
/s/ John C. Wobensmith
    
	
acting by John C. Wobensmith
    	
 
    	
)
    	
 
    
	
its duly authorised attorney-in-fact
    	
 
    	
)
    	
 
    
	
in the presence of:
    	
 
    	
)
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Witness signature: 
    	
/s/ Nathan C. Gaudio
    	
 
    	
 
    	
 
    
	
Name: Nathan C. Gaudio
    	
 
    	
 
    	
 
    
	
Address: 46 Trinity Place
    	
 
    	
 
    	
 
    
	
New York, NY 10006
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Signed and delivered as
    	
 
    	
)
    	
 
    
	
a Deed by
    	
 
    	
)
    	
 
    
	
BALTIC FOX LIMITED
    	
 
    	
) 
    	
/s/ John C. Wobensmith
    
	
acting by John C. Wobensmith
    	
 
    	
)
    	
 
    
	
its duly authorised attorney-in-fact
    	
 
    	
)
    	
 
    
	
in the presence of:
    	
 
    	
)
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Witness signature: 
    	
/s/ Nathan C. Gaudio
    	
 
    	
 
    	
 
    
	
Name: Nathan C. Gaudio
    	
 
    	
 
    	
 
    
	
Address: 46 Trinity Place
    	
 
    	
 
    	
 
    
	
New York, NY 10006
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Signed and delivered as
    	
 
    	
)
    	
 
    
	
a Deed by
    	
 
    	
)
    	
 
    
	
BALTIC TRADING LIMITED
    	
 
    	
) 
    	
/s/ John C. Wobensmith
    
	
acting by John C. Wobensmith
    	
 
    	
)
    	
 
    
	
its duly authorised attorney-in-fact
    	
 
    	
)
    	
 
    
	
in the presence of:
    	
 
    	
)
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Witness signature: 
    	
/s/ Nathan C. Gaudio
    	
 
    	
 
    	
 
    
	
Name: Nathan C. Gaudio
    	
 
    	
 
    	
 
    
	
Address: 46 Trinity Place
    	
 
    	
 
    	
 
    
	
New York, NY 10006
    	
 
    	
 
    	
 
    

 

15

 

	
Signed and delivered as
    	
 
    	
)
    	
 
    
	
a Deed by
    	
 
    	
)
    	
 
    
	
DVB BANK SE (as a Lender)
    	
 
    	
) 
    	
/s/ Pinelopi Karamadouki
    
	
acting by Pinelopi Karamadouki
    	
 
    	
)
    	
 
    
	
its duly authorised attorney-in-fact
    	
 
    	
)
    	
 
    
	
in the presence of: Georgia Patinioti
    	
 
    	
)
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Witness signature: 
    	
/s/ Georgia Patinioti
    	
 
    	
 
    	
 
    
	
Name: Georgia Patinioti
    	
 
    	
 
    	
 
    
	
Address: 1st and 2nd Floor
    	
 
    	
 
    	
 
    
	
Filellinon 2 & Akti Miaouli
    	
 
    	
 
    	
 
    
	
185 36 Piraeus
    	
 
    	
 
    	
 
    
	
Greece
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Signed and delivered as
    	
 
    	
)
    	
 
    
	
a Deed by
    	
 
    	
)
    	
 
    
	
DVB BANK SE (as Agent)
    	
 
    	
) 
    	
/s/ Pinelopi Karamadouki
    
	
acting by Pinelopi Karamadouki
    	
 
    	
)
    	
 
    
	
its duly authorised attorney-in-fact
    	
 
    	
)
    	
 
    
	
in the presence of: Georgia Patinioti
    	
 
    	
)
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Witness signature: 
    	
/s/ Georgia Patinioti
    	
 
    	
 
    	
 
    
	
Name: Georgia Patinioti
    	
 
    	
 
    	
 
    
	
Address: 1st and 2nd Floor
    	
 
    	
 
    	
 
    
	
Filellinon 2 & Akti Miaouli
    	
 
    	
 
    	
 
    
	
185 36 Piraeus
    	
 
    	
 
    	
 
    
	
Greece
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Signed and delivered as
    	
 
    	
)
    	
 
    
	
a Deed by
    	
 
    	
)
    	
 
    
	
DVB BANK SE (as Security   Agent)
    	
 
    	
)
    	
 
    
	
acting by Pinelopi Karamadouki
    	
 
    	
) 
    	
/s/ Pinelopi Karamadouki
    
	
its duly authorised attorney-in-fact
    	
 
    	
)
    	
 
    
	
in the presence of: Georgia Patinioti
    	
 
    	
)
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Witness signature: 
    	
/s/ Georgia Patinioti
    	
 
    	
 
    	
 
    
	
Name: Georgia Patinioti
    	
 
    	
 
    	
 
    
	
Address: 1st and 2nd Floor
    	
 
    	
 
    	
 
    
	
Filellinon 2 & Akti Miaouli
    	
 
    	
 
    	
 
    
	
185 36 Piraeus
    	
 
    	
 
    	
 
    
	
Greece
    	
 
    	
 
    	
 
    

 

16Exhibit 10.13

 

F21.228

 

DATED 17 July 2015

 

