Document:

promissorynoteprivatebank.htm

Promissory Note

$7,083,333.33                                                                                                                                               December December 15, 2011

FOR VALUE RECEIVED, Sun Blueberry Hill LLC, a Michigan limited liability company; Sun Grand Lake LLC, a Michigan limited liability company; Sun Three Lakes LLC, a Michigan limited liability company; Sun Club Naples LLC, a Michigan limited liability company; Sun Naples Gardens LLC, a Michigan limited liability company; and Sun North Lake Estates LLC, a Michigan limited liability company (collectively, the “Borrower”), hereby promise to pay to the order of The PrivateBank and Trust Company, an Illinois state chartered bank (together with any and all of its successors and assigns and/or any other holder of this Note, “Lender”), without offset, in immediately available funds in lawful money of the United States of America, at the Commercial Real Estate Banking Office in Troy, Michigan, of Bank of America, N.A. (“Administrative Agent”) or at such other place as Administrative Agent from time to time may designate, the principal sum of Seven Million Eighty Three Thousand Three Hundred Thirty Three and 33/100 Dollars ($7,083,333.33) (or the unpaid balance of all principal advanced against this Note, if that amount is less), together with interest on the unpaid principal balance of this Note from day to day outstanding as hereinafter provided.  All payments and prepayments under this Note shall be made to the Administrative Agent and disbursed by the Administrative Agent to Lender pursuant to the Loan Agreement described below.

Section 1.                      Payment Schedule and Maturity Date.  Prior to maturity, accrued and unpaid interest shall be due and payable in arrears on the 1st day of each month commencing on February 1, 2012.  The principal of this Note shall be due and payable in equal installments of $14,609.37 each, on July 1, 2012 and on the 1st day of each succeeding month thereafter until this Note shall have been fully paid and satisfied; provided, that on December 15, 2014 (the “Maturity Date”), the final maturity of this Note, the entire principal balance of this Note then unpaid and all accrued interest then unpaid shall be finally due and payable.

Section 1A                   Extension Option.  Lender shall grant a request by Borrower to extend the Maturity Date of this Note to December 15, 2015 (the “Extended Maturity Date”), upon and subject to the following terms and conditions:

(a)           Basic Conditions.  Unless otherwise agreed by the Administrative and the Lenders in writing, in accordance with the provisions of the Loan Agreement:

(i)           Borrower shall request the extension, if at all, by written notice to Administrative Agent not more than 180 days, and not less than 60 days, prior to the Maturity Date.

(ii)           At the time of the request, and at the time of the extension, there shall not exist any Event of Default, nor any condition or state of facts which after notice and/or lapse of time would constitute an Event of Default.

(iii)           Current financial statements regarding Borrower and the Guarantor and all other financial statements and other information as may be required under the Loan Documents regarding Borrower, Guarantor and the Property, shall have been submitted promptly to Administrative Agent, and there shall not have occurred, in the opinion of Administrative Agent, any material adverse change in the business or financial condition of Borrower or Guarantor, or in the Property or in any other state of facts submitted to Administrative Agent on behalf of Lender in connection with the Loan Documents, from that which existed on the date of this Note.

(iv)           Whether or not the extension becomes effective, Borrower shall pay all out-of-pocket costs and expenses actually incurred by Administrative Agent and Lender in connection with the proposed extension (pre- and post-closing), including appraisal fees, environmental audit and reasonable attorneys’ fees actually incurred by Administrative Agent or Lender; all such costs and expenses incurred up to the time of Administrative

  

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Agent’s and Lender’s written agreement to the extension shall be due and payable prior to Administrative Agent’s and Lender’s execution of that agreement (or if the proposed extension does not become effective, then upon demand by Administrative Agent or Lender), and any future failure to pay such amounts shall constitute a default under the Loan Documents.

(vi)           All applicable regulatory requirements, including appraisal requirements, shall have been satisfied with respect to the extension.

(vii)           Not later than the Maturity Date, (A) the extension shall have been consented to and documented to Administrative Agent’s satisfaction by Borrower, Guarantor, the Administrative Agent and Lenders; (B) Administrative Agent shall have been provided with an updated title report and appropriate title insurance endorsements shall have been issued as required by Administrative Agent; and (C) Borrower shall have paid to Administrative Agent for the account of the Lender a non-refundable extension fee in an amount equal to 12.5 basis points (.125%) of the then outstanding principal balance hereunder.

(ix)           As of the most recent Determination Date occurring prior to such extension, Borrower shall satisfy a Debt Service Coverage Ratio (as hereinafter defined) of at least 1.40 to 1.00.  As used herein, “Debt Service Coverage Ratio” means, as of any Determination Date, for the applicable Calculation Period the ratio, as determined by Administrative Agent, of Net Operating Income to Debt Service.  As used herein, the following terms shall have the meanings indicated below:

“Actual Operating Revenue” means, with respect to any period of time, all income, computed on a trailing 12-month basis in accordance with generally accepted accounting principles, collected from the ownership and operation of the Property from whatever source (other than any source affiliated with Borrower or the Guarantor), including Rents, utility charges, escalations, forfeited security deposits, interest on credit accounts, service fees or charges, license fees, parking fees, and other required pass-throughs, but excluding sales, use and occupancy or other taxes on receipts required to be accounted for by Borrower to any Governmental Authority, refunds from tenants, uncollectible accounts, sales of furniture, fixtures and equipment, interest income, Condemnation Awards, Insurance Proceeds (other than business interruption or other loss of income insurance), unforfeited security deposits, utility and other similar deposits, income from tenants not paying rent, income from tenants in bankruptcy, and non-recurring or extraordinary income, including lease termination payments.  Actual Operating Revenue shall be net of rent concessions and credits.

“Assumed Interest Rate” means the annual yield payable on the last day of the applicable Calculation Period on ten (10) year United States Treasury obligations in amounts approximating the principal balance of the Loans outstanding at the inception of the Calculation Period plus two hundred fifty (250) basis points per annum; provided, however, that the Assumed Interest Rate shall be not less than seven percent (7.0%) per annum.

“Calculation Period” means the twelve (12) month period ending on any Determination Date.

“Debt Service” means the higher of (a) the actual principal and interest payable under the Loans during the applicable Calculation Period, or (b) the payments of principal and interest that would have been payable under a hypothetical loan during the Calculation Period, assuming (i) an initial loan balance equal to the principal balance of the Loans outstanding at the inception of the Calculation Period, (ii) an interest rate equal to the Assumed Interest Rate, and (iii) amortization of the aggregate principal indebtedness over a thirty (30) year amortization period.

  

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“Determination Date” means the last day of any fiscal quarter as of which Administrative Agent makes a determination regarding Borrower’s satisfaction or failure to satisfy the Debt Service Coverage Ratio as described herein.

“Net Operating Income” means, with respect to any period of time, the amount obtained by subtracting Operating Expenses from Actual Operating Revenue, as such amount may be adjusted by Administrative Agent in its reasonable discretion based on Administrative Agent’s customary underwriting standards, including adjustments for vacancy allowance and other concessions, less a capital expenditure reserve equal to $50 for each pad in the Property.  As used herein, “vacancy allowance” means an allowance for reductions in potential income attributable to vacancies, tenant turnover, and nonpayment of rent.