GENCO SHIPPING & TRADING LIMITED

 

- to -

 

DVB BANK SE

 

 

GUARANTEE AND INDEMNITY

 

 

 

 

 

CONTENTS

 

	
 
    	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
1
    	
 
    	
Definitions and Interpretation
    	
 
    	
2
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
2
    	
 
    	
Representations and Warranties
    	
 
    	
4
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
3
    	
 
    	
Guarantee and Indemnity
    	
 
    	
6
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
4
    	
 
    	
Preservation of Guarantor’s Liability
    	
 
    	
6
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
5
    	
 
    	
Preservation of Finance   Parties’ Rights
    	
 
    	
8
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
6
    	
 
    	
Undertakings
    	
 
    	
10
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
7
    	
 
    	
Payments
    	
 
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
8
    	
 
    	
Currency
    	
 
    	
16
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
9
    	
 
    	
Set-Off
    	
 
    	
17
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
10
    	
 
    	
Application of Moneys
    	
 
    	
17
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
11
    	
 
    	
Partial Invalidity
    	
 
    	
18
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
12
    	
 
    	
Further Assurance
    	
 
    	
18
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
13
    	
 
    	
Miscellaneous
    	
 
    	
19
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
14
    	
 
    	
Notices
    	
 
    	
19
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
15
    	
 
    	
Law and Jurisdiction
    	
 
    	
19
    

 

 

GUARANTEE AND INDEMNITY

 

Dated:    17 July 2015

 

BY:

 

(1)                                 GENCO SHIPPING & TRADING LIMITED, a company incorporated according to the law of the Marshall Islands whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH 96960 and whose principal place of business is at 299 Park Avenue, 12th Floor, New York NY 10171 (the “Guarantor”)

 

IN FAVOUR OF:

 

(2)                                 DVB BANK SE acting through its office at Platz der Republik 6, D-60325 Frankfurt am Main, Federal Republic of Germany (the “Security Agent”).

 

WHEREAS:

 

(A)                               Each of the banks listed in schedule 1 to the Loan Agreement (as defined below) (collectively the “Lenders”) has agreed to lend to Baltic Hare Limited and Baltic Fox Limited, each of the Republic of the Marshall Islands, on a joint and several basis (the “Borrowers”) its participation in a loan not exceeding twenty two million Dollars ($22,000,000) (the “Loan”) on the terms and subject to the conditions set out in a loan agreement dated 30 August 2013 as amended and supplemented by a first supplemental agreement dated                 July 2015, each made between (amongst others) the Borrowers (as joint and several borrowers), the Lenders (as lenders), DVB BANK SE (as agent and arranger) (the “Agent”) and the Security Agent (as security agent) (together, the “Loan Agreement”).

 

(B)                               Pursuant to the Loan Agreement, and as a condition precedent to the several obligations of the Lenders to continue to make the Loan available to the Borrowers, the Borrowers have, amongst other things, agreed to procure that the Guarantor execute and deliver this Guarantee and Indemnity in favour of the Security Agent as security agent for the Finance Parties.

 

 

THIS DEED WITNESSES as follows:

 

1                                         Definitions and Interpretation

 

1.1                               In this Guarantee and Indemnity:

 

“Collateral” shall mean all property (whether real or personal) with respect to which any Encumbrance has been granted (or purported to be granted) pursuant to any Security Document.

 

“Default Rate” means interest at the rate calculated in accordance with clause 7.8 of the Loan Agreement.

 

“Dividend” with respect to any Person shall mean that such Person has declared or paid a dividend or returned any equity capital to its stockholders, partners or members or authorised or made any other distribution, payment or delivery of property (other than common stock or the right to purchase any of such stock of such Person) or cash to its stockholders, partners or members as such, or redeemed, retired, purchased or otherwise acquired, directly or indirectly, for a consideration any shares of any class of its capital stock or partnership or membership interests outstanding on or after the date of the Loan Agreement (or any options or warrants issued by such Person with respect to its capital stock), or set aside any funds for any of the foregoing purposes, or shall have permitted any of its Subsidiaries to purchase or otherwise acquire for a consideration any shares of any class of the capital stock of, or equity interests in, such Person outstanding on or after the date of the Loan Agreement (or any options or warrants issued by such Person with respect to is capital stock or other equity interests).  Without limiting the foregoing, “Dividends” with respect to any Person shall also include all payments made or required to be made by such Person with respect to any stock appreciation rights, plans, equity incentive or achievement plans or any similar plans or setting side of any funds for the foregoing purposes.

 

“Equity Interests” means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any preferred stock, any limited or general partnership interest and any limited liability company membership interest.

 

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“GAAP” means generally accepted accounting principles in the United States of America.

 

“Guarantor’s Liabilities” means all of the liabilities and obligations of the Guarantor to any of the Finance Parties under or pursuant to this Guarantee and Indemnity, from time to time, whether in respect of principal, interest, costs or otherwise and whether present, future, actual or contingent.

 

“Indebtedness” means the aggregate from time to time of: the amount of the Loan outstanding; all accrued and unpaid interest on the Loan; and all other sums of any nature (together with all accrued and unpaid interest on any of those sums) payable by the Borrowers or any of them to any of the Finance Parties under all or any of the Finance Documents.