“Operating Expenses” means, with respect to any period of time, the total of all expenses actually paid or payable, computed on a trailing 12-month basis in accordance with generally accepted accounting principles, of whatever kind relating to the ownership, operation, maintenance or management of the Property, including utilities, ordinary repairs and maintenance, insurance premiums, ground rents, if any, license fees, Taxes, advertising expenses, payroll and related taxes, management fees equal to the greater of 3% of Actual Operating Revenue or the management fees actually paid under any management agreement and operational equipment or other lease payments, but specifically excluding depreciation and amortization, income taxes, debt service on the Loans, and any item of expense that would otherwise be covered by the provisions hereof but which is paid by any tenant under such tenant’s Lease or other agreement.

If all of the foregoing conditions are not satisfied strictly in accordance with their terms, the extension shall not be or become effective.

(b)           Changes in Loan Terms.  All terms and conditions of the Loan Documents shall continue to apply to the extended term except to the extent changed as indicated below (such changes to be effective on and after the original Maturity Date, if the extension becomes effective as provided herein):

(i)           Payments.  The amount of the monthly installments of principal required under this Note shall increase to $16,134.26.

(ii)           Definition of Maturity Date.  The Maturity Date shall mean the Extended Maturity Date.

Section 1B                   Second Extension Option.  Provided the Borrower has exercised the extension option provided for in Section 1A, Lender shall grant a request by Borrower to extend the Extended Maturity Date of this Note to December 15, 2016 (the “Second Extended Maturity Date”), upon and subject to the following terms and conditions:

(a)           Basic Conditions.  Unless otherwise agreed by the Administrative and the Lenders in writing, in accordance with the provisions of the Loan Agreement:

(i)           Borrower shall request the extension, if at all, by written notice to Administrative Agent not more than 180 days, and not less than 60 days, prior to the Extended Maturity Date.

(ii)           At the time of the request, and at the time of the extension, there shall not exist any Event of Default, nor any condition or state of facts which after notice and/or lapse of time would constitute an Event of Default.

  

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(iii)           Current financial statements regarding Borrower and the Guarantor and all other financial statements and other information as may be required under the Loan Documents regarding Borrower, Guarantor and the Property, shall have been submitted promptly to Administrative Agent, and there shall not have occurred, in the opinion of Administrative Agent, any material adverse change in the business or financial condition of Borrower or Guarantor, or in the Property or in any other state of facts submitted to Administrative Agent on behalf of Lender in connection with the Loan Documents, from that which existed on the date of this Note.

(iv)           Whether or not the extension becomes effective, Borrower shall pay all out-of-pocket costs and expenses actually incurred by Administrative Agent and Lender in connection with the proposed extension (pre- and post-closing), including appraisal fees, environmental audit and reasonable attorneys’ fees actually incurred by Administrative Agent or Lender; all such costs and expenses incurred up to the time of Administrative Agent’s and Lender’s written agreement to the extension shall be due and payable prior to Administrative Agent’s and Lender’s execution of that agreement (or if the proposed extension does not become effective, then upon demand by Administrative Agent or Lender), and any future failure to pay such amounts shall constitute a default under the Loan Documents.

(vi)           All applicable regulatory requirements, including appraisal requirements, shall have been satisfied with respect to the extension.

(vii)           Not later than the Extended Maturity Date, (A) the extension shall have been consented to and documented to Administrative Agent’s satisfaction by Borrower, Guarantor, the Administrative Agent and Lenders; (B) Administrative Agent shall have been provided with an updated title report and appropriate title insurance endorsements shall have been issued as required by Administrative Agent; and (C) Borrower shall have paid to Administrative Agent for the account of the Lender a non-refundable extension fee in an amount equal to 12.5 basis points (.125%) of the then outstanding principal balance hereunder.

If all of the foregoing conditions are not satisfied strictly in accordance with their terms, the extension shall not be or become effective.

(b)           Changes in Loan Terms.  All terms and conditions of the Loan Documents shall continue to apply to the extended term except to the extent changed as indicated below (such changes to be effective on and after the Extended Maturity Date, if the extension becomes effective as provided herein):

(i)           Definition of Maturity Date.  The Maturity Date shall mean the Second Extended Maturity Date.

Section 2.                   Security; Loan Documents.  The security for this Note includes Mortgages (as the same may from time to time be amended, restated, modified or supplemented, collectively the “Mortgage”) from Borrower to Administrative Agent, as agent for the Lenders, conveying and encumbering certain real and personal property more particularly described therein (the “Property”).  This Note, the Mortgage, the Term Loan Agreement between Borrower, the Administrative Agent, the Lender and the other Lender(s) party thereto, of even date herewith (as the same may from time to time be amended, restated, modified or supplemented, the “Loan Agreement”) and all other documents now or hereafter securing, guaranteeing or executed in connection with the loan evidenced by this Note (the “Loan”), as the same may from time to time be amended, restated, modified or supplemented, are herein sometimes called individually a “Loan Document” and together the “Loan Documents.”

Section 3                      Interest Rate.

(a)           BBA LIBOR Daily Floating Rate.  The unpaid principal balance of this Note from day to day outstanding which is not past due, shall bear interest at a fluctuating rate of interest per annum equal to the BBA LIBOR Daily

  

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Floating Rate for that day plus two hundred fifty (250) basis points per annum.  The “BBA LIBOR Daily Floating Rate” shall mean a fluctuating rate of interest per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as reasonably selected by Administrative Agent from time to time) as determined for each Business Day at approximately 11:00 a.m. London time two (2) London Banking Days prior to the date in question, for U.S. Dollar deposits (for delivery on the first day of such interest period) with a one month term, as adjusted from time to time in Administrative Agent’s sole discretion for reserve requirements, deposit insurance assessment rates and other regulatory costs.  A “London Banking Day” is a day on which banks in London are open for business and dealing in offshore dollars.  Interest shall be computed for the actual number of days which have elapsed, on the basis of a 360-day year.

(b)           Alternative Rates.  Administrative Agent may notify Borrower if the BBA LIBOR Daily Floating Rate is not available for any reason, or if Administrative Agent reasonably determines that no adequate basis exists for determining the BBA LIBOR Daily Floating Rate, or that the BBA LIBOR Daily Floating Rate will not adequately and fairly reflect the cost to Lender of funding the Loan, or that any applicable Law or regulation or compliance therewith by Lender prohibits or restricts or makes impossible the charging of interest based on the BBA LIBOR Daily Floating Rate.  If Administrative Agent so notifies Borrower, then interest shall accrue and be payable on the unpaid principal balance of this Note at a fluctuating rate of interest equal to the Prime Rate of Lender plus one hundred fifty (150) basis points per annum, from the date of such notification by Administrative Agent until Administrative Agent notifies Borrower that the circumstances giving rise to such suspension no longer exist, or until the Maturity Date of this Note (whether by acceleration, declaration, extension or otherwise), whichever is earlier to occur.  The term “Prime Rate” means, on any day, the rate of interest per annum then most recently established by Lender as its “prime rate.”  Any such rate is a general reference rate of interest, may not be related to any other rate, and may not be the lowest or best rate actually charged by Lender to any customer or a favored rate and may not correspond with future increases or decreases in interest rates charged by other lenders or market rates in general, and Lender may make various business or other loans at rates of interest having no relationship to such rate.  Any change in the Prime Rate shall take effect at the opening of business on the day specified in the public announcement of a change in Lender’s Prime Rate.  If Lender (including any subsequent holder of this Note) ceases to exist or to establish or publish a prime rate from which the Prime Rate is then determined, the applicable variable rate from which the Prime Rate is determined thereafter shall be instead the prime rate reported in The Wall Street Journal (or the average prime rate if a high and a low prime rate are therein reported), and the Prime Rate shall change without notice with each change in such prime rate as of the date such change is reported.

(c)           Default Rate.  After the occurrence of a Default (including the expiration of any applicable cure period), the Lender, in the Lender’s sole discretion and without notice or demand, may raise the rate of interest accruing on the outstanding principal balance of this Note by three hundred (300) basis points above the rate of interest otherwise applicable, independent of whether the Lender elects to accelerate the outstanding principal balance of this Note.

Section 4                      Prepayment.  Borrower may prepay the principal balance of this Note, in full at any time or in part from time to time, without fee, premium or penalty, provided that: (a) Administrative Agent shall have actually received from Borrower prior written notice of (i) Borrower’s intent to prepay, (ii) the amount of principal which will be prepaid (the “Prepaid Principal”), and (iii) the date on which the prepayment will be made; (b) each prepayment shall be in the amount of $1,000 or a larger integral multiple of $1,000 (unless the prepayment retires the outstanding balance of this Note in full); and (c) each prepayment shall be in the amount of 100% of the Prepaid Principal, plus accrued unpaid interest thereon to the date of prepayment, plus any other sums which have become due to Lender under the Loan Documents on or before the date of prepayment but have not been paid.

Section 5.                   Late Charges.  If Borrower shall fail to make any payment under the terms of this Note (other than the payment due at maturity) within fifteen (15) days after the date such payment is due, Borrower shall pay to Administrative Agent for disbursement to Lender on demand a late charge equal to four percent (4%) of the amount of such payment.  Such fifteen (15) day period shall not be construed as in any way extending the due date of any payment.  The late charge is imposed for the purpose of defraying the expenses of Lender incident to handling such delinquent payment.  This charge

  

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shall be in addition to, and not in lieu of, any other amount that Administrative Agent or Lender may be entitled to receive or action that Administrative Agent or Lender may be authorized to take as a result of such late payment.

Section 6.                   Certain Provisions Regarding Payments.  All payments made under this Note shall be applied, to the extent thereof, to late charges, to accrued but unpaid interest, to unpaid principal, and to any other sums due and unpaid to Lender under the Loan Documents.  Upon the occurrence of an Event of Default, all payments made under this Note shall be applied, to the extent thereof, as provided in the Loan Agreement, any instructions from Borrower or anyone else to the contrary notwithstanding.  Remittances shall be made without offset, demand, counterclaim, deduction, or recoupment (each of which is hereby waived) and shall be accepted subject to the condition that any check or draft may be handled for collection in accordance with the practice of the collecting bank or banks.  Acceptance by Lender of any payment in an amount less than the amount then due on any indebtedness shall be deemed an acceptance on account only, notwithstanding any notation on or accompanying such partial payment to the contrary, and shall not in any way (a) waive or excuse the existence of an Event of Default (as hereinafter defined), (b) waive, impair or extinguish any right or remedy available to Administrative Agent, as agent for Lender, hereunder or under the other Loan Documents, or (c) waive the requirement of punctual payment and performance or constitute a novation in any respect.  Payments received after 2:00 p.m. shall be deemed to be received on, and shall be posted as of, the following Business Day.  Whenever any payment under this Note or any other Loan Document falls due on a day which is not a Business Day, such payment may be made on the next succeeding Business Day.

Section 7.                   Events of Default.  The occurrence of any one or more of the following shall constitute an “Event of Default” under this Note:

(a)         Borrower fails to pay any amounts payable by Borrower to Lender under the terms of this Note within seven (7) days after Administrative Agent gives written notice to the Borrower that such amounts are past due.

(b)         Any covenant, agreement or condition in this Note is not fully and timely performed, observed or kept.  If the breach is capable of being remedied, the breach will not be considered an Event of Default under this Note for a period of thirty (30) days after the date on which Administrative Agent gives written notice of the breach to Borrower, or, if the breach cannot be remedied within a period of thirty (30) days, such longer period of time as may be necessary to remedy the breach provided Borrower is diligently pursuing a remedy of the breach and completes it within a reasonable time.

(c)         An Event of Default (as therein defined) occurs under any of the Loan Documents other than this Note (subject to any applicable grace or cure period).

Section 8.                   Remedies.  Upon the occurrence of an Event of Default, Administrative Agent, as agent for Lender, may at any time thereafter exercise any one or more of the following rights, powers and remedies:

(a)         Administrative Agent may accelerate the Maturity Date and declare the unpaid principal balance and accrued but unpaid interest on this Note, and all other amounts payable hereunder and under the other Loan Documents, at once due and payable, and upon such declaration the same shall at once be due and payable.

(b)         Administrative Agent and Lender may exercise any of their other rights, powers and remedies under the Loan Documents or at law or in equity.

Section 9.                   Remedies Cumulative.  All of the rights and remedies of Administrative Agent and Lender under this Note and the other Loan Documents are cumulative of each other and of any and all other rights at law or in equity, and the exercise by Administrative Agent or Lender of any one or more of such rights and remedies shall not preclude the simultaneous or later exercise by Administrative Agent or Lender of any or all such other rights and remedies.  No single or partial exercise of any right or remedy shall exhaust it or preclude any other or further exercise thereof, and every right and remedy may be exercised at any time and from time to time.  No failure by Administrative Agent or Lender to exercise, nor

  

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delay in exercising, any right or remedy shall operate as a waiver of such right or remedy or as a waiver of any Event of Default.

Section 10.                   Costs and Expenses of Enforcement.  Borrower agrees to pay to Administrative Agent on demand all costs and expenses incurred by Administrative Agent or Lender in seeking to collect this Note or to enforce any of Administrative Agent’s or Lender’s rights and remedies under the Loan Documents, including court costs and reasonable attorneys’ fees and expenses, whether or not suit is filed hereon, or whether in connection with bankruptcy, insolvency or appeal.

Section 11.                   Service of Process.  Borrower hereby consents to process being served in any suit, action, or proceeding instituted in connection with this Note by the mailing of a copy thereof by certified mail, postage prepaid, return receipt requested, to Borrower.  Borrower irrevocably agrees that such service shall be deemed to be service of process upon Borrower in any such suit, action, or proceeding.  Nothing in this Note shall affect the right of Administrative Agent to serve process in any manner otherwise permitted by law and nothing in this Note will limit the right of Administrative Agent otherwise to bring proceedings against Borrower in the courts of any jurisdiction or jurisdictions, subject to any provision or agreement for arbitration or dispute resolution set forth in the Loan Agreement.

Section 12.                   Heirs, Successors and Assigns.  The terms of this Note and of the other Loan Documents shall bind and inure to the benefit of the heirs, devisees, representatives, successors and assigns of the parties.  The foregoing sentence shall not be construed to permit Borrower to assign the Loan except as otherwise permitted under the Loan Documents.