 

“Original Financial Statements” means the audited consolidated financial statements of the Guarantor for the financial year ended 31 December 2014.

 

“Quarter Date” means each of 31 March, 30 June, 30 September and 31 December of each calendar year.

 

“Registration Rights Agreement” shall mean the Registration Rights Agreement as of 9 July 2014 by and between the Guarantor and the holders named therein.

 

1.2                               Unless otherwise specified in this Guarantee and Indemnity, or unless the context otherwise requires, all words and expressions defined in the Loan Agreement shall have the same meaning when used in this Guarantee and Indemnity.

 

1.3                               In this Guarantee and Indemnity:

 

1.3.1                     words denoting the plural number include the singular and vice versa;

 

1.3.2                     words denoting persons include corporations, partnerships, associations of persons (whether incorporated or not) or governmental or quasi-governmental bodies or authorities and vice versa;

 

1.3.3                     references to Clauses are references to clauses of this Guarantee and Indemnity;

 

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1.3.4                     references to this Guarantee and Indemnity include the recitals to this Guarantee and Indemnity;

 

1.3.5                     the headings and contents page(s) are for the purpose of reference only, have no legal or other significance, and shall be ignored in the interpretation of this Guarantee and Indemnity;

 

1.3.6                     references to any document (including, without limitation, to any of the Finance Documents) are, unless the context otherwise requires, references to that document as amended, supplemented, novated or replaced from time to time;

 

1.3.7                     references to statutes or provisions of statutes are references to those statutes, or those provisions, as from time to time amended, replaced or re-enacted; and

 

1.3.8                     references to any Finance Party include its successors, transferees and assignees.

 

2                                         Representations and Warranties

 

The Guarantor represents and warrants to the Security Agent at the date of this Guarantee and Indemnity and (by reference to the facts and circumstances then pertaining) on the date of the first day of each Interest Period that:

 

2.1                               all representations and warranties given by the Borrowers in the Loan Agreement in respect of the Guarantor and/or this Guarantee and Indemnity are and will remain correct and none of them is or will become misleading; and

 

2.2                               the Guarantor is a corporation, duly incorporated and validly existing under the law of its jurisdiction of incorporation and has the power to own its assets and to carry on its business as it is being conducted; and

 

2.3                               the Guarantor has the power to enter into and perform this Guarantee and Indemnity and has taken all necessary action to authorise its entry into and performance of this Guarantee and Indemnity; and

 

2.4                               the Guarantor is not insolvent or in liquidation or administration or subject to any other formal or informal insolvency procedure, and no receiver, administrative 

 

4

 

receiver, administrator, liquidator, trustee or analogous officer has been appointed in respect of the Guarantor or all or any part of its assets; and

 

2.5                               this Guarantee and Indemnity constitutes legal, valid, binding and enforceable obligations of the Guarantor; and

 

2.6                               all consents, licences, approvals and authorisations of, or registrations with or declarations to, any governmental authority, bureau or agency which may be required in connection with the entry into, performance, validity or enforceability of this Guarantee and Indemnity have been obtained or made and remain in full force and effect and the Guarantor is not aware of any event or circumstance which could reasonably be expected adversely to affect the right of the Guarantor to hold and/or obtain renewal of any such consents, licences, approvals or authorisations; and

 

2.7                               no litigation, arbitration or administrative proceeding of or before any court, arbitral body or agency which if adversely determined, might reasonably be expected to have a material adverse effect on the business or financial condition of the Guarantor have (to the best of the Guarantor’s knowledge and belief) been started or threatened against the Guarantor; and

 

2.8                               the entry into and performance of this Guarantee and Indemnity will not conflict with the constitutional documents of the Guarantor or any law or regulation or document applicable to, or binding on, the Guarantor or any of its assets; and

 

2.9                               the Guarantor is not required to make any deduction or withholding from any payment which it may be obliged to make to any Finance Party under or pursuant to this Guarantee and Indemnity; and

 

2.10                        under the laws of the jurisdiction of incorporation of the Guarantor, it is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of this Guarantee and Indemnity that it be filed, recorded or enrolled with any court or other authority in any country or that any stamp, registration or similar tax be paid on or in relation to this Guarantee and Indemnity; and

 

2.11                        the Guarantor is not in breach of, or default under, any agreement of any sort binding on it or on all or any part of its assets which has or is reasonably likely to have a Material Adverse Effect; and

 

5

 

2.12                        the Guarantor is not aware of any material facts or circumstances which have not been disclosed to the Security Agent and which might, if disclosed, have adversely  affected the decision of a person considering whether or not to make loan facilities of the nature contemplated by the Loan Agreement available to the Borrowers; and

 

2.13                        the Guarantor has received a copy of the Loan Agreement and approves of, and agrees to, the terms and conditions of the Loan Agreement.