Section 13.                   General Provisions.  Time is of the essence with respect to Borrower’s obligations under this Note.  If more than one person or entity executes this Note as Borrower, all of said parties shall be jointly and severally liable for payment of the indebtedness evidenced hereby.  Borrower and each party executing this Note as Borrower hereby severally (a) waive demand, presentment for payment, notice of dishonor and of nonpayment, protest, notice of protest, notice of intent to accelerate, notice of acceleration and all other notices (except any notices which are specifically required by this Note or any other Loan Document), filing of suit and diligence in collecting this Note or enforcing any of the security herefor; (b) agree to any substitution, subordination, exchange or release of any such security or the release of any party primarily or secondarily liable hereon; (c) agree that Administrative Agent shall not be required first to institute suit or exhaust its remedies hereon against Borrower or others liable or to become liable hereon or to perfect or enforce its rights against them or any security herefor; (d) consent to any extensions or postponements of time of payment of this Note for any period or periods of time and to any partial payments, before or after maturity, and to any other indulgences with respect hereto, without notice thereof to any of them; and (e) submit (and waive all rights to object) to non-exclusive personal jurisdiction of any state or federal court sitting in the state and county in which any of the Property is located  is to be made for the enforcement of any and all obligations under this Note and the other Loan Documents; (f) waive the benefit of all homestead and similar exemptions as to this Note; (g) agree that their liability under this Note shall not be affected or impaired by any determination that any title, security interest or lien taken by Administrative Agent, as agent for Lender, to secure this Note is invalid or unperfected; and (h) hereby subordinate to the Loan and the Loan Documents any and all rights against Borrower and any security for the payment of this Note, whether by subrogation, agreement or otherwise, until this Note is paid in full.  A determination that any provision of this Note is unenforceable or invalid shall not affect the enforceability or validity of any other provision and the determination that the application of any provision of this Note to any person or circumstance is illegal or unenforceable shall not affect the enforceability or validity of such provision as it may apply to other persons or circumstances.  This Note may not be amended except in a writing specifically intended for such purpose and executed by the party against whom enforcement of the amendment is sought.  Captions and headings in this Note are for convenience only and shall be disregarded in construing it.  THIS NOTE, AND ITS VALIDITY, ENFORCEMENT AND INTERPRETATION, SHALL BE GOVERNED BY MICHIGAN LAW (WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES) AND APPLICABLE UNITED STATES FEDERAL LAW.  Whenever a time of day is referred to herein, unless otherwise specified such time shall be the local time of the place where payment of this Note is to be made.  The term “Business Day” shall mean a day on which Administrative Agent is open for the conduct of

  

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substantially all of its banking business at its office in the city in which this Note is payable (excluding Saturdays and Sundays).  Capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Loan Agreement.  The words “include” and “including” shall be interpreted as if followed by the words “without limitation.”

Section 14.                   Notices.  Any notice, request, or demand to or upon Borrower, Administrative Agent or Lender shall be deemed to have been properly given or made when delivered in accordance with the terms of the Loan Agreement regarding notices.

Section 15.                   No Usury.  It is expressly stipulated and agreed to be the intent of Borrower and Lender at all times to comply with applicable state law or applicable United States federal law (to the extent that it permits Lender to contract for, charge, take, reserve, or receive a greater amount of interest than under state law) and that this Section shall control every other covenant and agreement in this Note and the other Loan Documents.  If applicable state or federal law should at any time be judicially interpreted so as to render usurious any amount called for under this Note or under any of the other Loan Documents, or contracted for, charged, taken, reserved, or received with respect to the Loan, or if Administrative Agent’s exercise of the option to accelerate the Maturity Date, or if any prepayment by Borrower results in Borrower having paid any interest in excess of that permitted by applicable law, then it is Lender’s express intent that all excess amounts theretofore collected by Administrative Agent or Lender shall be credited on the principal balance of this Note and all other indebtedness secured by the Mortgage, and the provisions of this Note and the other Loan Documents shall immediately be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without the necessity of the execution of any new documents, so as to comply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder or thereunder.  All sums paid or agreed to be paid to Lender for the use or forbearance of the Loan shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of the Loan.

Section 16.                   Disputes.  Disputes under this Note are subject to the dispute resolution provisions as set forth in the Loan Agreement and as to any dispute that for any reason is not within arbitration, the parties waive all rights to trial by jury, as further set forth in the Loan Agreement.

Section 17.                   Joint and Several Liability.

(a)           Each Borrower agrees that it is jointly and severally liable to Lender for the payment of all obligations arising under this Note and the other Loan Documents, and that such liability is independent of the obligations of any other Borrower.  Administrative Agent, on behalf of Lender, may bring an action against any Borrower, whether an action is brought against any other Borrower.

(b)           Each Borrower agrees that any release which may be given by Administrative Agent, on behalf of Lender, to another Borrower or Guarantor will not release such Borrower from its obligations under this Note or any of the other Loan Documents.

(c)           Until the Loan is paid in full, each Borrower waives any right to assert against Administrative Agent or Lender any defense, setoff, counterclaim or claim that such Borrower may have against any other Borrower or any other party liable to Lender for the obligations of the Borrower under this Note or any of the other Loan Documents.

(d)           Each Borrower agrees that it is solely responsible for keeping itself informed as to the financial condition of each other Borrower and of all circumstances which bear upon the risk of nonpayment.  Each Borrower waives any right it may have to require Administrative Agent or Lender to disclose to such Borrower any information that Administrative Agent or Lender may now or hereafter acquire concerning the financial condition of any other Borrower.

(e)           Borrower represents and warrants to Administrative Agent and Lender that each Borrower will derive

  

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benefit, directly and indirectly, from the collective administration and availability of the Loan under this Note and the other Loan Documents.  Borrower agrees that neither Administrative Agent nor Lender will be required to inquire as to the disposition by any Borrower of funds disbursed in accordance with the terms of this Note or any of the other Loan Documents.

(f)           Until all obligations of Borrower to Lender under this Note and the other Loan Documents have been paid in full, each Borrower waives any right of subrogation, reimbursement, indemnification and contribution (contractual, statutory or otherwise), including any claim or right of subrogation under the Bankruptcy Code (Title 11, United States Code) or any successor statute, that such Borrower may now or hereafter have against any other Borrower with respect to the indebtedness incurred under this Note or any of the other Loan Documents.  Each Borrower waives any right to enforce any remedy which Administrative Agent or Lender now has or may hereafter have against any other Borrower, and waives any benefit of, and any right to participate in, any security now or hereafter held by Administrative Agent on behalf of Lender.

(g)           Each Borrower hereby waives any election of remedies by Administrative Agent on behalf of Lender that impairs any subrogation or other right of such Borrower to proceed against any other Borrower or other person, including any loss of rights resulting from any applicable anti-deficiency laws relating to nonjudicial foreclosures of real property or other laws limiting, qualifying or discharging obligations or remedies.

[SIGNATURE PAGE FOLLOWS]

  

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IN WITNESS WHEREOF, Borrower has caused this Note to be executed as of the date first above written.