 

3                                         Guarantee and Indemnity

 

The Guarantor:

 

3.1                               irrevocably and unconditionally guarantees the due and punctual observance and performance by the Borrowers of all their obligations under the Finance Documents including, without limitation, the due and punctual payment of each and every part of the Indebtedness in accordance with the terms of the Finance Documents so that, if any of the Indebtedness is not paid when it is due and payable, whether on maturity or otherwise, the Guarantor will, immediately on demand, make such payment to the Security Agent in the manner specified by the Security Agent, together with interest on the amount demanded at the rate accruing on the same under the Loan Agreement from the date of demand until the date of payment, both before and after judgment; and

 

3.2                               agrees, as a separate and independent obligation, that, if any of the Indebtedness is not recoverable from the Guarantor under Clause 3.1 for any reason, the Guarantor will be liable as a principal debtor by way of indemnity for the same amount as that for which the Guarantor would have been liable had that Indebtedness been recoverable, and agrees to discharge its liability under this Clause 3.2 by making payment to the Security Agent immediately on demand together with interest on the amount demanded at the rate accruing on the same under the Loan Agreement from the date of demand until the date of payment, both before and after judgment.

 

4                                         Preservation of Guarantor’s Liability

 

4.1                               This Guarantee and Indemnity is a continuing security for the full amount of the Indebtedness from time to time until the expiry of the Facility Period.

 

6

 

4.2                               Any Finance Party may without the Guarantor’s consent and without notice to the Guarantor and without in any way releasing or reducing the Guarantor’s Liabilities:

 

4.2.1                     amend, vary, novate, or replace any of the Finance Documents (other than this Guarantee and Indemnity); and/or

 

4.2.2                     agree with the Borrowers to increase or reduce the amount of the Loan, or vary the terms and conditions for its repayment or prepayment (including, without limitation, the rate and/or method of calculation of interest payable on the Loan); and/or

 

4.2.3                     allow any time or other indulgence to any of the other Security Parties under or in connection with any of the Finance Documents; and/or

 

4.2.4                     renew, vary, release or refrain from enforcing any of the Finance Documents (other than this Guarantee and Indemnity); and/or

 

4.2.5                     compound with any of the other Security Parties; and/or

 

4.2.6                     enter into, renew, vary or terminate any other agreement or arrangement with any of the other Security Parties; and/or

 

4.2.7                     do or omit or neglect to do anything which might, but for this provision, operate to release or reduce the liability of the Guarantor under this Guarantee and Indemnity.

 

4.3                               The Guarantor’s Liabilities shall not be affected by:

 

4.3.1                     the absence of, or any defective, excessive or irregular exercise of, any of the powers of any of the other Security Parties; nor

 

4.3.2                     any security given or payment made to any Finance Party by any of the other Security Parties being avoided or reduced under any law (whether English or foreign) relating to bankruptcy or insolvency or analogous circumstance in force from time to time; nor

 

4.3.3                     any change in the constitution of the Guarantor or of any of the other Security Parties or of any Finance Party or the absorption of or amalgamation by any Finance Party in or with any other entity or the 

 

7

 

acquisition of all or any part of the assets or undertaking of any Finance Party by any other entity; nor

 

4.3.4                     the liquidation, administration, receivership, bankruptcy or insolvency of the Guarantor or any of the other Security Parties; nor

 

4.3.5                     any of the Finance Documents (other than this Guarantee and Indemnity) being defective, void or unenforceable, or the failure of any other person to provide any Finance Party with any security, guarantee or indemnity envisaged by the Loan Agreement; nor

 

4.3.6                     any composition, assignment or arrangement being made by any of the other Security Parties with any of its creditors; nor

 

4.3.7                     anything which would, but for this provision, have released or reduced the liability of the Guarantor to any Finance Party.

 

4.4                               Any Finance Party may continue the account(s) of the Borrowers or open one or more new accounts for the Borrowers notwithstanding any demand under this Guarantee and Indemnity, and the Guarantor’s liability at the date of demand shall not be released or affected by any subsequent payment into or out of any of the Borrowers’ accounts with any Finance Party.

 

5                                         Preservation of Finance Parties’ Rights

 

5.1                               This Guarantee and Indemnity is in addition to any other security, guarantee or indemnity now or in the future held by any of the Finance Parties in respect of the Indebtedness, whether from the Borrowers or any of them, the Guarantor or any other person, and shall not merge with, prejudice or be prejudiced by, any such security, guarantee or indemnity or any contractual or legal right of any of the Finance Parties.

 

5.2                               Any release, settlement, discharge or arrangement relating to the Guarantor’s Liabilities shall be conditional on no payment, assurance or security received by any Finance Party in respect of the Indebtedness being avoided or reduced under any law (whether English or foreign) in force from time to time relating to bankruptcy, insolvency or any (in the opinion of the Security Agent) analogous circumstance, and, after any such avoidance or reduction, each Finance Party shall

 

8

 

be entitled to exercise all of its rights, powers, discretions and remedies under or pursuant to this Guarantee and Indemnity and/or any other rights, powers, discretions or remedies which it would otherwise have been entitled to exercise, as if no release, settlement, discharge or arrangement had taken place.

 

5.3                               Following the full payment of the Indebtedness, the Security Agent shall be entitled to retain this Guarantee and Indemnity and any security which it may hold for the Guarantor’s Liabilities until the Security Agent is satisfied in its discretion that no Finance Party will have to make any payment under any law referred to in Clause 5.2.

 

5.4                               Until the expiry of the Facility Period the Guarantor shall not:

 

5.4.1                     be entitled to participate in any sums received by any Finance Party in respect of any of the Indebtedness; nor

 

5.4.2                     be entitled to participate in any security held by any Finance Party in respect of any of the Indebtedness nor stand in the place of, or be subrogated for, any Finance Party in respect of any such security; nor

 

5.4.3                     take any step to enforce any claim against any of the other Security Parties (or their respective estates or effects), nor claim or exercise any right of set-off or counterclaim against any of the other Security Parties, nor make any claim in the bankruptcy or liquidation of any of the other Security Parties, in respect of any sums paid by the Guarantor to any Finance Party or in respect of any sum which includes the proceeds of realisation of any security at any time held by any Finance Party in respect of any of the Guarantor’s Liabilities; nor

 

5.4.4                     take any steps to enforce any other claim which it may have against any of the other Security Parties without the prior written consent of the Security Agent, and then only on such terms and subject to such conditions as the Security Agent may impose.

 

5.5                               Any Finance Party may, subject to the terms and provisions of the Finance Documents, but shall not be obliged to, resort for its own benefit to any other means of payment at any time and in any order it thinks fit without releasing or reducing the Guarantor’s Liabilities.

 

9

 

5.6                               Any Finance Party may enforce this Guarantee and Indemnity either before or after resorting to any other means of payment without entitling the Guarantor to any benefit from or share in any such other means of payment until the expiry of the Facility Period.

 

5.7                               The Guarantor agrees that it is, and will throughout the Facility Period remain, a principal debtor in respect of the Guarantor’s Liabilities.

 

5.8                               No failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under this Guarantee and Indemnity shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy.  The rights and remedies provided in this Guarantee and Indemnity are cumulative and not exclusive of any rights or remedies provided by law.

 

6                                         Undertakings

 

6.1                               The Guarantor shall pay to the Security Agent on demand on a full indemnity basis all costs and expenses incurred by any Finance Party in or about or incidental to the exercise by it of its rights under this Guarantee and Indemnity, together with interest at the Default Rate on the amount demanded from the date of demand until the date of payment, both before and after judgment, which interest shall be compounded with the amount demanded at the end of such periods as the Security Agent may reasonably select.

 

6.2                               The Guarantor has not taken, and will not take without the prior written consent of the Security Agent (and then only on such terms and subject to such conditions as the Security Agent may impose), any security from any of the other Security Parties in connection with this Guarantee and Indemnity, and any security taken by the Guarantor notwithstanding this Clause shall be held by the Guarantor in trust for the Finance Parties absolutely as a continuing security for the Guarantor’s Liabilities.

 

6.3                               The Guarantor will observe and perform any and all covenants and undertakings in the Loan Agreement whose observance and performance by the Guarantor the Borrowers have undertaken to procure.

 

6.4                               The Guarantor shall without the consent of the Security Agent be permitted to:

 

10

 

6.4.1                     create or permit to arise any Encumbrance or other third party rights over any of its present or future assets or undertaking;

 

6.4.2                     transfer, lease or otherwise dispose of all or a substantial part of its assets, whether by one transaction or a number of transactions and whether related or not;

 

6.4.3                     declare or pay any Dividends or make any distribution;

 

6.4.4                     create, incur, assume or suffer to exist any indebtedness; and

 

6.4.5                     directly or indirectly lend money or make available credit or advance funds to any person or purchase or acquire any Equity Interests or make any capital contributions,

 

PROVIDED THAT no Event of Default has occurred and is continuing and the Guarantor is in compliance with its financial covenants contained in Clause 6.8 and the Borrowers are in compliance with all the covenants contained in Clause 12 of the Loan Agreement.

 

The foregoing proviso shall not restrict the Guarantor from allowing any Permitted Encumbrance to arise and such Permitted Encumbrance shall not require the prior written consent of the Security Agent.

 

6.5                               The Guarantor shall supply to the Security Agent as soon as the same become available, but in any event within one hundred and eighty (180) days after the end of each of its financial years, its audited consolidated financial statements for that financial year (such financial statements to be supplemented by updated details of all off-balance sheet and time charter hire commitments in respect of the Vessels), together with a Compliance Certificate, signed by the Chief Financial Officer of the Guarantor (as the case may be), setting out (in reasonable detail) computations as to compliance with Clause 6.8.  Each set of financial statements:

 

6.5.1                     shall be certified by a director of the Guarantor as fairly representing its financial condition as at the date at which those financial statements were drawn up; and

 

6.5.2                      shall be prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original 

 

11

 

Financial Statements unless, in relation to any set of financial statements, the Guarantor notifies the Security Agent that there has been a change in GAAP,  the accounting practices or reference periods and the Guarantor’s auditors deliver to the Security Agent:

 

(a)                                 a description of any change necessary for those financial statements to reflect the GAAP, accounting practices and reference periods upon which the Original Financial Statements were prepared; and

 

(b)                                 sufficient information, in form and substance as may be reasonably required by the Security Agent, to enable the Security Agent to make an accurate comparison between the financial position indicated in those financial statements and that indicated in the Original Financial Statements.