BORROWER:

 

Sun Blueberry Hill LLC, a Michigan limited liability company

	
  

	
By:

	
Sun Communities Operating Limited Partnership, a Michigan limited partnership

	
  

	
Title:

	
Sole Member

	
  

	
By:

	
Sun Communities, Inc., a Maryland corporation

	
  

	
Title:

	
General Partner

By: /s/ Jonathan M. Colman 

        Name:  Jonathan M. Colman

Title:  Executive Vice President

 

 

Sun Grand Lake LLC, a Michigan limited liability company

	
  

	
By:

	
Sun Communities Operating Limited Partnership, a Michigan limited partnership

	
  

	
Title:

	
Sole Member

	
  

	
By:

	
Sun Communities, Inc., a Maryland corporation

	
  

	
Title:

	
General Partner

By:/s/ Jonathan M. Colman

Name:  Jonathan M. Colman

Title:  Executive Vice President

 

 

Sun Three Lakes LLC, a Michigan limited liability company

	
  

	
By:

	
Sun Communities Operating Limited Partnership, a Michigan limited partnership

	
  

	
Title:

	
Sole Member

	
  

	
By:

	
Sun Communities, Inc., a Maryland corporation

	
  

	
Title:

	
General Partner

By: /s/ Jonathan M. Colman

Name:  Jonathan M. Colman

Title:  Executive Vice President

 

  

  

  

Sun Club Naples LLC, a Michigan limited liability company

 

	
  

	
By:

	
Sun Communities Operating Limited Partnership, a Michigan limited partnership

	
  

	
Title:

	
Sole Member

	
  

	
By:

	
Sun Communities, Inc., a Maryland corporation

	
  

	
Title:

	
General Partner

By: /s/ Jonathan M. Colman

Name:  Jonathan M. Colman

Title:  Executive Vice President

 

 

Sun Naples Gardens LLC, a Michigan limited liability company

	
  

	
By:

	
Sun Communities Operating Limited Partnership, a Michigan limited partnership

	
  

	
Title:

	
Sole Member

	
  

	
By:

	
Sun Communities, Inc., a Maryland corporation

	
  

	
Title:

	
General Partner

By:/s/ Jonathan M. Colman

Name:  Jonathan M. Colman

Title:  Executive Vice President

 

 

Sun North Lake Estates LLC, a Michigan limited liability company

	
  

	
By:

	
Sun Communities Operating Limited Partnership, a Michigan limited partnership

	
  

	
Title:

	
Sole Member

	
  

	
By:

	
Sun Communities, Inc., a Maryland corporation

	
  

	
Title:

	
General Partner

By: /s/ Jonathan M. Colman

Name:  Jonathan M. Colman

Title:  Executive Vice Presidentkl12013_ex10-1.htm

 

 

Exhibit 10.1

 

AMENDMENT AND SUPPLEMENT NO. 5 TO

SENIOR SECURED CREDIT AGREEMENT

 

THIS AMENDMENT AND SUPPLEMENT NO. 5 TO SENIOR SECURED CREDIT AGREEMENT (this “Amendment”) is made as of December 21, 2011, by and among (1) GENCO SHIPPING & TRADING LIMITED, a corporation organized and existing under the laws of the Republic of Marshall Islands (the “Borrower”), (2) the banks and financial institutions as are signatories hereto, as lenders (the “Lenders”), (3) DNB BANK ASA (f/k/a DnB NOR Bank ASA) (“DnB”) as Administrative Agent (in such capacity, the “Administrative Agent”), mandated lead arranger, bookrunner (in such capacity, the “Bookrunner”), security trustee and collateral agent under the Security Documents (in such capacity, the “Collateral Agent”), and (4) BANK OF SCOTLAND PLC, as mandated lead arranger (together with DnB, in such capacity, the “Mandated Lead Arrangers”) and amends and is supplemental to the Senior Secured Credit Agreement dated as of July 20, 2007, as amended by Amendment and Supplement No. 1 to the Senior Secured Credit Agreement dated as of September 21, 2007, Amendment and Supplement No. 2 to the Senior Secured Credit Agreement dated as of February 13, 2008, Amendment and Supplement No. 3 to the Senior Secured Credit Agreement dated as of June 18, 2008, and Amendment and Supplement No. 4 to the Senior Secured Credit Agreement dated as of January 26, 2009 (the “Credit Agreement”), made by and among the parties.

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the Credit Agreement, the Lenders made available to the Borrower a senior secured credit facility in the amount of US$1,377,000,000 (the “Facility”);

 

WHEREAS, the Borrower has requested, and the Lenders signatory hereto have agreed, subject to the terms and conditions of this Amendment, that the application of the covenants contained in Sections 11.07 and 11.08 of the Credit Agreement be suspended during the Waiver Period (as defined below); and

 

WHEREAS, the Borrower and the Lenders signatory hereto have agreed to certain other amendments to the Credit 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:

 

1.   Definitions.  Unless otherwise defined herein, words and expressions defined in the Credit Agreement have the same meanings when used herein, including in the recitals hereto.

 

2.   Representations and Warranties.  The Borrower hereby reaffirms, as of the date hereof, each and every representation and warranty made thereby in the Credit Agreement, the Note and the Security Documents (updated mutatis mutandis). The Borrower hereby represents and warrants that there have been no changes to the Certificate of Incorporation or By-Laws (or equivalent organizational documents) of any Credit Party from the most recent copies of such documents delivered to the Administrative Agent.

 

 

  

  

  

 

 

3.   No Defaults.  The Borrower hereby represents and warrants that as of the date hereof no Event of Default or event which, with the passage of time, giving of notice or both would become an Event of Default, has occurred.

 

4.   Performance of Covenants.  Each Credit Party hereby reaffirms that it has duly performed and observed the covenants and undertakings set forth in the Credit Agreement, the Note and the Security Documents, on its part to be performed, and each Credit Party covenants and undertakes to continue duly to perform and observe such covenants and undertakings so long as the Credit Agreement, as the same is amended and supplemented hereby, and may hereafter be amended or supplemented, shall remain in effect.

 

5.   Amendments to the Credit Agreement.  Subject to the terms and conditions of this Amendment, the Credit Agreement is hereby amended and supplemented as follows:

 

	
(a)  

	
All references to “this Agreement” shall be deemed to refer to the Credit Agreement, as further amended and supplemented hereby.

 

	
(b)  

	
Section 10 of the Credit Agreement is amended by inserting the following new Section 10.18:

“Most Favored Lender.  During the Additional Covenant Period, the Borrower shall deliver to the Administrative Agent a written notice of any Additional Covenant included in an Additional Facility or an Amended Facility within five (5) Business Days of the date it enters into such Additional Facility or Amended Facility.  Such Notice shall be signed by the Borrower’s senior financial officer and set forth in reasonable detail a description of the Additional Covenant, including any defined terms used therein and related explanatory calculations.  Except for any Additional Covenant that has been expressly waived in writing by the Agents or Required Lenders before the commencement of the Additional Covenant Period or is so waived in writing within fifteen days after the Administrative Agent’s receipt of a notice of the Additional Covenant, such Additional Covenant (i) shall be deemed automatically incorporated by reference into this Agreement, mutatis mutandis, as if set forth fully herein, effective as of the date when such Additional Covenant shall have become effective under such Additional Facility or Amended Facility and the Administrative Agent will be authorized to execute an amendment to the Credit Agreement adding such covenant and (ii) shall be effective only during the Additional Covenant Period, after which time such Additional Covenant shall no longer have any force or

 

 

 

  

2

  

 

 

effect.  During the Additional Covenant Period, any Additional Covenant incorporated into this Agreement pursuant to this Section 10.18 shall be deemed automatically amended herein to reflect any subsequent amendments made to such Additional Covenant under the applicable Additional Facility or Amended Facility.  Upon the occurrence of any event described in the preceding sentence, the Administrative Agent may enter into any additional agreement or amendment to this Agreement evidencing the amendment of any such incorporated covenants.  All of the existing covenants in Sections 10 and 11 as of the date of this Agreement shall remain in this Agreement regardless of whether any Additional Covenants are incorporated into this Agreement.”