 

6.6                               The Guarantor shall supply to the Security Agent as soon as the same become available, but in any event within forty five (45) days after the end of each quarter during each of its financial years, its unaudited quarterly consolidated financial statements for that quarter (such financial statements to be supplemented by updated details of all off-balance sheet and time charter hire commitments in respect of the Vessels), together with a Compliance Certificate, signed by the Chief Financial Officer of the Guarantor (as the case may be), setting out (in reasonable detail) computations as to compliance with Clause 6.8 as at the date as at which those financial statements were drawn up.

 

6.7                               The Guarantor shall supply to the Security Agent:

 

6.7.1                     all documents which could reasonably be expected to have a material effect on the business, assets, financial creditworthiness of the Guarantor or the ability of the Guarantor to perform its obligations under any Finance Document to which it is a party, which are dispatched by the Guarantor to its shareholders (or any class of them) or its creditors generally at the same time as they are dispatched.  For the avoidance of doubt, this obligation does not include circulars to shareholders of a routine and non-material nature; and

 

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6.7.2                     promptly upon becoming aware of them, details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any Security Party, and which (a) might, if adversely determined, have a materially adverse effect on the business, assets, financial condition  or credit worthiness of that Security Party and (b) exceed the amount of two million Dollars ($2,000,000) in respect of the Guarantor and five hundred thousand Dollars ($500,000) in respect of a Borrower; and

 

6.7.3                     promptly, such further information regarding the financial condition, business and operations of any of the Security Parties as the Security Agent may reasonably request including, without limitation, cash flow analyses, quarterly reports on the financial and operating performance of each Vessel, in form and substance satisfactory to the Security Agent.

 

6.8                                 The Guarantor shall at all times during the Facility Period:-

 

(a)                                 maintain cash and Cash Equivalents (including available but undrawn working capital lines) in an amount of not less than seven hundred and fifty thousand Dollars ($750,000) per Fleet Vessel; and

 

(b)                                 not permit its maximum Leverage to exceed seventy per cent (70%); and

 

(c)                                  not permit its Consolidated Net Worth to be less than the Minimum Consolidated Net Worth,

 

which covenants shall be tested upon receipt of the interim financial statements delivered to the Agent pursuant to Clause 6.6 for a period ending on each Quarter Date.

 

6.9                                      In the event that any member of the Group enters into a loan facility with other lenders or financial institutions on terms and conditions such that any financial covenants analogous to those covenants in Clause 6.8 are, to the Agent’s opinion, on more favourable terms to those lenders or financial institutions, the Guarantor shall provide the same terms and conditions to the Finance Parties on the terms and conditions to be agreed between the Agent (acting on the instructions of the Lenders) and the Guarantor.

 

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6.10                               (a)  The Guarantor will not, and will not permit a Borrower to, amend, modify or change its certificate of incorporation, certificate of formation (including, without limitation, by the filing or modification of any certificate of designation), By-Laws, limited liability company agreement, partnership agreement (or equivalent organizational documents) or any agreement entered into by it with respect to its  capital stock or membership interests (or equivalent equity interests), or enter into any new agreement with respect to its capital stock or membership interests (or equivalent interests), other than the Shareholder Rights Agreement or the Registration Rights Agreement or any amendments, modifications or changes or any such new agreements which are not in any way materially adverse to the interests of the Lenders.

 

(b)  Notwithstanding the foregoing provisions of this Clause 6.10, upon not less than 30 days prior written notice to the Agent and so long as no Default or Event of Default exists and is continuing, a Borrower may, subject to the Agent’s consent (x) change its jurisdiction of organization to another jurisdiction and (y) change its form of organisation to another form, in each case to the extent satisfactory to the Agent, provided that, such Borrower shall promptly take all actions reasonably deemed necessary by the Security Agent to preserve, protect and maintain, without interruption, the security interest and Encumbrance of the Security Agent in any Collateral owned by such Borrower to the satisfaction of the Security Agent, and such Borrower shall have provided to the Agent and the Lenders such opinions of counsel as may be reasonably requested by the Agent to assure itself that the conditions of this proviso have been satisfied.

 

6.11                               (a)  The Guarantor and its Subsidiaries will not engage in any business other than the businesses in which they are engaged in as of the date of the Loan Agreement and activities directly related thereto, and similar or related businesses; (b) the Guarantor will not, and will not permit any of its Subsidiaries to, (i) be engaged in (A) the retailing, wholesaling, trading or importing of goods or services for or with residents of the Republic of the Marshall Islands; (B) any extractive industry in the Republic of Marshall Islands; (C) any regulated professional service activity in the Republic of the Marshall Islands; (D) the export of any commodity or goods manufactured, processed, mined or made in the Republic of the Marshall Islands; or (E) the ownership of real property in the Republic of the Marshall Islands; and (ii) do business in the Republic of the Marshall Islands except that the Guarantor and

 

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their Subsidiaries may (A) have its registered office in the Republic of the Marshall Islands and maintain their respective registered agent in the Republic of the Marshall Islands as required by the provisions of the Associations Law of 1990 of the Republic of the Marshall Islands, as amended; and (B) secure and maintain registry in the Republic of the Marshall Islands solely related to the operation or disposition of any vessel outside of the Republic of the Marshall Islands.

 

7                                         Payments

 

7.1                               All amounts payable by the Guarantor under or pursuant to this Guarantee and Indemnity shall be paid to such accounts at such banks as the Security Agent may from time to time direct to the Guarantor in the relevant currency in same day funds for immediate value.  Payment shall be deemed to have been received on the date on which the Security Agent receives authenticated advice of receipt, unless that advice is received by the Security Agent on a day other than a Business Day or at a time of day (whether on a Business Day or not) when the Security Agent in its discretion considers that it is impossible or impracticable to utilise the amount received for value that same day, in which event the payment in question shall be deemed to have been received on the Business Day next following the date of receipt of advice by the Security Agent.

 

7.2                               All payments to be made by the Guarantor pursuant to this Guarantee and Indemnity shall, subject only to Clause 7.3, be made free and clear of and without deduction for or on account of any taxes or other deductions, withholdings, restrictions, conditions, set-offs or counterclaims of any nature.

 

7.3                               If at any time any law requires (or is interpreted to require) the Guarantor to make any deduction or withholding from any payment, or to change the rate or manner in which any required deduction or withholding is made, the Guarantor will promptly notify the Security Agent and, simultaneously with making that payment, will pay whatever additional amount (after taking into account any additional taxes on, or deductions or withholdings from, or restrictions or conditions on, that additional amount) is necessary to ensure that, after making the deduction or withholding, each relevant Finance Party receives a net sum equal to the sum which it would have received had no deduction or withholding been made.

 

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7.4                               If at any time the Guarantor is required by law to make any deduction or withholding from any payment to be made by it pursuant to this Guarantee and Indemnity, the Guarantor will pay the amount required to be deducted or withheld to the relevant authority within the time allowed under the applicable law and will, no later than thirty days after making that payment, deliver to the Security Agent an original  receipt issued by the relevant authority, or other evidence acceptable to the Security Agent, evidencing the payment to that authority of all amounts required to be deducted or withheld.

 

7.5                               If the Guarantor pays any additional amount under Clause 7.3, and a Finance Party subsequently receives a refund or allowance from any tax authority which that Finance Party identifies as being referable to that increased amount so paid by the Guarantor, that Finance Party shall, as soon as reasonably practicable, pay to the Guarantor an amount equal to the amount of the refund or allowance received, if and to the extent that it may do so without prejudicing its right to retain that refund or allowance and without putting itself in any worse financial position than that in which it would have been had the relevant deduction or withholding not been required to have been made.  Nothing in this Clause 7.5 shall be interpreted as imposing any obligation on any Finance Party to apply for any refund or allowance nor as restricting in any way the manner in which any Finance Party organises its tax affairs, nor as imposing on any Finance Party any obligation to disclose to the Guarantor any information regarding its tax affairs or tax computations.

 

7.6                               Any certificate or statement signed by an authorised signatory of the Security Agent purporting to show the amount of the Indebtedness or of the Guarantor’s Liabilities (or any part of any of them) or any other amount referred to in any of the Finance Documents shall, save for manifest error or on any question of law, be conclusive evidence as against the Guarantor of that amount.

 

8                                         Currency

 

8.1                               The Guarantor’s liability under this Guarantee and Indemnity is to discharge the Indebtedness in the currency in which it is expressed to be payable (the “Agreed Currency”).

 

8.2                               If at any time any Finance Party receives (including by way of set-off) any payment by or on behalf of the Guarantor in a currency other than the Agreed Currency, that 

 

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payment shall take effect as a payment to that Finance Party of the amount in the Agreed Currency which that Finance Party is able to purchase (after deduction of any relevant costs) with the amount of the payment so received in accordance with its usual practice.

 

8.3                               To the extent that any payment to any Finance Party (whether by the Guarantor or any other person and whether under any judgment or court order or otherwise) in a currency other than the Agreed Currency shall on actual conversion into the Agreed Currency fall short of the relevant amount of the Indebtedness expressed in the Agreed Currency, then the Guarantor as a separate and independent obligation will indemnify that Finance Party against the shortfall.

 

9                                         Set-Off

 

9.1                               The Guarantor irrevocably authorises each Finance Party at any time to set off without notice any sums then due and payable by the Guarantor to that Finance Party under this Guarantee and Indemnity (irrespective of the branch or office, currency or place of payment) against any credit balance from time to time standing on any account of the Guarantor (whether current or otherwise, whether or not subject to notice and whether or not that credit balance is then due to the Guarantor) with any branch of that Finance Party in or towards satisfaction of the Guarantor’s Liabilities and, in the name of that Finance Party or the Guarantor, to do all acts (including, without limitation, purchasing or converting or exchanging any currency) which may be required to effect such set-off.

 

9.2                               Despite any term to the contrary in relation to any deposit or credit balance at any time on any account of the Guarantor with any Finance Party, no such deposit or credit balance shall be repayable or capable of being assigned, mortgaged, charged or otherwise disposed of or dealt with by the Guarantor until the Guarantor’s Liabilities have been discharged in full, but each Finance Party may from time to time permit the withdrawal of all or any part of any such deposit or balance without affecting the continued application of this Clause.