 

	
(c)  

	
Section 11 of the Credit Agreement is amended by inserting the following new Section 11.17:

“During the period commencing October 1, 2011 and ending on (and including) March 31, 2013, the Borrower will not permit, as of the last day of any fiscal quarter during such period,  the aggregate amount of its interest-bearing Consolidated Indebtedness to exceed 62.5% of  the aggregate amount of its interest-bearing Consolidated Indebtedness plus its Consolidated Net Worth (as defined in the following sentence) at such time.  For purposes of, and only of, this Section 11.17, “Consolidated Net Worth” shall mean the Net Worth of the Borrower and its Subsidiaries determined on a consolidated basis in accordance with GAAP without any deduction for any minority interests in Subsidiaries.”

 

	
(d)  

	
The definition of “LIBOR” set forth in Section 13.01 of the Credit Agreement shall be amended to add the following at the end thereof:

 

 “; provided, however, that if the rate set forth in clause (a) is below zero, LIBOR will be deemed to be zero.”

 

	
(e)  

	
Section 13.01 shall be amended to add the following definitions in alphabetical order:

 

	
  

	
(i)

	
“Additional Covenant” means a restrictive or financial covenant applicable to the Borrower or any of its Subsidiaries, whether expressed as a covenant, undertaking, restriction or other such provision which requires the maintenance of any particular financial ratio or metric or which prohibits or limits actions which the Borrower or any of its Subsidiaries could otherwise take (or permits any such action only upon satisfaction of specified conditions), which applicable covenant or restriction has no equivalent provision in this Agreement or would be more restrictive as to the Borrower or any of its Subsidiaries than the corresponding provision set forth herein.  Additional Covenants shall not  be deemed to include any covenant (i) directly relating to (x) lender commitment reductions or terminations or the amount or payment terms of principal, interest or fees payable under an Additional Facility or an Amended Facility or (y) additional collateral or other security granted to a lender or creditor under an Additional Facility or an Amended Facility; or (ii) that would require the Borrower or any Subsidiary to (x) provide additional collateral or other security under this Agreement, any Security Document or any other Credit Document, whether due to the Borrower’s failure to maintain a specified financial ratio or metric or otherwise, or (y) maintain a particular collateral maintenance ratio or substantially similar financial ratio or metric.”

 

 

 

  

3

  

 

 

 

	
  

	
(ii)

	
“Additional Covenant Period” means the period from December 21, 2011 through the later of (i) March 31, 2013 and (ii) the first date after December 21, 2011 on which the Aggregate Appraised Value is equal to or more than 100% of the aggregate principal amount of the outstanding Loans, all Letter of Credit Outstandings and the Borrower’s obligations under the Interest Rate Protection Agreements entered into with respect to the Loans.

 

	
  

	
(iii)

	
“Additional Facility” means a credit agreement, note purchase agreement, indenture, promissory note, letter agreement or similar agreement for borrowed money with other lenders or creditors of the Borrower (other than trade creditors) entered into by the Borrower during the Additional Covenant Period; provided, however, that an Additional Facility shall not include an Amended Facility.

 

	
  

	
(iii)

	
“Amended Facility” means an amendment, modification, supplement or side letter entered into by the Borrower during the Additional Covenant Period to a credit agreement, note purchase agreement, indenture, promissory note, letter agreement or similar agreement for borrowed money, in each case, which is in existence on December 21, 2011, with other lenders or creditors of the Borrower (other than trade creditors).

 

6.   Waivers.  By their execution hereof, the Required Lenders hereby waive Sections 11.07 and 11.08 of the Credit Agreement for the period commencing October 1, 2011 and ending on (and including) March 31, 2013 (the “Waiver Period”).  For the avoidance of doubt, the Borrower shall be obligated to provide the financial statements, Appraisals, projections, certificates, notices and all other reports and filings required pursuant to Section 10.01 of the Credit Agreement notwithstanding the waiver of Sections 11.07 and 11.08 of the Credit Agreement.

 

 

 

  

4

  

 

 

7.   Fees and Expenses.

 

(a)           The Borrower agrees to pay the Administrative Agent for distribution to each Lender evidencing its agreement herewith by delivering an executed counterpart of this Amendment on or prior to the date hereof a facility fee (the “Facility Fee”) for the period from the effective date of this Amendment until the Maturity Date, computed at a rate for each day equal to (i) with respect to the period after the effective date of this Amendment until the date on which the Borrower has consummated an equity offering resulting in an aggregate amount of $50,000,000 of gross proceeds (such date, the “Equity Sale Date”), 2.0% per annum on such Lender’s pro rata share of the daily average outstanding principal amount of the Loans, and (ii) on and after the Equity Sale Date, 1.0% per annum until the Maturity Date on such Lender’s pro rata share of the daily average outstanding principal amount of the Loans.  Accrued Facility Fees shall be due and payable quarterly in arrears on each Payment Date and on the Maturity Date (or such earlier date upon which the Total Commitment is terminated and the full outstanding amount of the Obligations is paid in full).

 

(b)           The Borrower agrees to pay the Administrative Agent for distribution to each Lender evidencing its agreement herewith by delivering an executed counterpart of this Amendment on or prior to the date hereof an amendment fee equal to 0.25% of the outstanding principal amount of the Loans as of the date of this Amendment (after giving effect to the Prepayment (as defined below)), payable to each such Lender based on their pro rata share of the outstanding principal amount of the Loans payable to such consenting Lenders. The Borrower shall, subject to Section 13(e) of the Credit Agreement, pay promptly to the each of the Agents all reasonable legal fees of the Agents in connection with the preparation and execution of this Amendment.

 

8.   No Other Amendment.  All other terms and conditions of the Credit Agreement shall remain in full force and effect and the Credit Agreement shall be read and construed as if the terms of this Amendment were included therein by way of addition or substitution, as the case may be.

 

9.   Other Documents.  By the execution and delivery of this Amendment, each of the parties hereto consents and agrees that all references in the Note and the Security Documents to the Credit Agreement shall be deemed to refer to the Credit Agreement as amended and supplemented by this Amendment. By the execution and delivery of this Amendment, the Borrower hereby consents and agrees that the Security Documents and any other documents that have been or may be executed as security for the Facility and any of its obligations under the Credit Agreement, the Note or any Security Document shall remain in full force and effect notwithstanding the amendments contemplated hereby.

 

 

 

  

5

  

 

 

10.   Compliance.  Each Security Party shall have complied with and shall then be in compliance with all the terms, covenants and conditions of the Credit Documents and this Amendment, which are binding upon it.