 

10                                  Application of Moneys

 

10.1                        All sums which any Finance Party (other than the Security Agent) receives (including by way of set-off) under or in connection with this Guarantee and 

 

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Indemnity, otherwise than by payment from the Security Agent, shall be paid to the Security Agent immediately on receipt, and that payment to the Security Agent shall be deemed to have been made by the Guarantor rather than by the receiving Finance Party.

 

10.2                        All sums which the Security Agent receives under or in connection with this Guarantee and Indemnity shall, unless otherwise agreed by the Security Agent or otherwise provided in the Loan Agreement, be applied by the Security Agent in or towards satisfaction of, or retention on account for, the Guarantor’s Liabilities in such manner as the Security Agent may in its discretion determine.

 

10.3                        The Security Agent may place any money received by it under or in connection with this Guarantee and Indemnity to the credit of a suspense account on such terms and subject to such conditions as the Security Agent may in its discretion determine for so long as the Security Agent thinks fit without any obligation in the meantime to apply that money in or towards discharge of the Indebtedness, and, despite such payment, the Security Agent may claim against any of the other Security Parties or prove in the bankruptcy, liquidation or insolvency of any of the other Security Parties for the whole of the Indebtedness at the date of the Security Agent’s demand for payment pursuant to this Guarantee and Indemnity, together with all interest, commission, charges and expenses accruing subsequently.

 

11                                  Partial Invalidity

 

If, at any time, any provision of this Guarantee and Indemnity is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

 

12                                  Further Assurance

 

The Guarantor agrees that from time to time on the written request of the Security Agent it will immediately execute and deliver to the Security Agent all further documents which the Security Agent may require for the purpose of perfecting or protecting the security intended to be created by this Guarantee and Indemnity.

 

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13                                  Miscellaneous

 

13.1                        All the covenants and agreements of the Guarantor in this Guarantee and Indemnity shall bind the Guarantor and its successors and permitted assignees and shall inure to the benefit of the Finance Parties and their respective successors, transferees and assignees.

 

13.2                        The representations and warranties on the part of the Guarantor contained in this Guarantee and Indemnity shall survive the execution of this Guarantee and Indemnity.

 

13.3                        No variation or amendment of this Guarantee and Indemnity shall be valid unless in writing and signed on behalf of the Guarantor and the Security Agent.

 

13.4                        Other than the Finance Parties, a person who is not a party to this Guarantee and Indemnity has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Guarantee and Indemnity.

 

14                                  Notices

 

The provisions of clause 18 of the Loan Agreement shall apply (mutatis mutandis) to this Guarantee and Indemnity as if it were set out in full with references to this Guarantee and Indemnity substituted for references to the Loan Agreement and with references to the Guarantor substituted for references to the Borrowers.

 

15                                  Law and Jurisdiction

 

15.1                        This Guarantee and Indemnity and any non-contractual obligations arising from or in connection with it shall in all respects be governed by and interpreted in accordance with English law.

 

15.2                        For the exclusive benefit of the Security Agent, the Guarantor irrevocably agrees that the courts of England are to have exclusive jurisdiction to settle any dispute (a) arising from or in connection with this Guarantee and Indemnity or (b) relating to any non-contractual obligations arising from or in connection with this Guarantee and Indemnity and that any proceedings may be brought in those courts.

 

15.3                        Nothing contained in this Clause shall limit the right of the Security Agent to commence any proceedings against the Guarantor in any other court of competent 

 

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jurisdiction nor shall the commencement of any proceedings against the Guarantor in one or more jurisdictions preclude the commencement of any proceedings in any other jurisdiction, whether concurrently or not.

 

15.4                        The Guarantor irrevocably waives any objection which it may now or in the future have to the laying of the venue of any proceedings in any court referred to in this Clause and any claim that those proceedings have been brought in an inconvenient  or inappropriate forum, and irrevocably agrees that a judgment in any proceedings commenced in any such court shall be conclusive and binding on it and may be enforced in the courts of any other jurisdiction.

 

15.5                        Without prejudice to any other mode of service allowed under any relevant law, the Guarantor:

 

15.5.1              irrevocably appoints WFW Legal Services Limited present of 15 Appold Street, London EC2A 2HB, England as its agent for service of process in relation to any proceedings before the English courts; and

 

15.5.2              agrees that failure by a process agent to notify the Guarantor of the process will not invalidate the proceedings concerned.

 

IN WITNESS  of which this Guarantee and Indemnity has been duly executed and delivered as a deed the day and year first before written.

 

	
SIGNED and DELIVERED
    	
)
    
	
as a DEED
    	
)
    
	
by GENCO   SHIPPING & TRADING LIMITED 
    	
)
    
	
acting by Apostolos Zafolias
    	
) 
    	
/s/ Apostolos Zafolias
    
	
its duly authorised President /
    	
)
    
	
Chief Financial Officer / Secretary /   Treasurer
    	
)
    
	
in the presence of:
    	
)
    
	
 
    	
 
    
	
 
    	
 
    
	
Witness signature: 
    	
/s/ Nathan C. Gaudio
    	
 
    
	
Name: Nathan C. Gaudio
    	
 
    
	
Address: 46 Trinity Place
    	
 
    
	
New York, NY 10006
    	
 
    
				

 

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