 

11.   No Material Adverse Effect.  By its execution hereof, the Borrower agrees that as of the date hereof, nothing shall have occurred which would constitute a Material Adverse Effect, nor anything that could reasonably be expected to have a Material Adverse Effect.

 

12.   Financial Information. The Administrative Agent shall have received such financial and other information concerning the Borrower as it may reasonably request.

 

13.   Conditions Precedent.  The effectiveness of this Amendment shall be expressly subject to the following conditions precedent:

 

(a)   Prepayment of Loans and Reduction of Total Commitment.

 

(i) The Borrower shall have paid to the Administrative Agent $52,500,000 (the “Prepayment”) which shall be applied to the amount of the Final Payment; and

 

(ii) The Borrower shall have paid to the Administrative Agent all accrued and unpaid interest on the amount of the Prepayment.

 

(b)   Corporate Documents; Proceedings; etc.

 

(i)   The Mandated Lead Arrangers shall have received a certificate, dated the date hereof, signed by an Authorized Officer, member or general partner of each Credit Party, and attested to by the secretary or any assistant secretary (or, to the extent such Credit Party does not have a secretary or assistant secretary, the analogous Person within such Credit Party) of such Credit Party, as the case may be, certifying copies of resolutions of such Credit Party approving and authorizing such Credit Party to execute this Amendment, or in the case of the Subsidiary Guarantors, the Consent, Agreement and Reaffirmation attached hereto, and each additional Credit Document to which it is a party, and each of the foregoing shall be reasonably acceptable to the Mandated Lead Arrangers.

 

(ii)   A certificate of the jurisdiction of incorporation or formation, as the case may be, of each Credit Party as to the good standing thereof.

 

(c)   Amendment and Credit Documents.

 

(i)   The Borrower shall have executed and delivered to the Administrative Agent this Amendment and shall ensure that each of the Subsidiary Guarantors shall have executed and delivered to the Administrative Agent the Consent, Agreement and Reaffirmation attached hereto.

 

 

 

 

  

6

  

 

 

(ii)   The Required Lenders shall have executed and delivered to the Administrative Agent this Amendment.

 

(iii)  Each Credit Party shall have executed each additional Credit Document as may be required by the Lenders in connection with this Amendment.

 

(d)   Certificates of Ownership; Searches. The Administrative Agent shall have received each of the following with respect to each Vessel owned or operated by a Credit Party:

 

(i)   certificates of ownership from appropriate authorities showing (or confirmation updating previously reviewed certificates and indicating) the registered ownership of such Vessel by the relevant Subsidiary Guarantor; and.

 

(ii)   the results of maritime registry searches with respect to such Vessel, indicating no record liens other than Liens in favor of the Collateral Agent and/or the Lenders, Permitted Liens and Liens being discharged contemporaneously with such acquisition.

 

(e)   Payment of Fees.  The Agents and the Lenders shall have received from the Borrower payment of (i) all of the Agents’ reasonable legal fees and expenses incurred in connection with the negotiation and documentation of this Amendment (without duplication of any fees, costs and expenses  of any of the Agents or Lenders previously paid by the Borrower in connection with the preparation, execution and delivery of the Credit Agreement and other Credit Documents, or any of the prior amendments, waivers and consents thereto), (ii) all fees set forth in Section 7 hereof that are due and payable as of the effective date of this Amendment and (iii) all accrued and unpaid fees under the Fee Letter and Section 3.01 of the Credit Agreement.

 

(f)   Opinions of Counsel.  The Administrative Agent shall have received from Kramer Levin Naftalis & Frankel LLP, special New York counsel to the Borrower and its Subsidiaries, an opinion addressed to the Administrative Agent and each of the Lenders and dated the date hereof which shall be in form and substance reasonably acceptable to the Mandated Lead Arrangers and cover such matters incidental to the transactions contemplated herein as the Mandated Lead Arrangers may reasonably request.

14.   Total Commitment Reduction.  Notwithstanding anything to the contrary contained in Sections 3.02, 3.03 or 3.04 of the Credit Agreement, upon the receipt by the Administrative Agent of the Prepayment, the Total Commitment is hereby reduced by the amount of the Prepayment.

 

 

 

  

7

  

 

 

15.   Release.  In consideration of the foregoing, each Credit Party, on behalf of itself and for each of its direct and indirect affiliates, parent companies, subsidiaries, subdivisions, successors, predecessors and assigns, and their present and former officers, managers, members, heirs, legal representatives, employees, agents, and attorneys, and their trustees, successors and assigns (collectively, the “Releasors”), hereby releases, remises, acquits and forever discharges (the “Release”) the Agents, each Lender evidencing its agreement herewith by delivering an executed counterpart of this Amendment on or prior to the date hereof and such Agents’ and Lenders’ employees, agents, representatives, consultants, attorneys, fiduciaries, servants, officers, directors, partners, predecessors, successors and assigns, subsidiary companies, parent companies and related company divisions (all of the foregoing hereinafter called the “Released Parties”) from any and all actions and causes of action, judgments, executions, suits, debts, claims, demands, liabilities, obligations, damages and expenses of any and every character, known or unknown, direct or indirect, at law or in equity, of whatsoever kind or nature, whether heretofore or hereafter arising, for or because of any matter or things done, omitted or suffered to be done by any of the Released Parties prior to and including the date of execution hereof, and in any way directly or indirectly arising out of or in any way connected to this Amendment, the Credit Agreement or the other Credit Documents (all of the foregoing hereinafter called the “Released Matters”).  Each Credit Party represents and warrants to the Lenders that it has not purported to transfer, assign, pledge or otherwise convey any of such Credit Party’s right, title or interest in any Released Matter to any other person or entity and that the foregoing constitutes a full and complete release of all Released Matters.  In any litigation arising from or related to an alleged breach of the Release, the Release may be pleaded as a defense, counterclaim or cross claim and shall be admissible into evidence without foundation testimony whatsoever.  The Releasors expressly covenant and agree that the Release shall be binding in all respects upon their respective successors, assigns and transferees including, without limitation, any trustee in bankruptcy, and shall inure to the benefit of the successors and assigns of the Released Parties.

 

16.   Acknowledgement.  Each Credit Party acknowledges that (a) the Borrower is indebted to the Lenders under the Credit Agreement, the Note and the other Credit Documents as of the date of this Amendment, in the aggregate  outstanding principal amount of $1,227,000,000 (prior to giving effect to the application of the Prepayment); (b) the Obligations are absolute and unconditional and are the legal, valid and binding obligations of the Credit Parties without offset, defense or counterclaim, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law); (c) as of the date of this Amendment, the Security Documents have created in favor of the Lender a valid security interest in the Collateral, subject to no Liens other than Permitted Encumbrances; and (d) interest, fees, costs, and expenses continue to accrue with respect to the Obligations including, without limitation, fees and expenses of counsel for the Agents and the Lenders in connection with the administration and enforcement of the Credit Agreement and the other Credit Documents.

 

 

  

8

  

 

 

 

17.   Governing Law.  This Amendment shall be governed by and construed in accordance with the laws of the State of New York.

 

18.   Further Assurances.

 

(a)    The Borrower hereby consents and agrees that if this Amendment or any of the Security Documents shall at any time be deemed 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 or any of the Security Documents.

 

(b)    Without limitation of the terms of Section 17(a) of this Amendment, by no later than January 6, 2012:

 

	 	
(i)   

	
each Credit Party which owns or operates a Vessel shall have duly authorized, executed and delivered, and caused to be recorded in the appropriate vessel registry, an amendment to its respective Vessel Mortgage to secure the Credit Agreement, as amended by this Amendment; and

 

	 	
(ii)   

	
The Administrative Agent shall have received from (1) if the relevant Vessel is registered under the Marshall Islands flag, Reeder & Simpson P.C., special Marshall Islands counsel to the Borrower, (2) Constantine P. Georgiopoulos, special New York maritime counsel to the Borrower and its Subsidiaries or (3) if the relevant Vessel is registered in an Acceptable Flag Jurisdiction other than the Marshall Islands, special counsel to the Administrative Agent of such Acceptable Flag Jurisdiction, which shall be reasonably acceptable to the Administrative Agent, an opinion addressed to the Administrative Agent and each of the Lenders and dated as of the date of delivery, which shall (x) be in form and substance reasonably acceptable to the Administrative Agent and (y) cover the perfection of the security interests granted pursuant to each amendment of the Vessel Mortgages and such other matters incident thereto as the Administrative Agent may reasonably request.

 

19.   Counterparts.  This Amendment may be executed in as many counterparts as may be deemed necessary or convenient, and by the different parties hereto on separate counterparts each of which, when so executed, shall be deemed to be an original but all such counterparts shall constitute but one and the same agreement.

 

20.   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.

 

[SIGNATURE PAGES TO FOLLOW]

 

 

9

 

  

  

  

 

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.

 

	
BORROWER:

 

	
GENCO SHIPPING & TRADING

LIMITED, as Borrower

 

 

	
By /s/ John C. Wobensmith                                                         

	
Name: John C. Wobensmith

	
Title: Chief Financial Officer, Secretary, Treasurer

 

	
Address:

 

	
299 Park Avenue, 20th floor

	
New York, NY 10171

	
Telephone:(646) 443-8550

	
Facsimile: (646) 443-8551

	  
	
LENDERS:

	  
	
DNB BANK ASA (f/k/a DnB NOR Bank ASA, 

NEW YORK BRANCH), as Administrative Agent,

	
Collateral Agent, Mandated Lead Arranger, 

Bookrunner and a Lender

	  
	
By /s/ Sanjiv Nayar                                                          

	
Name: Sanjiv Nayar

	
Title: Senior Vice President

	  
	
By /s/ Kjell Tore Egge                                                             

	
Name: Kjell Tore Egge

	
Title: Senior Vice President

	  

 

 

  

  

  

 

 

	
BANK OF SCOTLAND PLC,

as Mandated Lead Arranger and Lender

 

 

	
By /s/ Douglas Newton                                                                

	
Name: Douglas Newton

	
Title:   Director

	  
	
By /s/ Michael Brown                                                                

	
Name: Michael Brown 

	
Title:   Associate Director

	  
	  
	
WESTLB AG, NEW YORK BRANCH,

as Lender

 

 

	
By_______________________________________                                                                

	
Name:

	
Title:

	  
	
By_______________________________________                                                                

	
Name:

	
Title:

	  
	
SANTANDER ASSET FINANCE PLC,

as Lender

 

 

	
By /s/ Mark McCarthy                                                               

	
Name: Mark McCarthy

	
Title: Head of Shipping

	  
	
By_______________________________________                                                                

	
Name:

	
Title:

 

 

  

  

  

	
CREDIT INDUSTRIEL ET

COMMERCIAL, NEW YORK BRANCH,

as Lender

 

 

	
By /s/ Alex Aupoix                                                                

	
Name: Alex Aupoix

	
Title: Managing Director

	  
	
By /s/ Adrienne Molloy                                                                

	
Name: Adrienne Molloy

	
Title: Vice President

	  
	  
	
DEXIA BANK BELGIUM SA/NV

as Lender

 

 

	
By /s/ Katrien Metten                                                                

	
Name: Katrien Metten

	
Title: Company Lawyer

	  
	
By /s/ Benoit Terreur                                                                

	
Name:  Benoit Terreur 

	
Title: Company Lawyer

	  
	
LLOYDS TSB BANK,

as Lender

 

 

	
By /s/ Douglas Newton                                                                

	
Name: Douglas Newton

	
Title: Director

	  
	
By /s/ Michael Brown                                                                

	
Name: Michael Brown

	
Title: Associate Director

 

	
SWEDBANK AB(PUBL),

as Lender

 

 

	
By /s/ Dagobert Billsten                                                                

	
Name: Dagobert Billsten

	
Title: Attorney-in-Fact

	  
	
By_____________________________________                                                                

	
Name:

	
Title:

 

 

  

  

  

 

CONSENT, AGREEMENT AND AFFIRMATION

 

Each of the undersigned Guarantors hereby consents and agrees to the terms and conditions of' the foregoing Amendment dated as of December 21, 2011 and to the documents contemplated thereby and to the provisions contained therein relating to conditions to be fulfilled and obligations to be performed by it pursuant to or in connection with said Amendment and agrees particularly to be bound thereby to the same extent as if the undersigned were a party to said Amendment.  Each of undersigned hereby reaffirms its obligations, representations, warranties and covenants under its respective Guaranty of the guaranty of the obligations of the Borrower to the Lenders under or in connection with the Credit Agreement, as amended.  Each of the undersigned hereby agrees that it shall execute each additional Credit Document, including executing and recording an amendment to its respective Vessel Mortgage, as may be required by the Lenders in connection with the Amendment.

 

GENCO ACHERON LIMITED

GENCO BEAUTY LIMITED

GENCO KNIGHT LIMITED

GENCO LEADER LIMITED

GENCO MUSE LIMITED

GENCO VIGOUR LIMITED

GENCO CARRIER LIMITED

GENCO PROSPERITY LIMITED

GENCO SUCCESS LIMITED

GENCO WISDOM LIMITED

GENCO MARINE LIMITED

GENCO EXPLORER LIMITED

GENCO PIONEER LIMITED

GENCO PROGRESS LIMITED

GENCO RELIANCE LIMITED

GENCO SURPRISE LIMITED

GENCO SUGAR LIMITED

GENCO AUGUSTUS LIMITED

GENCO TIBERIUS LIMITED

GENCO LONDON LIMITED

GENCO TITUS LIMITED

GENCO CONSTANTINE LIMITED

GENCO HADRIAN LIMITED

GENCO COMMODUS LIMITED

GENCO MAXIMUS LIMITED

GENCO CLAUDIUS LIMITED

GENCO CHALLENGER LIMITED

GENCO CHAMPION LIMITED

GENCO CHARGER LIMITED

GENCO HUNTER LIMITED

GENCO PREDATOR LIMITED

GENCO WARRIOR LIMITED

 

By /s/ John C. Wobensmith                                                                

Name:  John C. Wobensmith

Title:  Chief Financial Officer, Secretary, Treasurer

 

GENCO RAPTOR LLC

GENCO CAVALIER LLC

GENCO THUNDER LLC

By /s/ John C. Wobensmith                                                                

Name:  John C. Wobensmith

Title:  Manager

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